2019 (10) TMI 1627

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....wance of Rs. 1,18,84,418/- u/s. 40(a)(ia) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for failure to make TDS u/s. 194J read with Explanation 2 to clause (vii) of Sub-section (i) of Section 9 of the Act. This disallowance was deleted by the Ld. CIT(Appeals) which forms the bedrock of Revenue's appeal before us. 3. The brief facts in this case are that the assessee company is engaged in the business of owning and maintaining Race horses. The assessee company had filed its e-return of income declaring total loss at Rs.(-)1,62,58,690/-. During the assessment proceedings, the assessee was requested to furnish relevant details with respect to major expenses debited to the Profit & Loss account. On perusal of the same, i....

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....ding the nature of expenses had applied the provisions of Section 40(a)(ia) of the Act for disallowing the expenses claimed by the appellant under proviso to section 48(4) of the Act. The appellant contended that section 40(a)(ia) of the Act was applicable only in case of expenses falling u/s.30 to 38 of the Act and claimed as business expenses under the head 'Profits & Gains of Business or Profession'. The nature of expenses falling under the head 'Income from Other Sources; in the case of the appellant. Reference was also made to the amendment of section 58(1A) w.e.f. 1st April, 2008, effective from A.Y. 2018-19 wherein the provisions of section 40(a)(ia) would be applied for computing the income chargeable under the head 'Income From Oth....

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....l of the assessment order, it is pertinent to note that the Assessing Officer has passed his decision mainly on the findings for assessment year 2011-12 and followed the same mechanically without examining the very claim of the assessee and the nature of such expenses. The applicability of section 40(a)(ia) of the Act are in a case of expenses falling u/s. 30 to 38 of the Act and claimed as business expenses under the head "Profit & Gains of Business or profession". The nature of expenses is falling under the head "Income from Other sources" in the case of assessee. Reference was also made to the amendment of section 58(1A) w.e.f. 1st April, 2008, effective from A.Y. 2018-19 wherein the provisions of section 40(a)(ia) would be applied for c....