TaxTMI 
TaxTMI 
2018 (9) TMI 860
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.....2014. The Revenue filed appeal challenging the order of this Tribunal before Hon'ble Bombay High Court. The Hon'ble High Court in its order dated 04.09.2017 in ITA No. 1826 of 2014, remanded the matter relating to disallowance of salary and related expenses of Rs. 4,99,19,593/- under section 40(ba) of the Act to the Tribunal for adjudicating it afresh. In these circumstances, the sole ground of appeal for fresh adjudication is; "Whether on the facts and circumstances of the case the ld. CIT(A) erred in sustaining disallowance of reimbursement of salary and related expenses of Rs. 4,99,19,593/- from non-deduction of tax at source under section 40(ba) of the Act." 2. Brief facts leading to the issue for adjudication are that the ....
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....r, the AO took the view that the provisions of section 40(ba) of the Act are also attracted and accordingly held that this expenditure is disallowable u/s 40(ba) also. The provisions of sec. 40(ba) stipulates that any payment of salary or remuneration by whatever name called, made by an Association of Person to a member of such association shall not be deducted in computing the income chargeable under the head Profits and gains of business. On appeal filed before the Ld. CIT(A), the disallowance on both counts were sustained. On further appeal before the Tribunal, the disallowance was ordered to be deleted, vide order dated 04.09.2014. Aggrieved by the order of Tribunal, the Revenue field appeal before the Hon'ble Bombay High Court. The....
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....ls (other than a company or a co-operative society or a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India), any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made by such association or body to a member of such association or body." We notice that the provisions of sec.40(ba) is attracted to the payments of "interest", "salary, bonus, commission or remuneration", if these payments are made to a member of such association or body. In the instant case, we are not concerned with "payment of interest or commission". 5. The issue under consideration related to payment of "salary and other related expens....
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....clear that the "salary payment" contemplated in sec. 40(ba) is the payment made to the member of AOP, which shall constitute income in his hands. 7. In the instant case, the submission of the assessee is that the employees of ITDCL were deputed to the assessee-AOP. The ITDCL has directly paid salaries and other related expenses to its employees and since the assessee has used the services of those employees, it has recovered the same from the assessee. Hence in the hands of the assessee, what was paid to M/s ITDCL was reimbursement of expenses. 8. We find considerable force in the arguments of the assessee. We have examined the provisions of sec. 40(ba) of the Act and the ld A.R also invited our attention to sec. 67A of the Act. A combine....