NON DEDUCTION OF TDS FOR PAYMENT MADE BY SUBSIDIARY COMPANY TO HOLDING COMPANY, Income Tax

[S SHANMUGASUNDARAM]

An 100% Subsidiary compamy has paid the holding company as service charges during the financial year 2007-08. At the time of making payment TDS has not been deducted. The holding company accounted the service charges received from the subsidiary company and paid Tax as applicable. Now the A.O is proposed to disallow the expenditure u/S 40(a)(ia) in the subsidiary company as the subsidiary has not deducted the TDS at the time of making payment. Whether the CBDT Circular No.275/201/95-IT(B) dt.29.01.1997 will be applicable.

Posts / Replies

[Mukesh Kumar]

That may be relevant for proceedings under section 201 but is not relevant for disallowance under section 40(a)(ia)