2014 (11) TMI 1147 - AT - Income Tax

Additions u/s 40(a)(ia) - payment made by the assessee to HRTC towards the reimbursement of expenses - Held that - Tribunal in the case of the same assessee 2013 (12) TMI 1641 - ITAT CHANDIGARH no tax was required to be deducted u/s 194J. TDS is not applicable on the payments made to HRTC as being reimbursement of expenses - Decided in favour of assessee.

Summary

Issues:
Revenue appeals against CIT (Appeals) order deleting additions under section 40(a)(ia) of the Income Tax Act for payment made to HRTC towards reimbursement of expenses.

Analysis:
In this case, the Revenue challenged the CIT (Appeals) order deleting additions made by the Assessing Officer under section 40(a)(ia) of the Income Tax Act concerning payments to HRTC for expense reimbursement. The issue was consistent across all assessment years, leading to a joint decision on all appeals based on the facts from the 2007-08 assessment year.

The Assessing Officer found discrepancies in the original assessment for 2007-08, where the assessee failed to collect and deposit tax on parking space income and did not deduct tax at source on various expenditures. Consequently, the assessment was reopened, and additions were made under section 40(a)(ia) of the Income Tax Act. The assessee contended that the additions were unjust as they were related to payments to HRTC, which were not subject to TDS as per a Tribunal order from 2013.

The CIT (Appeals) and subsequently the Tribunal relied on the 2013 Tribunal order, which clarified that TDS did not apply to payments made to HRTC as reimbursement of expenses. Following this precedent, the CIT (Appeals) allowed the appeals of the assessee and deleted the additions, a decision upheld by the Tribunal in the current case.

Upon reviewing the submissions and the previous Tribunal order, the ITAT Chandigarh found no merit in the Revenue's appeal. The Tribunal affirmed the CIT (Appeals) decision to delete the additions based on the precedent set by the 2013 Tribunal order, which favored the assessee. Consequently, all Departmental appeals were dismissed, upholding the decision to reject the Revenue's appeals and affirm the deletion of additions.

In conclusion, the ITAT Chandigarh dismissed all Revenue appeals, maintaining the deletion of additions under section 40(a)(ia) of the Income Tax Act for payments made to HRTC as reimbursement of expenses, in line with the precedent established by a previous Tribunal order.