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TMI Blog2023 (2) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... time of making payment in the succeeding year. Tribunal in the earlier years has specifically held that the TDS is liable to be deducted u/s 192 only at the time of making payment and this view has since been upheld by the High Court. Accordingly, the disallowance made u/s 40(a)(ia) of the Act in all the three years in respect of commission expenses is liable to be deleted. We order accordingly. - I.T.A. No. 2292/Mum/2022 And I.T.A. No. 2293/Mum/2022 And I.T.A. No. 2294/Mum/2022 - - - Dated:- 30-1-2023 - Shri B.R. Baskaran (AM) And Shri Kuldip Singh (JM) For the Assessee : Ms. Krupa Gandhi, CA And Ms. Vidhi Salot For the Department : Ms. Anne Varghese ORDER PER B.R.BASKARAN (AM) :- All the three appeals file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,14,25,645 5,46,30,822 The AO noticed that the assessee has not deducted tax at source from the above said commission expenses u/s 194H of the Act. He further noticed that the assessee had paid similar commission payments to the above said directors in AY 2009-10 to 2013-14 also and the said payments have been disallowed u/s 40(a)(ia) of the Act for non-deduction of tax at source u/s 194H of the Act. It appears that the assessee did not furnish any explanation before the AO in this regard and hence the AO disallowed the above said commission expenses in all the three years u/s 40(a)(ia) of the Act for non-deduction of tax at source u/s 194H of the Act. 4. Before ld CIT(A), the assessee contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the decision rendered by the Tribunal in AY 2009-10 is not applicable to the years under consideration Accordingly, he upheld the disallowance made u/s 40(a)(ia) of the Act on the ground that the assessee has failed to deduct tax u/s 194J of the Act at the time of booking of commission expenses, even though the case of the AO was that the TDS is liable to be deducted on commission expenses u/s 194H of the Act. 6. We heard the parties on this issue and perused the record. We notice that the Ld CIT(A) has misread the common order dated 21.10.2016 passed by the Tribunal for AY 2009-10 and 2010-11 in ITA No.7408/Mum/2012 others. A careful perusal of the order of the Tribunal would show that the commission payable to whole time director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional High Court are extracted below:- 2. The issue herein is regarding disallowance under Section 40(a) (ia) of the said Act for amount of Rs.1,08,00,000/-. The Assessing Officer had noted that Respondent had made a provision for commission for the Chairman and the Managing Director (CMD) of the Company for Rs.1,08,00,000/- at the year end but not deducted TDS under Section 194H of the said Act. The commission was paid to the CMD in the subsequent year, i.e., during the Assessment Year 2010-2011 after deducting TDS. According to Shri Sharma commission provision calls for disallowance under Section 40(a)(ia) in the impugned Assessment Year. 3. Before Commissioner of Income Tax (Appeals) (CIT (A)), respondent had contended that CMD wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1,08,00,000/- paid by assessee in the Assessment Year in question. 7. Section 192 of the said Act, unlike other TDS provisions require deduction of tax at source under the head Salary only at the time of payment and not otherwise. We also find that the quantum of accrual of expenses is not disputed by Revenue and Shri Sharma also stated the same. Since Shri Sharma had in fairness stated that the quantum or accrual of expenses is not disputed, there cannot be any perversity in the order passed by CIT(A) or by ITAT in concurring with the findings of CIT (A). 8. Commissioner of Income tax, Delhi, Ajmer, Rajasthan and Madhya Bharat vs. Nagri Mills Co. Ltd.1, this Court has observed as under: We have often wondered why the Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g decision rendered by Hon ble jurisdictional Bombay High Court, we hold that the assessee is liable to deduct tax at source in respect of commission expenses payable to the whole time directors u/s 192 only, as the same shall form part of their salary payment only. Further, the Ld CIT(A) has given a finding that the assessee has deducted tax at source on the commission expenses at the time of making payment in the succeeding year. The Tribunal in the earlier years has specifically held that the TDS is liable to be deducted u/s 192 of the Act only at the time of making payment and this view has since been upheld by the High Court. Accordingly, the disallowance made u/s 40(a)(ia) of the Act in all the three years in respect of commission exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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