2017 (7) TMI 1235 - HC - Income Tax

Disallowance u/s 40(a)(ia) - CIT(A) deleted the addition - Assessee has not claimed any expenditure while computing its income chargeable to tax - Held that - The appellant fairly concedes that the questions raised in the present appeal are covered by the judgment of this court in COMMISSIONER OF INCOME TAX-2, MUMBAI VERSUS HEALTH INDIA TPA SERVICES PVT. LTD. 2015 (12) TMI 568 - BOMBAY HIGH COURT it is clear from plain reading of Section 40(a)(ia) of the Act that the failure to deduct the TDS in the absence of the same having been claimed as an expenditure while determining the income, would not attract disallowance. The consequence of failure to deduct the tax is found in Section 201 of the Act and it does not in any way permit the addition of an amount, which has not subjected tax deduction at source. The Sine qua non for the application of Section 40(a)(ia) of the Act to apply is claiming of the amount sought to be disallowed as an expenditure / deduction to determine the taxable income of the assessee. Present appeal stands dismissed. - Decided against the Revenue.

Summary

The High Court of Bombay dismissed the appeal for Assessment Year 2009-2010, stating that the issues raised were covered by a previous judgment dated 30th November 2015. The appeal was held against the Revenue, and no costs were awarded.