The Tax Publishers2020 TaxPub(DT) 4821 (Gau-Trib)

INCOME TAX ACT. 1961

Section 40(a)(ia)

Payments made to persons whose income is not chargeable to tax would not invite the requirement of tax deduction at source and consequential disallowance of such payments under section 40(a)(ia). Accordingly, disallowances of payments to tribals whose incomes were exempt under section 10(26), was to be reversed.

Business disallowance under section 40(a)(ia) - Non-deduction of tax at source - Payments made to person whose income was not chargeable to tax -

Assessee made payments to members of Scheduled Tribes whose incomes were exempted from payment of income tax under section 10(26). AO disallowed deduction of payments made on account of non-deduction of tax at source. Held: Payments made to person's whose income is not chargeable to tax would not invite the requirement of tax deduction at source and consequential disallowance of such payments under section 40(a)(ia). Accordingly, disallowances of payments to tribals whose incomes were exempt under section 10(26), was to be reversed.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14 & 2007-08


INCOME TAX ACT, 1961

Section 40(a)(ia)

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