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16. The AR also submitted a written submission, which was duly forwarded to the DR, wherein the AR, further clarified the stand taken by the assessee.

17. On the other hand, the DR placed reliance on the decision of the revenue authorities and justified the disallowance of Rs. 4,99,19,593/- on account of salary and related expenses.

18. We have heard the detailed arguments, perused the evidences placed in APB and the written submissions, placed before us.

19. In so far as provision of section 40(a)(ia) is concerned, it is virtually accepted by the AO in remand proceedings, wherein, the AO submitted, I.T.A. No. 3580 /Mum/2017 M/s ITD ITD CEM JV "the debit notes raised by the ITD Cementation India Ltd were test checked and the amount of expenditure claimed by the assessee was verified and genuineness of the same has been proved by the assessee". In such circumstance, we do not find any reason to sustain the disallowance u/s 40(a)(ia) for non deduction of TAS, as the payments made by the assessee to ITD Cementation was only on account of salaries and related expenses incurred by the company.

33. In any case, the AO in the remand proceedings has accepted the fact that the payments made to ITD Cementation India Ltd. were on account of commission and moreover, this amount is also not an expense as per provision of sec. 40(ba) wherein it is stipulated that in case of association of person, any payment of interest, salary, bonus, commission or I.T.A. No. 3580 /Mum/2017 M/s ITD ITD CEM JV remuneration by whatever name called, made by such association to a member of such association shall not be allowed as deductible expenditure to oppose the aforesaid observations of AO, the assessee submits, that commission was paid to bank by ITD Cementation India Ltd. (co-venture) on behalf of the assessee, and the assessee later reimbursed the same to ITD Cementation India Ltd. It is not a commission payment by the assessee to ITD Cementation India Ltd. warranting any tax deduction at source. Therefore, neither the provision of section 40(a)(ia) nor the provision of 40(ba) of Income Tax Act is attracted in this case. The addition of Rs. 45,80,658/- made by the AO and as such the Counsel for the assessee prayed for deletion of the said payment of commission/addition.

48. Before us, the AR contended that no disallowance has been made in assessment years 2006-07 and 2007- 08, which were framed u/s 143(3). Therefore, according to the AR to carry on a consistent stand, no disallowance is called for, similar treatment to accounts and assessment were accorded on in the two immediate preceding years.

49. In any case, the AO in the remand proceedings has accepted the fact that the payments made to ITD Cementation India Ltd. were on account of administrative expenses incurred by the assessee for which debit notes were raised by ITD Cementation India Ltd were test checked and the amount of expenditure claimed on account of administrative expenses by the assessee was verified and genuineness of the same has been proved by the assessee. It is pertinent to note here that this detail was not given by the auditors in the related party transactions in the Audit report submitted during I.T.A. No. 3580 /Mum/2017 M/s ITD ITD CEM JV the scrutiny proceedings. Moreover, these payments are nothing but payment made to the co-ventures for doing certain job on behalf of the assessee, which clearly attracts the provisions of TDS u/s 193C of the Incometax Act as the same is nothing but contractual payments.

2. Brief facts leading to the issue for adjudication are that the assessee is an "Association of person", formed under Joint Venture agreement entered between ITD Cementation India Ltd. (an Indian Company) and Thai Development Public Company Ltd. (an Italian Company). The assessee is in the business of development of Highway Projects. The assessee was undertaking the construction of By-pass road on National Highway No. 76 at Kota (Rajasthan) on East West Corridor and also undertook rehabilitation and upgrading of 35 kms of highway on NH 25 in the State of Madhyapradesh. There was no material change in the business of assessee during the relevant financial year. In the return of income, the assessee, inter alia, claimed deduction of salary related expenses paid to employees of ITD Cementation India Ltd., aggregating to Rs.4,99,19,593/-. The assessee deducted tax at source from the above said payments by treating the same as Contract payments covered by sec.194C of the Act. The argument of the assessee was that these I.T.A. No. 3580 /Mum/2017 M/s ITD ITD CEM JV expenses were incurred by M/s ITD Cementation Ltd (member of AOP-assessee) on its behalf, which were reimbursed by the assessee. Accordingly it was submitted that they are reimbursements of expenses only. However, the Assessing Officer was of the view that the assessee should have deducted tax at source u/s 192 of the Act and since the assessee has failed to make deduction under section 192 of the Act, the AO disallowed the above said claim under section 40(a)(ia) of the Act. Since the assessee has made the payments to its Member, the AO took the view that the provisions of section 40(ba) of the Act are also attracted and accordingly held that this expenditure is disallowable u/s 40(ba) also. The provisions of sec.