TaxTMI 
TaxTMI 
2026 (7) TMI 32
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....nge and dividend on Test IDs and disallowance u/s. 14A read with Rule 8D should be restricted to the exempt income so claimed by the assessee. In this regard, reliance was placed on Coordinate Bench decision in case of Sapphire Fintech Pvt. Ltd. v. DCIT [2026] 182 taxman.com 31. 4. The ld. DR has been heard who has relied on the order passed by the lower authorities. 5. We have heard the rival contentions and perused the material available on record. It is an admitted fact that the assessee has earned dividend income of Rs. 92,178/- which was claimed as exempt. It is a settled position that the disallowance u/s. 14A cannot be more than the exempt income. The Coordinate Bench in case of Sapphire Fintech Pvt. Ltd. (supra) following the decision of Hon'ble Bombay High Court in case of Nirved Traders Pvt. Ltd. v. DCIT [ITA No.149 of 2017, dated 23-4-2019], has also held that the disallowance u/s. 14A cannot be more than the exempt income. Accordingly, we direct the Assessing Officer to restrict the disallowance to the extent of dividend income and the remaining disallowance is directed to be deleted. 6. In the result, ground no. 2 of the assessee is partly allowed. 7. I....
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....ourt in case of TRF Ltd. v. CIT (323 ITR 397), wherein it has been held by the Hon'ble Supreme Court that after 01.04.1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable and it is enough where the bad debts is written off as irrecoverable in the books of account of the assessee. It was submitted that the decision of the Hon'ble Supreme Court, thereafter, has been referred to in the CBDT Circular No. 12/2016, dated 30.05.2016 and taking the same into consideration, the Board has also accepted the position and has stated that no appeals may henceforth be filed on this ground and appeals already filed be withdrawn as not pressed. It was accordingly submitted that in view of the decision of the Hon'ble Supreme Court and the Board Circular, the bad debts so written off in the books account should be allowed to the assessee. 8. The ld. DR has been heard who has relied on the order passed by the lower authorities. In this regard, our reference was drawn to the order of the ld. CIT(A) and it was submitted that during the appellate proceedings, the assessee was asked to file necessary proof of actual write-off in the books ....
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....urse of hearing, the ld. AR submitted that during the year under consideration, the assessee has made payment of Rs. 59,67,919/- towards tea and coffee expenses and the same broadly consists of payments to vendors below threshold limit amounting to Rs. 21,19,917/-, reimbursements to employees amounting to Rs. 18,99,026/-and payment exceeding threshold limit amounting to Rs. 19,48,922/-. It was submitted that as far as the payment of Rs. 21,19,971/- made to parties which are below the threshold limit, there is no requirement to carry out any TDS on the payments. Hence, the Assessing Officer has wrongly invoked the provisions of section 40(a)(ia) and the same be directed to be deleted. 13. Regarding payment of Rs. 18,99,026/- reimbursed to the employees, it was submitted that the assessee has reimbursed these expenses incurred by its employees in the course of performance of their employment. It was submitted that where an employee is on some professional assignment or is out of office premises for official purposes, the assessee reimburses the expenses which may be incurred by its employees for refreshments etc. which is based on production of requisite documentary evidence by th....
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....Section 194C are applicable. 16. We have heard the rival contentions and perused the material available on record. Firstly, as regards reimbursement of expenses to the employees is concerned, the expenses are incurred/paid by the respective employees and thereafter, the same have been reimbursed by the assessee employer. Therefore, we find that where the expenses are incurred and payments are made by the respective employees, the person responsible for paying the sum to the third party is the individual employee and not the employer assessee and therefore, the responsibility to deduct TDS thereon cannot lies in the hands of the employer assessee unless and until it can be demonstrated that there is privity of contract which exists between the employer assessee and the third party. In the instant case, nothing has been brought on record in this regard and therefore, in absence of any material on record demonstrating the privity of contract with the assessee, the question of compliances with the TDS provisions doesn't apply and the addition so made of Rs. 18,99,026/- is hereby directed to be deleted. 17. Now, coming to the payment of Rs. 21,19,971/- to third parties vendors whi....
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....otels for providing accommodation to the assessee and as and when required, the assessee makes reservations or booking for the hotel where the accommodation is available and which offers the best rate to the assessee. Further, referring to the CBDT Circular No. 5/2002, dated 30.07.2002, it was submitted that the accommodation taken in the assessee's case is not on regular basis since there are no earmarked rooms let out at specified rate and for specified period. In any case, the assessee does not have any "fixed" contract or agreement in pursuance of which the assessee pays charges to various hotels. It was submitted that as a regular practice, the assessee makes hotel reservations at prevailing rates as and when programmes for employees training have to take place and this practice is consistently followed from year-on-year and was accepted by the Assessing Officer in the past in as much as there was no disallowance u/s. 40(a)(ia) of the Act for non-deduction of tax at source from hotel accommodation charges. Further, the reliance was placed on the Coordinate Mumbai Benches decision in the case of Red Chillies Entertainment (P.) Ltd. vs. ACIT [2025] 181 taxmann.com 282 (Mum. Trib....