2015 (12) TMI 568

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....he appellant Revenue has urged following question of law for our consideration. (i) Whether on the facts and circumstances of the case, the Tribunal was correct in law, in deleting the disallowance made under Section 40(a)(ia) of the Act ? 3. The Respondent Assessee is a Third Party Administrator (TPA) in respect of the mediclaim Insurance. The business of the Respondent Assessee inter alia involves facilitating an insured person to avail the services of the hospital without payment in cash popularly called cashless services. This is ensured by the Respondent Assessee as a TPA guarantees payment to the hospitals extending cashless facility to the insured on behalf of the Insurance company. The medical expenses incurred and claim....

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....ny expenditure in respect of the payments made by it to the hospitals on receiving the same from the Insurance company. It acted as a mere conduit to carry the amounts for the Insurance company to the concerned Hospital. These amounts were not reflected in its profit and loss account. In the above view, the Tribunal dismissed the Revenue's appeal. 6. We noticed that the impugned order inter alia records the fact that in Assessment Year 2007-08, the order of the Commissioner of Income Tax (Appeals) on issue an identical to the present one had held in fact of the Respondent Assessee and the same had been accepted by the Revenue as to appeal therefrom was filed. In view of the above, one Mr. Aastha Madhur, Deputy Commissioner of Income ....

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.... Revenue states that there was a responsibility on the Respondent Assessee to deduct tax under Chapter XVII B of the Act and this not being done, the amount paid without deduction of such tax is liable to be included to the petitioner's income. 8. We have considered the grievance of the Revenue. We note that both the order i.e. of the Commissioner of Income Tax (Appeals) as well as the impugned order of the Tribunal have recorded a finding of fact that the Respondent Assessee has not claimed any expenditure while computing its income chargeable to tax. As a consequence, there can be no occasion to disallow such expenditure under Section 40(a)(ia) of the Act. It is clear from plain reading of Section 40(a)(ia) of the Act that the fail....