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of <h1>Revenue's Appeal Dismissed in TDS Disallowance Case, Tribunal Upholds Commissioner's Decision</h1> <h3>Deputy Commissioner Of Income Tax Versus M/s DHARA ENTERPRISE</h3> Deputy Commissioner Of Income Tax Versus M/s DHARA ENTERPRISE - TMI Issues:Appeal against order of Commissioner of Income-Tax regarding deletion of expenses disallowance under section 40(a)(ia) of the Act.Analysis:The Revenue appealed against the Commissioner's order deleting the addition of expenses not deductible due to contravention of section 40(a)(ia) of the Act. The Assessing Officer (AO) disallowed deduction for expenditure of Rs. 10,66,200 paid to subcontractors as TDS was not paid within the prescribed time. However, the Commissioner observed that TDS was deposited before the due date of filing the return under section 139(1) of the Act. The Commissioner relied on ITAT decisions in favor of the assessee, stating that the amendment to section 40(a)(ia) was retrospective, allowing deduction for expenses with timely TDS deposit.The Revenue, represented by the DR, supported the AO's order. Despite the notice sent to the respondent-assessee being returned unserved, the appeal was heard ex parte, considering the DR's submission. The Tribunal noted that the assessee had deducted TDS on the payment to subcontractors and deposited it before the return filing due date. The AO's disallowance under section 40(a)(ia) was based on the view that the amendment by the Finance Act, 2010 was not retrospective for the relevant assessment year. However, the Commissioner's decision was upheld, citing lack of contrary decisions and the retrospective nature of the amendment.Additionally, the Tribunal referred to the judgment of the Hon'ble Calcutta High Court in a similar case, holding that if TDS payment is made before the due date of filing the return, no addition under section 40(a)(ia) can be made. As the TDS payment was made timely in this case, the Commissioner's deletion of the addition was justified. Consequently, the Tribunal confirmed the Commissioner's order and dismissed the Revenue's appeal.In conclusion, the appeal of the Revenue was dismissed, affirming the Commissioner's decision.
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