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TMI Blog2023 (2) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... mbursement to Mr. Pankaj Dalal. The addition therefore requires to be deleted. Software consultancy charges paid to Orbit Software - As pointed out that assessee has deducted tax at source on the above sum. This fact has also been recorded in the order of CIT (A) that assessee has already deducted tax at source on sum paid to Orbit Software. As the ld CIT (A) has also recorded the factum of payment on which tax is deducted, there is no reason to sustain the disallowance. Accordingly, disallowance is not correct. It is also deleted. Software consultancy charges paid to M/s Springfield Organics - Software is goods therefore, in the given instance; it cannot be subjected to tax deduction at source - this fact needs to be verified by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax at source on i. payment of car hire charges which is reimbursed to the directors of the company amounting to ₹60,000/-, ii. software consultancy charges paid to Orbit Software amounting to ₹7,71,752/- and s iii. Software consultancy charges paid to M/s Springfield Organics amounting to ₹7,00,000/-. Accordingly, the addition of ₹1,531,752/ was made on account of non-deduction of tax at source on various payments under section 40 (a) (ia) of the Act. 04. The assessee being aggrieved with the order of the learned assessing officer preferred an appeal before the learned CIT (A), who confirmed the above-mentioned disallowance by passing an order dated 29th September, 2008. Therefore, the assessee is agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shtra in the case of Mastek Ltd. (DDQ 11-2001/ADM-5/83/D-7 dated 3rd August, 2004, clearly covers the issue that where software developed specifically for a customer was held to be goods and since tax was levied thereon. If the sale tax was levied, it was sale of goods and no tax was required to be deducted therefore, there is no violation of the provisions of section 40(a)(ia) of the Act. iii. With respect to the disallowance of ₹60,000/- for non-deduction of tax, the assessee submitted that this payment was made as reimbursement of expenses to Mr. Pankaj Dalal, who is Director of the assessee company as car hire charges. During the course of appellate proceedings assessee also gave name of four different persons to whom the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment is in the nature of reimbursement and paid to Mr. Pankaj Dalal, we find that no tax is required to be deducted at source on amount reimbursement to Mr. Pankaj Dalal. The addition therefore requires to be deleted to the extent of ₹60,000/-. ii. With respect to the software consultancy charges to Orbit Software paid of ₹771,752/ , it was pointed out that assessee has deducted tax at source on the above sum. This fact has also been recorded in the order of the learned CIT (A) at para number 3.4 that assessee has already deducted tax at source on sum of ₹7,71,752/ paid to Orbit Software. As the ld CIT (A) has also recorded the factum of payment on which tax is deducted, there is no reason to sustain the disallowance. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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