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TMI Blog2021 (2) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of section 40(a)(ia) of the Income Tax Act, 1961 (hereinafter called 'the Act'), while computing income under the head "Capital Gain". 3. The assessee is a partnership firm. The assessee filed the return of income declaring loss of Rs. 1,47,535/-. The computation of the total income of the assessee was as follows: 4. The computation of income under the head "Capital Gain" as given by the assessee was as follows: 5. It can be seen from the computation of income under the head "Capital Gains" that the assessee had deducted a sum of Rs. 76,99,056/- on account of commission while computing income under the head "Long Term Capital Gain". The assessee had sold a property and declared Long Term Capital Gain (LTCG) on sale of prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is assessee in default in respect of such tax as per the provisions of section 201 of the Act. 8. As discussed above, since the provisions of section 40 (a) (ia) of the Act are not applicable thus the alternative contention of the appellant that the disallowance will be restricted to 30% of expenditure as per the provisions of this section applicable in the year under consideration, doesn't have any relevance." 7. Aggrieved by the order of the CIT(A), assessee is in appeal before the Tribunal. I have heard the rival submissions. The learned DR relied on the order of the CIT(A). The learned counsel for the Assessee reiterated the stand of the Assessee as put forth before the CIT(A). 8. I have considered the rival submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee referred to in the said proviso.] Explanation.-For the purposes of this sub-clause,- (i) "commission or brokerage" shall have the same meaning as in clause (i) of the Explanation to section 194H; (ii) "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9; (iii) "professional services" shall have the same meaning as in clause (a) of the Explanation to section 194J; (iv) "work" shall have the same meaning as in Explanation III to section 194C; (v) "rent" shall have the same meaning as in clause (i) to the Explanation to section 194-I; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of CIT Vs. Sushila Mallick (2013) 36 taxmann.com 537 (All). In the case of Mahatma Gandhi Seva Mandir vs. DDIT(Exemp) reported in (2012) 21 taxmann. com 321 the Hon'ble ITAT Mumbai has held that the exception in Section 40 is carved out, only for the purpose of Section 28 and not for computing the exemption of income of a charitable trust under Section 11. The disallowance made under Section 40(a) will only go to enhance the business profit of an assessee whose income is assessable under Section 28 and not otherwise. Hence, provisions of Section 40(a) are not applicable in case of charitable trust or institution where income and expenditure is computed in terms of Section 11. 10. In view of the clear language of the relevant statutory p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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