M/S Subex Technologies Limited, ... vs Jcit, Bangalore on 6 September, 2022
Products P Ltd., vs. Dy. CIT [2021] 277 Taxman 22 (Kar.). This
case does not apply to in the present case, where the Hon.
Karnataka High Court remanded the Hon. Tribunal to
examine the issue afresh under section 40(a)(i) of the I.T.Act.
In the instant case, the lower authorities had all the details
and were convinced of the correctness of claim under section
37(1) of the I.T.Act proceeded to disallow under section 40(a)(i)
of the I.T.Act. The very fact that section 40(a)(i) of the I.T.Act
was invoked by the lower authorities also establishes that the
claim under section 37(1) of the I.T.Act was found admissible.
If the claim under section 37(1) of the I.T.Act is not found
admissible, there is no case for department to proceed to
invoke section 40(a)(i) of the I.T.Act. In fact, while holding that
TDS is required to be made, the lower authorities held that
not only services were rendered by Subex Technologies lnc,
even the technology was made available to the assessee. This
itself proves that lower authorities were satisfied the
expenditure was laid out or expended for the purpose of
business of the assessee. Hence, the facts in the above case
are distinguishable to the facts of the present case. Therefore,
the above case is not applicable in the present case.