2024 (11) TMI 1102

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....aised two grounds. Ground No.2, being a general ground, does not require any adjudication. 3. In Ground No.1, the assessee has challenged the disallowance of Rs. 31,34,633/- made under Section (u/s.) 40(a)(ia) of the Income Tax Act, 1961 (in short 'the Act'). 4. Requisite facts relating to this issue are, the assessee is a resident corporate entity. As stated by the Assessing Officer, the assessee is engaged in the business of development, maintenance of Mahaonline portal for providing web-based services by the Government to Citizens, Government to Business and other portal services of the Government of Maharashtra. For the assessment year under dispute, assessee filed its return of income on 13.10.2017 declaring income of Rs. 8,11,25....

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....payments amounting to Rs. 43,20,000/- and Rs. 3,455,000/- are not subject to TDS Provisions as payments have been made to Government of Maharashtra. He submitted, an identical issue came up for consideration before the Tribunal in the case of TATA Consultancy Services. He submitted while deciding the issue the Coordinate Bench has held that since payments were made to Government, TDS Provisions would not get attracted. Thus, he submitted, the issue is squarely covered in favour of the assessee. He submitted, as regards the payment of Rs. 19,85,969/- to Village Level Entrepreneurs, in the year under consideration, the amount in dispute was neither paid nor credited to the payee. He submitted, when invoices were received from the concerned ve....

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....CIT(A). 8. We have considered rival submissions and perused the material on record. Having factually examined the issue relating to the disallowance made u/s. 40(a)(ia) of the Act, we find that the amounts of Rs. 43,20,000/- and Rs. 34,55,000/-, part of which have been disallowed by the Assessing Officer u/s. 40(a)(ia) of the Act, have actually been paid by the assessee to the Maharashtra Government. Therefore, such payment would not get covered under the TDS Provisions. In so far as payment of Rs. 19,85,969/- to Village Level Entrepreneurs is concerned, the assessee has furnished before us documentary evidence to demonstrate that in the year under consideration neither the amount in dispute was paid nor credited to the concerned vendors....