Union Bank of India v. Asstt. CIT

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The Tax Publishers2012 TaxPub(DT) 1182 (Mum-Trib) : (2012) 049 SOT 0032 INCOME TAX ACT, 1961 --Exempt income--Disallowance under section 14AApplicability of rule 8D--The question of making disallowance under section 14A was no more res integra in view of the judgment of the Bombay High Court in Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT (2010) 328 ITR 81 (Bom) : 2010 TaxPub(DT) 2182 (Bom-HC) holding that the provisions of section 14A are applicable in circumstances as are prevailing presently and the disallowance had to be worked out by assessing officer on some 'reasonable basis' and not rule 8D. Under such circumstances, the impugned order was set aside and the matter was restored to the file of assessing officer for deciding the quantum of disallowance, as per the aforenoted judgment, after allowing a reasonable opportunity of being heard to assessee. Income Tax Act, 1961 Section 14A Income Tax Rules, 1961 Rule 6D INCOME TAX ACT, 1961 --TDS--Disallowance under section 40(a)(i)Applicability of Income Tax Act, 1961, in Sikkim State--The amount represented payments made in the State of Sikkim. assessing officer disallowed the amount on the ground that assessee had not deducted tax at source in respect of the payments and hence, as per the provisions of section 40(a) the said amount was not allowable as deduction. Commissioner (Appeals) relying on the decision in the case of Anjan Banerjee v. UOI (1994) 207 ITR 130 (Cal) : 1994 TaxPub(DT) 0278 (Cal-HC) confirmed the said disallowance. Assessee submitted that the provisions regarding the applicability of Income Tax Act to Sikkim was not clear and hence, assessee had not deducted tax at source. The Secretary (Finance Govt. of Sikkim) vide letter 3054 dt. 9-2-1996 specifically stated about the non-applicability of the Income Tax Act to Sikkim which was also confirmed by Under Secretary Govt. of Sikkim vide letter ref. 827/Fin. dt. 1-2-2007. In view of the above assessee had not deducted tax at source in respect of interest paid. Hence no amount of expenditure should have been disallowed for non-deduction of tax at source in the State of Sikkim. Held: Justified in view of Apex Court decision in GE India Technology Centre (P) Ltd. v. CIT (2010) 327 ITR 456 (SC) : 2010 TaxPub(DT) 2241 (SC). Income Tax Act, 1961 Section 40(a)(i) SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 1182 (Mum-Trib) : (2012) 049 SOT 0032

INCOME TAX ACT, 1961

--Exempt income--Disallowance under section 14AApplicability of rule 8D--The question of making disallowance under section 14A was no more res integra in view of the judgment of the Bombay High Court in Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT (2010) 328 ITR 81 (Bom) : 2010 TaxPub(DT) 2182 (Bom-HC) holding that the provisions of section 14A are applicable in circumstances as are prevailing presently and the disallowance had to be worked out by assessing officer on some 'reasonable basis' and not rule 8D. Under such circumstances, the impugned order was set aside and the matter was restored to the file of assessing officer for deciding the quantum of disallowance, as per the aforenoted judgment, after allowing a reasonable opportunity of being heard to assessee.

Income Tax Act, 1961 Section 14A

Income Tax Rules, 1961 Rule 6D

INCOME TAX ACT, 1961

--TDS--Disallowance under section 40(a)(i)Applicability of Income Tax Act, 1961, in Sikkim State--The amount represented payments made in the State of Sikkim. assessing officer disallowed the amount on the ground that assessee had not deducted tax at source in respect of the payments and hence, as per the provisions of section 40(a) the said amount was not allowable as deduction. Commissioner (Appeals) relying on the decision in the case of Anjan Banerjee v. UOI (1994) 207 ITR 130 (Cal) : 1994 TaxPub(DT) 0278 (Cal-HC) confirmed the said disallowance. Assessee submitted that the provisions regarding the applicability of Income Tax Act to Sikkim was not clear and hence, assessee had not deducted tax at source. The Secretary (Finance Govt. of Sikkim) vide letter 3054 dt. 9-2-1996 specifically stated about the non-applicability of the Income Tax Act to Sikkim which was also confirmed by Under Secretary Govt. of Sikkim vide letter ref. 827/Fin. dt. 1-2-2007. In view of the above assessee had not deducted tax at source in respect of interest paid. Hence no amount of expenditure should have been disallowed for non-deduction of tax at source in the State of Sikkim. Held: Justified in view of Apex Court decision in GE India Technology Centre (P) Ltd. v. CIT (2010) 327 ITR 456 (SC) : 2010 TaxPub(DT) 2241 (SC).

Income Tax Act, 1961 Section 40(a)(i)