TaxTMI 
TaxTMI 
2014 (1) TMI 698
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....ing paragraphs. 2. Firstly, we shall take up ITA No.8100/M/2011 which is filed by the assessee on 2.12.2011 for the assessment year 2008-2009. In this appeal, assessee raised the following grounds which read as under:- "1.(a) On the facts and in the circumstances of the case and in law, the Ld CIT erred in confirming the disallowance of an amount of Rs. 23,87,180/- being payments made to SIDBI towards reimbursement of deputed personnel cost by invoking the provisions of section 40(a)(ia) and the reasons assigned for doing so are wrong and contrary to the facts of the case, the provisions of Income Tax Act, 1961 and the Rules made thereunder. 1(b) On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in holdin....
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....and mentioned that the SIDBI shall depute the personnel for rendering services and in response, the assessee shall reimburse the payment incurred on the said personnel. In this regard, Ld Counsel brought our attention to page 34 onwards of the paper book and mentioned that these are the debit notes raised by the SIDBI on the assessee (SMERA). The impugned payment of Rs. 23,87,180/- is the sum of all the reimbursements. Ld Counsel mentioned that SIDBI pays salaries to these employees, who were deputed for rendering services to the assessee and the salaries are paid after making necessary TDS in accordance with the conditions. Further, Ld Counsel mentioned that the Assessing Officer never doubted these facts. The amount paid by the assessee t....
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....visions to the said amount of Rs. 23,87,180/-. In this regard, we have perused the laws placed before us which are mentioned above. The above mentioned decisions are uniform for the proposition that the provisions of section 40(a)(ia) of the Act should not be invoked when the payments involved constitute reimbursements. For instance, the relevant para 3 of the judgment of the Hon'ble jurisdictional High Court in the case of CIT vs. OCB Engineers (supra) reads as under: "3. So far as question (a) is concerned, the respondent assessee was interalia engaged in the business of execution of contracts for erection and commissioning of plants. The AO disallowed an amount of Rs. 16.86 lacs paid by way of reimbursement to sister concerns for paymen....
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....s partly allowed. I.T.A. No.7837/M/2011 (AY: 2008-2009) 8. This appeal filed by the Revenue on 21.11.2011 is against the order of CIT (A)- 21, Mumbai dated 30.8.2011 for the AY 2008-08. In this appeal, Revenue raised the following grounds which read as under: "1. On the facts and the circumstances of the case, the Ld CIT (A) erred in deleting the disallowance of Rs. 30,93,170/- u/s. 40(a)(ia) of the Act for late payments of TDS to Government account." 9. Briefly stated relevant facts of the case are that the AO disallowed sum of Rs. 30,93,170/- invoking the provisions of section 40(a)(ia) of the Act on the reasoning that the assessee has not debited TDS from the payments made to various parties within the prescribed time. During the ass....
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....ned that the TDS amount in respect of expenses of Rs. 30,77,664/- have been paid before the due date of filing of return of income ie before 30.9.2008. It was explained to the AO that the deduction is allowable where TDS has been paid / deposited before the due date of filing of the return of income ie 30.9.2008. The appellant further explained that the entire tax deducted at source (except Rs. 1,597/-) from the payments made during the period 1.4.2007 to 28.2.2008 was paid by the appellant in Government account till the month of July, 2008 ie well before the due date of filing of income tax return for the year under consideration. The appellant further explained that section 40(a)(ia) of the Act have been amended by Finance Act, 2010. The ....