AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (3) TMI 720
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....ff was required to be allowed as a deduction as per the provision laid down in Rule 9A of the Income Tax Rules which is not covered under the provisions of section 40(a)(ia) of the IT Act, 1961. The appellant further submits that the disallowance under section 40(a) are limited to expenditure covered by section 30 to 38 in view of the non obstante clause with which section 40(a) starts 'notwithstanding anything to the contrary in section 30 to 38". The appellant relies on the decision of the Hon. Tribunal in the case of Teja Constructions Vs. ACIT [2010] 129 TTJ 57 (Hyd)(UO). 2) The CIT(A) erred in concluding that the agreement to transfer the remake rights were handed over to Manorama Films only on 16th September 2006, a date after t....
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....1 towards non deduction of tax under 194J on revenue expenditure claim of Rs. 15.46 crores by the assessee. In this connection, as already established, the acquisition of the said picture right, valued at Rs. 15.46 crores happened in the preceding previous year and not in the previous year relating to AY 2008-09. As such the disallowance, if at all warranted, should only be in AY 2007-08 and not in AY 2008-09. Quite obviously there is no amount 'payable' as at the year end i.e., 31.03.2008. Under said circumstances, as per the Special Bench decision in Merlyn Shipping & Transports 16 ITR (Trib) 1 (Vizag) and approved by the Allahabad High Court in Vector Shipping Services, disallowance u/s 40(a)(ia) can apply only to amounts 'payab....
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....eceding previous year and not in the previous year relating to AY 2008-09. He submitted that as per section 194J of the IT Act, tax is to be deducted at source at a time of payment or at the time of credit of the said amount payable in the books of the assessee. It was pointed out that as affirmed by the revenue authorities, the date of credit of the said amount in the books of the assessee to the account of the partner Gemini Industries & Imaging Ltd., is on 1st April, 2006 and, therefore, the liability to deduct tax at source, if at all, is on 1st April, 2006 and the law as applicable as on that date only would have relevance. For this proposition, he relied on the decision of the ITAT, Bangalore in the case Hifi Networks Pvt. Ltd., in IT....
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....e assessee has not deducted tax at source on a bonafide belief that there is no need to deduct tax, there can be no disallowance u/s 40(a)(ia) of the Act. . He submitted that the said decision was followed by the ITAT, Hyderabad in ACIT Vs. Karvy Computershare Pvt. Ltd., 23 ITR (Trib) 599, and the ITAT, Mumbai Bench in ITA No. 2361 and 2524/Mum/2011 in ACIT Vs. DICGC Ltd., and in ITA No. 480/Mum/2011 in DCIT Vs. Jamnadas Khusaldas & Co. 7. On the other hand, the learned DR submitted that the expenditure cannot be allowed on 2 counts, viz., i) there is no incurring of expenditure in the year under consideration in terms of Rule 9A and ii) even if it is presumed that there is incurring of expenditure, it should be liable for deduction of T....
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.... letter dated 24/04/2006 which further required to be formalized into an agreement on a later date, the Manorama Films paid the purchase consideration to M/s Vinod Chopra Films Pvt. Ltd. vide cheques/DDs dated 16/09/2006, 17/10/2006, 18/10/2006 and 31/03/2007, which shows that the purchase of the remaking rights were after 24/04/2006 which is supported by the payment schedule which started from 16/09/2006 on wards i.e. after the amendment which is effective from 13/07/2007. He therefore contended that on 01/04/2006 neither Manorama Films nor Gemini Industries and Imaging Pvt., Ltd. had ownership rights over remaking of the film and when there is no ownership there is no question of bringing it as its capital contribution into the partnershi....