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TMI Blog2017 (1) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee hospital has not debited the said expenditure to its P & L account. Once the amount paid has not been claimed as expenditure, there cannot be any question of disallowance of the same. When an expenditure has not been claimed at all, how can the same be disallowed. Without going into further aspects of the matter, the disallowance in this case under section 40(a)(ia) of the Act, is not attracted at all. The same is accordingly ordered to be deleted. - Decided in favour of assessee Addition of Bisi payment under section 69C - Held that:- This issue requires re-examination at the hands of the AO. If the assessee will be able to prove that the Bisi payments were out of the income declared during survey action then the same cannot be tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n confirming the disallowance of ₹ 11950669/- under section 40(a)(ia) on account of non deduction of tax at source on the payments made by the assessee hospital to the doctors and pathology laboratory in relation to inpatients. 4. The brief facts of the case are that the assessee hospital provides consultation services of specialist doctors as well as pathology laboratory to its in and out patients. During the year under consideration, assessee collected fees amounting to ₹ 1,52,65,276/- on behalf of doctors and ₹ 38,85,393/- for pathology lab totaling ₹ 1,91,50,669/-. The collected payments were directly handed over to the respective doctors and pathology laboratories without debiting the same in the profit and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payments made to the doctors and pathology laboratory, hence there was no question of disallowance of expenditure under section 40(a)(ia) in respect of the above stated payments. The AO however observed that there was no written agreement available of the hospital with the said doctors and pathology laboratory that the assessee had collected fees from the patients on its own behalf and further the payment was remitted to the concerned doctors and pathology laboratory without deducting TDS. He, therefore, made the disallowance of the entire payment invoking the provisions of section 40(a)(ia) of the Act. Being aggrieved by the above disallowance the assessee preferred appeal before the Ld. CIT(A). 5. The Ld. CIT(A), after considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry in respect of inpatients. Being aggrieved by the above order of the Ld. CIT(A), the assessee has come in appeal before us. 7. The Revenue has also come in appeal agitating the relief granted by the Ld. CIT(A) on payments remitted to doctors in respect of out patients. The Revenue has also agitated the action of the Ld. CIT(A) in relying upon the decision of the special Bench of the Tribunal in the case of Merling Shipping and Transports vs. ACIT 136 ITD (Visakhapatnam) (23) with regard to the applicability of section 40(a)(ia) wherein the Tribunal has held that the provisions of section 40(a)(ia) are not applicable to payments actually made during the accounting period and that the provisions of section 40(a)(ia) would be applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenditure; that too on account of non deduction of TDS as per the provisions of section 194J of the Act. The disallowance has been made accordingly under section 40(a)(ia) of the Act. Admittedly, the assessee hospital has not debited the said expenditure to its P L account. Once the amount paid has not been claimed as expenditure, there cannot be any question of disallowance of the same. When an expenditure has not been claimed at all, how can the same be disallowed. Without going into further aspects of the matter, the disallowance in this case under section 40(a)(ia) of the Act, is not attracted at all. The same is accordingly ordered to be deleted. 9. Vide ground No.4, the assessee has agitated the addition of Bisi payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich doesn't contain Bisi payments) in the revised balance sheet. In view of this, it cannot be considered that the additional income offered of ₹ 27,03,620/- is used for Bisi payments. The appellant's contentions are not accepted. Addition is upheld. 1. We have heard the rival contentions and have also gone through the records. In our view, this issue requires re-examination at the hands of the AO. If the assessee will be able to prove that the Bisi payments were out of the income declared during survey action then the same cannot be taxed twice. We therefore restore this issue to the file of the AO with a direction to decide the same afresh. Needless to say that the AO will give proper opportunity to the assessee to expla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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