Tata Consultancy Services Ltd. v. Dy. CIT [2023] 154 taxmann.com 372 / (2025) 129 ITR 667 (Mum.)(Trib.)

S. 40(a)(ia): Amounts not deductible-Deduction at source-Year-end provisions-Vendors not identifiable-Liability to deduct tax arises only on identification of payee-Disallowance deleted.[S.37(1), 145]

The assessee created year-end provisions for expenses before receipt of vendors’ invoices and without crediting individual vendors’ accounts. The Tribunal held that, until the payees became identifiable and the debtor-creditor relationship came into existence, there was no obligation to deduct tax at source. Accordingly, the disallowance under section 40(a)(ia) was deleted. (AY. 2014-15).

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