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1) Disallowances of Rs. 51,74,337/- u/s. 14A of the Act.

2) Payment made to foreign company i.e., M/s. Hardy Exploration & Production India Inc (HEPI) towards purchase of crude oil as the assessee had failed to deduct TDS of Rs. 61,23,06,054/-.

3) On account of payment made to MRL Ind. Co-op. Service Society of Rs. 4,59,59,000/- and Chennai Metro of Rs. 28,41,000/- on the ground that no tax was deducted at source.

4) The social community welfare expenses of Rs. 18,04,853/-.

2.3 It is submitted that the Delhi Tribunal in the case of ACIT Vs Sun Investments reported in 8 ITR (Tn) 33 have held that unless the assessing officer established that specific expenditure has been incurred by the assessee for earning exempt income there can be no disallowance under Section 14A.
3. The Commissioner of Income tax (Appeals), LTU erred in confirming the disallowance of Rs.61,23,06,0541- u/s 40(a)(i) as the appellant had not deducted TDS from the payments made to Hardy Exploration and Production India Inc u/s 195.

1. Disallowance u/s. 14A 11,56,000
2. Payment to CMWSSB disallowed u/s. 37,32,000 40(a)(ia) [para 4.4]
3. Payment to Indocoserve disallowed u/s. 4,29,31,868 40(a)(ia) [para 4.6]
4. Payment to Hardy Exploration disallowed 24,71,39,263 u/s. 40(a)(ia) [para 5.8]
5. Payment to Niko Ltd. disallowed u/s. 15,83,20,443 40(a)(ia) [para 5.9]

Disallowance u/s 40(a)(ia) can be made only in respect of amounts outstanding and payable as on 3l' march and not the amounts which have been paid during the previous year. Merilyn Shipping and Transports V. ACIT, reported in 16 ITRTrib) I (Vis)(SB). Vector Shipping 85 CCH 201 (All. H.C).

5. The Commissioner of Income tax (Appeals), LTU erred in confirming the disallowance of Rs.24,71,39,263/- u/s 40(a)(i)for non- deduction TDS from the payments made to Hardy Exploration and Production India Inc u/s 195.