The Tribunal held in favour of revenue
as under:
1) Deduction of tax at source as contemplated by
section 40(a)(ia) needs to be real and not illusory;
2) Deduction of tax at source implies subtraction of
the amount of tax from the amount payable by the assessee to the payee out of
which tax is deductible at source before it is paid to the payee or is credited
to the account of the payee;
3) It is after deduction of such tax from the amount
payable to the payee that the assessee can pay/credit the remaining amount;
4) The law contemplates real deduction of tax at
source out of amount payable by the assessee and not mere book entries by which
such tax is debited to the running account of the payee in the books of the
assessee, unless such entries are supported by actual deduction;
5) There was no evidence before the revenue that tax
was actually deducted by the assessee at source out of the amounts paid or
credited by it to the payees, although such tax was deductible at source;
6) Unless the assessee proves that it has actually
deducted the tax at source out of amounts paid/credited in favour of the
payees, it was not possible to delete the impugned disallowance. Therefore, the
appeal of the assessee was liable to dismissed. - Atul Auto Ltd. v. JCIT [2013] 40 taxmann.com
394 (Rajkot - Trib.)
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