2013 (6) TMI 721 - AT - Income Tax

Appeal & Cross Objection on Tax Disallowance Decision for Assessment Year 2009-10

Smt. Prasanna Radhakrishnan Dawson Versus The I.T.O. And Vice-Versa

The appeal by the revenue and Cross Objection by the assessee, both relating to the assessment year 2009-10, challenged the deletion of disallowance under ... - Issues involved: The appeal filed by the revenue and the Cross Objection filed by the assessee are directed against the order passed by the Ld. CIT(A)-I, Kozhikode and they relate to the assessment year 2009-10. The solitary issue urged in the appeal filed by the revenue is whether the Ld. CIT(A) was justified in deleting the disallowance made u/s. 40(a)(ia) of the Act.Details of the Judgment:Issue 1: Disallowance u/s 40(a)(ia) of the Act- The Assessing Officer disallowed transportation charges paid without tax deduction under sec. 194C.- The assessee claimed the person was an employee, not a contractor.- Ld. CIT(A) deleted the addition based on a decision by Cochin Bench of ITAT.- Revenue argued citing decisions by Special Bench and High Courts.- Assessee argued no contract with the person, only with M/S HPCL.- Tribunal noted conflicting views of High Courts and decided to follow them.- Ld. CIT(A) decision set aside, matters restored for fresh adjudication.- Appeal by revenue and cross objection by assessee treated as allowed for statistical purposes.This judgment highlights the interpretation and application of sec. 40(a)(ia) of the Act regarding tax deduction on payments, emphasizing the importance of contractual relationships and legal precedents in tax assessments.