9911796707
TMI Blog2015 (3) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income Tax (Appeals) - 13, Mumbai, under section 250 of the Income-tax Act, 1961, (the Act) on the following amongst other grounds each of which is in the alternative and without prejudice to any others: 1) The CIT(Appeal) erred in upholding the invocation of the provisions of section 40(a)(ia) of the Act and disallowing an amount of Rs. 3,51,246/- being payments made to hospitals for non deduction of TDS u/s 194J. 2) The CIT(Appeal) failed to appreciate that the provisions of section 40(a)(ia) can be invoked for the purposes of making a disallowance of expenditure which has been claimed as a deduction. The said section has no application when no deduction has been claimed by the Appellant in respect of payments made to hospitals. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 194J on the payments made by them to the hospitals. 6) The CIT(Appeal) failed to appreciate that the medical services are availed of by the insured patients. Since the patients (policyholders) are individuals and not liable to deduct tax at source u/s. 194J of the Act, there was no obligation on the Appellant to deduct tax at source under the said section. 7) The CIT(Appeal) failed to appreciate that the Appellant has been deducting tax at source on payments made to hospitals since 24-11-2009. Default, if any, of non-deduction of tax at source prior thereto was bonafide and therefore no disallowance ought to have been made in respect of such payments under section 40(a)(ia) of the Act. 8) The CIT(Appeal) erred in making an addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are aggrieved by the impugned order of the CIT(A) and filed cross appeals before us. 3. Ld. AR of the Assessee has submitted that the assessee is only facilitating the payments by the insurer to the insured for availing the medical facility. The assessee has not rendered any professional services to the insurer or insured but only collecting the amount from the insurer and passed it to the various hospitals who were providing various services to the insured. Therefore, the provisions of section 40(a)(ia) are not applicable for disallowance of the amount which is not claimed as expenditure by the assessee. In support of his contention he has relied upon the following decisions :- 1. Health India TPA Services P. Ltd., Mumbai Appeal No.ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. vs. DCIT (TDS) and Others (324 ITR 356). Therefore, as per the provisions of section 194J the assessee was bound to deduct TDS in respect of these payments. 5. We have considered the rival submissions as well as relevant material on record. As far as the applicability of section 194J is concerned the said issue is now settled by the decision of Hon'ble High Court of Karnataka in the case of Medi Assist India TPA P. Ltd. vs. DCIT (TDS) and Others (324 ITR 356) (supra), wherein the Hon'ble High Court held that it is the duty and obligation of the TPA to pay the hospitals and insurer will not have any to role to play in as much as it is only to replenish the amount in the floating account once the amount deposited therein is adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no claim of expenditure by the assessee, disallowance under section 40A(i)(a) as was done by the Assessing Officer does not arise. It may be different issue that the amounts paid may be covered by provisions of section 194J as was held by the Hon'ble Karnataka High Court in the case of - The MediAssesst India TPA Pvt. Ltd. vs. DCIT-18(1J, Bangalore (WP.No.11376/2009 (T-IT ) relied upon by the Assessing Officer. In that case, provisions of section 201 was applicable but certainly disallowance under section 40(a)(ia) does not arise as Assessee is not claiming any such expenditure in its Profit & Loss account. Moreover Revenue accepted the order of CIT(A) in the earlier year. For these reasons, we uphold the order of the CIT(A)." 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
