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TMI Blog2013 (4) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore, it was not the AO to verify the nature of payments to be subjected to the provisions of Chapter XVIIB insofar as the payments authorised to self cannot be termed as payment of salary. Therefore, there was no confusion insofar as the assessee had not deducted tax at source under the provisions of Chapter XVIIB but claimed the payment by whatsoever name called but has been disallowed u/s.40(a)(ia) has to be specifically now considered w.e.f. 1.7.2012 as per the clarification as pointed out by the assessee. Disallowance made u/s.40(a)(ia) for the impugned AY is directed to be deleted - in favour of assessee. - I.T.A.No. 532 of 2012 - - - Dated:- 14-2-2013 - Shri K. K. Gupta And Shri K. S. S. Prasad Rao,JJ. For the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payments have been shown as towards directors salary. However, in the written submissions, the assessee submitted that the payment is not in the nature of salary and also not for providing any professional services. The assessee relied upon the decision given by the ITAT, Kolkata Bench in the case of ITC Ltd. V. DCIT in ITA No.919/KOL/2011 dt.18.11.2011 wherein the ITAT has held that the commission paid was an incentive in addition to salary on which no TDS applies. Hence, the learned CIT(A) held that the said decision is not applicable to the case of the assessee. The assessee has denied the payment to be in the nature of salary and has also denied the payment to be in the nature of professional services. The assessee has not explained a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an amount deductible as salary does not necessarily create employee-employer relationship as considered by the authorities below would be fatal to the very fiduciary relationship held by the Directors when they are executive and non- executive Directors have not been considered by the authorities below. The recipients have rendered the same as taxable in their returns therefore covers the issue that there has been no loss to the Revenue in the impugned Assessment Year itself for attracting the provisions of Section 40(a)(ia). 5. The learned DR supported the orders of the authorities below insofar as the clarity may have been brought on the statute w.e.f. 1.7.2012 but the fact remains that the assessee defaulted in withholding tax under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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