TaxTMI 
TaxTMI 
2015 (6) TMI 356
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....ent, the issue of notice is against law. 2. The 'Royalty" paid by the assessee do not fall within "Fees for Professional or Technical Services" as defined in section 194J. Hence, the assessee was not liable for TDS. Thus, there can be no disallowance u/s 40(a)(ia). 3. Even if it is held that 194] was applicable, the case of the assessee is also covered by second proviso to section 40(a)(ia), that being machinery provision applies to the cases pending as on the date of enactment of Finance Act 2012. Hence, the addition of Rs. 46,80,000/- is against law. 4. The order passed by the authorities below is bad in law and also against the principles of natural justice. Hence, needs be quashed particularly when there is no loss to reven....
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.... at source (TDS) as per provisions of section 194J of the Income-tax Act, 1961 (hereinafter called in short "the Act"). Since he has not deducted tax on the said payment, the Assessing Officer has made disallowance having invoked the provisions of section 40(a)(ia) of the Act. 4. The assessee preferred an appeal before the ld. CIT(A) with the submission that the said payment was made for the locational advantage and not as royalty. Therefore, the assessee was not required to deduct tax at source under section 194J of the Act. It was further contended that the said payment was not royalty at all. The assessee is a trader in medicine and runs medical store in the premises of SRMS and mere use of word "ROYALTY" cannot be a reason for attrac....
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....ovisions of section 194J of the Act. The nomenclature given for payment by the assessee does not bring it within the scope of section 194J of the Act. He has further contended that the entire payment was made during the year, therefore, disallowance cannot be made under section 40(a)(ia) of the Act in the light of the order of the Special Bench of the Tribunal in the case of Merilyn Shippping & Transports vs. ACIT, 136 ITD 23 and the judgment of the Hon'ble jurisdictional High Court in the case of CIT vs. Vector Shipping Services (P) Ltd. in I.T.A. No. 122 of 2013. He has further contended that since the payee has discharged the tax liability by way of advance tax or self assessment tax, the payer cannot be held to be liable for the sam....
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....the Tribunal on the case of Merilyn Shippping & Transports vs. ACIT (supra) and the judgment of the Hon'ble jurisdictional High Court in the case of CIT vs. Vector Shipping Services (P) Ltd. (supra), the Tribunal has taken a view that in the case of CIT vs. Vector Shipping Services (P) Ltd. (supra), the jurisdictional High Court has simply made a passing reference as the issue of payable and paid was not before the jurisdictional High Court. Therefore, the impugned issue is not covered by these judgments. 8. Having carefully examined the orders of the lower authorities, documents filed before us and the judgment referred to by the parties in the light of the rival submissions, we find from the royalty agreement that the assessee was ....
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....se (vi) of sub-section (1) of section 9 of the Act and we are of the view that these payments were made on account of facilities given to the assessee. Therefore, it is a royalty payment and the assessee is required to deduct TDS under section 194J of the Act. 9. So far as applicability of provisions of section 40(a)(ia) of the Act is concerned, we find that after introduction of the proviso to section 40(a)(ia) of the Act, the disallowance cannot be made if it is established that the recipient has already taken into account the payments and has paid taxes and filed return of income under section 139(1) of the Act. This issue was examined by us in the case of ACIT vs. Shri. Raja Chakravarty, Kanpur in I.T.A. No. 49/LKW/2013, in which we ....
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....ductee has paid tax, then the assessee shall be deemed to have deducted and paid tax on such sum on the date of furnishing the return of income. Though this proviso was introduced w.e.f. 1.4.2013 but being clarificatory and beneficial provision, it has retrospective effect as held by the Agra Bench of the Tribunal in the case of Rajeev Kumar Agarwal vs. ACIT, Mathura (supra). The ld. counsel for the assessee has submitted that the deductee has filed the return of income, but it is not clear whether the deductee has paid tax thereon. No documentary evidence is placed on record in support of these contentions. We, therefore, following the order of the Agra Bench of the Tribunal in the case of Rajeev Kumar Agarwal vs. ACIT, Mathura (supra), ho....