On failure to deduct TDS on web charges amount is disallowable U/s. 40(a)(ia)

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IN THE ITAT DELHI BENCH ‘A’

Assistant Commissioner of Income-tax

v.

Anand & Anand

IT Appeal Nos. 742 & 887 (Delhi) OF 2012
[ASSESSMENT YEAR 2008-09]

OCTOBER 15, 2012

 

Indisputably, payment of Rs. 29,857/- has been made to M/s Network Solutions for downloading software and provisions of sec. 194J of the Act are attracted. The provisions of said sec. 194J lay down that any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of (a) fees for professional services, or (b) fees for technical services, or (c) royalty, or (d) any sum referred to in clause (va) of section 28, shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque of draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent, of such sum as income-tax on income comprised therein. The ld. AR on behalf of the assessee did not deny that tax was required to be deducted at source in terms of the said provisions, but could not be deducted, payment having been made through the credit card by one Shri Gunjit Singh. As is apparent from the aforesaid provisions, mode of payment is immaterial. In these circumstances, when the ld. AR did not deny the applicability of provisions of sec. 194J of the Act, we are of the opinion that the ld. CIT(A) was justified in upholding the disallowance in terms of provisions of sec. 40a(ia) of the Act, TDS having not been deducted on payment made to Network Solutions.