9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 1488 - AT - Income TaxDisallowance made u/s 14A r.w.r. 8D - Held that - As per the settled principle of law as it stands now, in absence of any exempt income earned in a particular assessment year, no disallowance u/s.14A can be made. Therefore, only because the assessee itself has made some disallowance under section.14A of the Act, it cannot be utilized to his detriment as there is no estoppel against law. Thus we direct the Assessing Officer to examine assessee s claim that in the relevant previous year, it has not earned any exempt income. In case the aforesaid claim of the assessee is found to be correct; no disallowance under section 14A can be made. TDS u/s 194J - Disallowance u/s.40(a)(ia) - payment was made by the assessee towards terminal charges for accessing online information and data base of Bloomberg Data Services Pvt. Ltd - Held that - The payment made by the assessee not being in the nature of fee for technical services as per the provision of the 194J of the Act, it does not require deduction of tax at source. Therefore, we delete the disallowance made by the Assessing Officer and sustained by the Commissioner (Appeals). Levy of interest under section. 234C - Held that - Levy of interest under section 234C of the ACT has to be made on the basis of income returned by the assessee. Moreover, there is no clarity on what basis the Assessing Officer has charged interest under section 234C as there is huge difference between the computation of interest under section 234C of the assessee and the Assessing Officer. Therefore, we are inclined to restore this issue to the Assessing Officer for verifying assessee s claim after due opportunity of being heard. This ground is allowed for statistical purposes.
Issues:
1. Disallowance under section 14A r.w.r. 8D 2. Disallowance u/s.40(a)(ia) of the Act 3. Levy of interest under section 234C of the Act Issue 1: Disallowance under section 14A r.w.r. 8D The appeal pertains to disallowance made under section 14A r.w.r. 8D. The assessee, a broker, voluntarily disallowed an amount under section 14A, which the Assessing Officer further disallowed under Rule 8D(2). The Commissioner (Appeals) restricted the disallowance to the amount already disallowed by the assessee. The AR contended that since no exempt income was earned, no disallowance should be made under section 14A. The Tribunal agreed, citing legal precedents, emphasizing that in the absence of exempt income, no disallowance can be imposed under section 14A. The Tribunal directed the Assessing Officer to verify the claim that no exempt income was earned during the relevant year. Issue 2: Disallowance u/s.40(a)(ia) of the Act The Assessing Officer disallowed a payment made to a company under section 40(a)(ia) for not deducting tax at source. The Commissioner (Appeals) upheld the disallowance, considering the payment for professional and technical services. However, the Tribunal found that the payment was for accessing online information and data, not technical services, based on invoices and a letter from the company. Citing relevant case law, the Tribunal ruled that the payment did not require TDS deduction, overturning the disallowance. Issue 3: Levy of interest under section 234C of the Act The assessee challenged the interest levied under section 234C, arguing it should be based on the income returned, not determined by the Assessing Officer. The Tribunal noted a significant disparity in the interest amount calculated by the assessee and the Assessing Officer. Agreeing with the assessee, the Tribunal directed the Assessing Officer to reevaluate the interest calculation based on the returned income. The issue was allowed for statistical purposes. In conclusion, the Tribunal partly allowed the assessee's appeal, ruling in favor of the assessee on the disallowance under section 14A and u/s.40(a)(ia) of the Act, and directing a review of the interest levy under section 234C. The judgment emphasized adherence to legal principles and precedents in determining disallowances and interest charges.
|
