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| The Tax Publishers2020 TaxPub(DT) 5475 (Bang-Trib) INCOME TAX ACT, 1961
Section 37(1)
Payments were made for purchase of software prior to the date of pronouncement of decision by Karnataka High Court in case of Samsung Electronics Company Ltd. 345 ITR 494 and also prior to the amendment of section 9(1)(vi) of the Act. Accordingly, there could be no disallowance under section 40(a)(ia) on sbsequent development of law after the date on which payments were made.
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Business disallowance under section 40(a)(ia) - Non-deduction of tax at sources - Disallowance based on subsequent decision rendered by High Court -
Assessee claimed deduction of payment made towards purchase of software. AO based on decision rendered by jurisdictional High Court on 15-10-2011 in case of Samsung Electronics Co. Ltd. 345 ITR 494 (Karn HC) and relying on section 9(1)(vi) as amended, disallowed deduction for want of TDS under section 195 treating payment made by assesse as royalty. Held: Payments were made for purchase of software prior to the date of pronouncement of decision by Karnataka High Court in case of Samsung Electronics Company Ltd. (supra) and also prior to the amendment of section 9(1)(vi) of the Act. Accordingly there could be no disallowance under section 40(a)(ia) on sbsequent development of law after the date on which payments were made.
Followed:Infineon Technologies India (P) Ltd. [IT(TP)A No. 405/Bang/2015] : 2020 TaxPub(DT) 3459 (Bang-Trib).
REFERRED : CIT v. Samsung Electronics Co. Ltd. (2010) 320 ITR 209 (Karn-HC) : 2010 TaxPub(DT) 832 (Karn-HC).
FAVOUR : In assessee's favour.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 37(1)
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