Malineni Babulu (HUF) vs. ITO (ITAT Hyderabad)
by editorThe assessee has received such Forms as prescribed from those persons to whom interest was paid/being paid and accordingly no deduction of tax was to be made in such cases. The default for non-furnishing of
the declarations to the Commissioner of Income-tax as prescribed may result in invoking penalty provisions under section 272A(2)(f), for which separate provision/procedure was prescribed under the Act. However, once Form 15G/ Form 15H was received by the person responsible for deducting
tax, there is no liability to deduct tax. Once there is no liability to deduct tax, it cannot be considered that tax is deductible at source under Chapter XVII-B as prescribed under section 40(a)(ia)
the declarations to the Commissioner of Income-tax as prescribed may result in invoking penalty provisions under section 272A(2)(f), for which separate provision/procedure was prescribed under the Act. However, once Form 15G/ Form 15H was received by the person responsible for deducting
tax, there is no liability to deduct tax. Once there is no liability to deduct tax, it cannot be considered that tax is deductible at source under Chapter XVII-B as prescribed under section 40(a)(ia)
Malineni Babulu (HUF) vs. ITO (ITAT Hyderabad)
| COURT: | ITAT Hyderabad |
| CORAM: | Inturi Rama Rao (AM), P. Madhavi Devi (JM) |
| SECTION(S): | 194A, 197A, 40(a)(ia) |
| GENRE: | Domestic Tax |
| CATCH WORDS: | TDS deduction, TDS disallowance |
| COUNSEL: | S. Rama Rao |
| DATE: | August 7, 2015 (Date of pronouncement) |
| DATE: | August 10, 2015 (Date of publication) |
| AY: | 2009-10 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 40(a)(ia)/ 194A/ 197A(1A): If payer obtains declarations in Form 15G/ 15H, tax is not deductible at source. Failure to furnish such declarations to CIT may attract penalty u/s 272A(2)(f). However, disallowance u/s 40(a)(ia) cannot be made | |
The amount cannot be allowed as deduction only in the event when tax is deductible at source under Chapter-XVIIB and such tax has not been deducted or, after deduction has not been paid. In this case, the assessee was to deduct tax under provisions of section 194A. Section 194A is further qualified by the provisions of section 197A(1A) wherein if a person furnishes a declaration in writing in prescribed Form and verified in the prescribed manner to the effect that tax on his estimated total income is to be included in computing
his total income will be nil, there is no need to deduct tax. The assessee has received such Forms as prescribed from those persons to whom interest was paid/being paid and accordingly no deduction of tax was to be made in such cases. The default for non-furnishing of the declarations to the Commissioner of Income-tax as prescribed may result in invoking penalty provisions under section 272A(2)(f), for which separate provision/procedure was prescribed under the Act. However, once Form 15G/ Form 15H was received by the person responsible for deducting tax, there is no liability to deduct tax. Once there is no liability to deduct tax, it cannot be considered that tax is deductible at source under Chapter XVII-B as prescribed under section 40(a)(ia). The provisions of section 40(a)(ia) can only be invoked in a case where tax is deductible at source and such tax has not been deducted or after deduction has not been paid. No such default occurred in this case.
his total income will be nil, there is no need to deduct tax. The assessee has received such Forms as prescribed from those persons to whom interest was paid/being paid and accordingly no deduction of tax was to be made in such cases. The default for non-furnishing of the declarations to the Commissioner of Income-tax as prescribed may result in invoking penalty provisions under section 272A(2)(f), for which separate provision/procedure was prescribed under the Act. However, once Form 15G/ Form 15H was received by the person responsible for deducting tax, there is no liability to deduct tax. Once there is no liability to deduct tax, it cannot be considered that tax is deductible at source under Chapter XVII-B as prescribed under section 40(a)(ia). The provisions of section 40(a)(ia) can only be invoked in a case where tax is deductible at source and such tax has not been deducted or after deduction has not been paid. No such default occurred in this case.Related Judgements
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Price Waterhouse vs. CIT (Calcutta High Court)
| COURT: | Calcutta High Court |
| CORAM: | Biswanath Somadder J |
| SECTION(S): | 92B |
| GENRE: | Transfer Pricing |
| CATCH WORDS: | ALP, Transfer Pricing, Writ jurisdiction |
| COUNSEL: | Samaraditya Pal |
| DATE: | August 6, 2015 (Date of pronouncement) |
| DATE: | August 10, 2015 (Date of publication) |
| AY: | 2012-13 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 92B(1): If assessee contends that it has not entered into an "international transaction" with an AE, the TPO has to counter that by furnishing relevant information. Failure to do so can be challenged by a Writ Petition | |
The only issue which falls for consideration in the facts and circumstances of the instant case is whether there has been any "international transaction" between the petitioner no. 1 on one hand and PricewaterhouseCoopers Services BV on the other, as defined under section 92B of the Income Tax Act, 1961.
(i) A plain reading of sub-section (1) of section 92B of the Income Tax Act, 1961 reveals that "international transaction" means a transaction between two or more "associated enterprises". Meaning of "associated enterprise" (emphasis supplied) has been statutorily elaborated under section 92A of the Income Tax Act, 1961. Clause (a) under sub-section (1) of section 92A of the Income Tax Act, 1961, spells out that one of the three statutory requirements, i.e. management or control or capital are necessary to be fulfilled for an enterprise to be associated with another enterprise. The kind of management or control or capital required has been further elaborated in sub-section (2) of section 92A of the Income Tax Act, 1961.
(ii) In the facts of the instant case, it is noticed from the records that even after the writ petitioner no.1, by a letter dated 29th April, 2015, replied to the notice dated 24th March, 2015, issued by the Joint Commissioner of Income Tax (Transfer Pricing Officer), Kolkata, taking a specific point that the partnership firm had not entered into any "international transaction" within the meaning of section 92B of the Income Tax Act, during the assessment year 2012 – 2013 nor in any earlier assessment years, the Income Tax authorities have remained conspicuously silent by not furnishing relevant materials based on which it came to a conclusion that there has been an "international transaction" within the meaning of section 92B of the Income Tax Act, 1961. If there is no relevant material in the hands of the Income Tax authorities with which it has come to an incontrovertible conclusion that the petitioner no.1 is an "associated enterprise" of PricewaterhouseCoopers Services BV, within the meaning of section 92A of the Income Tax Act, 1961, the question of issuance of notice dated 24th March, 2015, would not arise. When the petitioner no.1 replied to the said notice by its letter dated 29th April, 2015, the concerned respondent authority ought to have given a reply by supplying such relevant materials with which it come to a conclusion that the petitioner no.1 was an "associated enterprise" of PricewaterhouseCoopers Services BV. The reason why furnishing of such relevant materials were singularly important is that if the petitioner no.1 was not an "associated enterprise" of PricewaterhouseCoopers Services BV, there cannot be any computation of income from "international transaction" having regard to arm's length price as envisaged under section 92 of the Income Tax Act, 1961.
(iii) Undoubtedly, in the facts and circumstances of the instant case, for reasons stated earlier, a prima facie case has been made out for an ad interim order in terms of prayer (g) of the petition. Such ad interim order shall continue until final disposal of the writ petition. (Hindalco Industries Ltd. Vs. Additional Commissioner of Income Tax 2012 211 Taxman 315 (Bom) distinguished)
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CIT vs. Ovira Logistics (P) Ltd (Bombay High Court)
| COURT: | Bombay High Court |
| CORAM: | A. K. Menon J., S. C. Dharmadhikari J |
| SECTION(S): | 43B |
| GENRE: | Domestic Tax |
| CATCH WORDS: | actual payment, service-tax |
| COUNSEL: | P.J. Pardiwalla |
| DATE: | April 17, 2015 (Date of pronouncement) |
| DATE: | August 10, 2015 (Date of publication) |
| AY: | 2007-08 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 43B: Service-tax billed to customer but not collected from him cannot be disallowed u/s 43B on ground of non-payment to treasury | |
Section 43B does not contemplate liability to pay the service tax before actual receipt of the funds in the account of the assesee. Liability to pay service tax into the treasury will arise only upon the assessee receiving the funds and not otherwise. Accordingly, when services are rendered, the liability to pay the service tax in respect of the consideration payable will arise only upon the receipt of such consideration and not otherwise.
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