Add description for your Article from here.These case coomenced between the Motila Oswal
commodities and Deputy Commisioner of Income Tax
department Mumbai.The present appeal has been
preffered by the assesse(one upon whom payment is
assessed) against the order dated 28 th august 2015 of the
commissioner of Income Tax. The only ground in this
appeal is regarding dissallowance of lease line charges of
Rs.3,06,360/- under section 40(a)(ia) of the Act. [Section
40(a)(ia) of the Income Tax Act,1961,any amount
payable to any Indian resident person tax is to be
deducted under chapter XVII-B. If tax is not deducted or
after deducting tax, has not been deposited before
submission of return of Income u/s 139(9) of the Act,
30% of the amount is disallowed.]During the year the
assesse made the payment of lease line charges of
Rs.3,06,360/- to MTNL Mumbai, MCX and TATA services.It
is grouped under the head “Telephone and Lease Line
charges”in the Profit and Loss a/c no TDS was deducted on
the siad expenses. Detailed reasoning was given by the
company with various previous case laws son no
dissalowance is made.
The accounting officer gave various case laws and
matter taken to the Ld.CITand the Ld CIT(A) has partly
allowed the appeal os assesse. Ld.D.R allowed to process
accordingly. They heard the heated argument of both the
parties and find that issue is controvrseal. Further they
stated that lease line cannot be considered as the
rendering of the technical services and hence provision of
section not attracted.the AO disalowed the above amount
invoking section 40(a)(ia) on the groundd that assesse not
able to comply with the applicable TDS provisions. But the
grounds stated by revenue are :
1)Ld CIT erreed in deletion of additional amount but ao has
rightly treated the vanda as speculation under 73 as per of
Act
.
2)VSAT is the part of the computer and it is eligible for the
depreciation@60% but appreciating fact that VSAT essentially
par of communication so eliegible for @25%
3)AO observed during the assessement that assesse has claimed
depreciation on VSAT @60%.According to AO the the VSAT not
the part of computer system but the communication part As AO
sued the show caused notice why the VSAT is part of the
computersystem and not the communication system.
In appallet preceedings the Ld.CIT(A) allowedd appeal of the
assesse.it was all occur because the assesse not incurred the
profit
Objection has been made as the Ld CIT(A) ought to have
held that the Education cess and Higher Education Cess paid by
assess is allowed as deduction while computing business income
of assesse.As this responses done till the final petition.Cross
objection was filed delayed of 181 days.
In further proceedings the issue raised of education cess and
higher education cess was not claimed in the return of income
and was being claimed for the 1 st time.Ld DR opposed the further
grounds and request to that without prejudice take decision after
verification of the fact.
According to the Hon’ble High court(Bombay)has
concluded that there was no prohibition on the the deduction on
the any amount paid towards “cess”while computing the head
“profits and gains of the business”
In the result the appeal of the revenue is dismissd and the
cross objection of the assesse is allwed. This was done Between
the Judicial Membar and the Account Member in Mumbai.