Assessee sold a immovable property and declared Long-Term Capital Gain. Assessee had paid commission of certain amount in connection with sale of said property. Assessing Officer held that as the assessee did not deduct tax at source under section 194H on such commission paid, made disallowance under section 40(a)(ia) of the Act. On appeal the Tribunal held that provisions of section 40(a)(ia) would not be applicable while computing income under head capital gain. Accordingly the disallowance was deleted. (AY. 2006-07)
R. K. Associates. v. ITO (2021) 187 ITD 827 (Bang.)(Trib.)
S. 40(a)(ia) : Amounts not deductible-Deduction at source-Long term capital gains on sale of immoveable property-Commission paid without deduction of tax at source-No disallowance can be made while computing the income under the head capital gain. [S. 45, 194H]