Tribunal remits disallowance issue for reconsideration, dismisses appeal on overseas payments without TDS.

The Tribunal remitted the issue of disallowance under section 14A read with rule 8D back to the Assessing Officer for reconsideration, following a previous decision. Regarding the disallowance under section 40a(i) for overseas payments without tax deduction at source, the Tribunal dismissed the Revenue's appeal, citing that the disallowance applies to amounts 'payable' and not 'paid', in line with judicial precedence. The appeal was partially allowed for statistical purposes.

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Issues:
1. Disallowance under section 14A read with rule 8D.
2. Disallowance under section 40a(i) for overseas payments without tax deduction at source.

Issue 1: Disallowance under section 14A read with rule 8D:
The appeal by the Revenue challenged the CIT(Appeals) order concerning two main issues, one of which was the deletion of disallowance under section 14A read with rule 8D. The Revenue contended that the Assessing Officer correctly applied Rule 8D for the Assessment Year (AY) 2008-09 and the CIT(Appeals) erred in restricting the disallowance. The Tribunal noted a previous decision where the issue was remanded back to the Assessing Officer for fresh adjudication. Following this precedent, the Tribunal remitted the issue back to the Assessing Officer for reconsideration in accordance with the law.

Issue 2: Disallowance under section 40a(i) for overseas payments without tax deduction at source:
The second issue revolved around the disallowance under section 40a(i) for overseas payments of professional and consultancy charges made without tax deduction at source. The assessee argued that since the payments were already made, the case was supported by a judgment of the Honorable Allahabad High Court. The Tribunal referred to various High Court decisions and held that the disallowance under section 40a(i) applies only to amounts 'payable' and not to amounts already 'paid'. Relying on judicial precedence, the Tribunal dismissed the ground of appeal by the Revenue, partially allowing the appeal for statistical purposes.

In conclusion, the Tribunal's judgment addressed the issues of disallowance under section 14A read with rule 8D and disallowance under section 40a(i) for overseas payments without tax deduction at source. The Tribunal remitted the first issue back to the Assessing Officer for fresh adjudication and dismissed the second issue based on judicial precedence favoring the assessee.

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