TaxTMI 
TaxTMI 
2011 (4) TMI 443
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....ommission and labour charges and exclusion of interest income of Rs.1,30,998/- in view of section 40[a][ia]. 3. The Ld. Commissioner of Income Tax [A] erred in stating that 25% of mobile expenses of Rs.67,705/- = Rs.16,926/- = 20% of the residential phone expenses of Rs.1,10,127 = Rs.22,025/- which totals to Rs.38,951/- but the Ld. Commissioner of Income Tax [A] erred in confirming the disallowance of Rs.44,458/- on account of telephone expenses on estimation basis in view of section 37[1] of the Income Tax Act, 1961. 4. The Ld. Commissioner of Income Tax [A] erred in confirming the disallowance of Rs.1,33,139/- on account of vehicle expenses [20% of the vehicle expenses of Rs.6,65,697/-]. 5. The Ld. Commission....
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....ubmission of the appellant and also perused the order of the AO. Admittedly and evidently, the appellant itself in the statement of income filed along with the return of income has disallowed an amount of Rs.5,31,511/-, being amounts not deductible u/s.40(a)(ia) for late payment of TDS. This fact has also been admitted by the Annual Report's of the appellant in the aforesaid submissions. This being an admitted fact, the AO has thus not made any independent disallowance on his own. But the disallowance is based on the computation of income as per the audited accounts and the audit report filed by the Appellant, wherein the appellant itself has made the disallowance. This being an admitted fact and the AO having not made any disallowance on t....
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....aintainable as law itself stands amended. Secondly, he argued that in any case, if this disallowance is to be made then such disallowance would increase the business income and accordingly deduction u/s.80IB should have been increased. 5. On the other hand, ld. DR submitted that the CIT[A] has decided this issue because no such disallowance was made by the AO and assessee has itself disallowed the sum on account of late payment of TDS. Therefore, assessee cannot be said to be aggrieved by the order of the CIT[A] on this issue. In this regard, he relied on the decision of the Tribunal in the case of Season Rubbers Ltd. vs. DCIT [75 ITD 95] (Coch). She further argued that, in any case, when assessee itself disallowed the sum, natura....
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....sessment itself was time barred which ground was not raised before the Commissioner [Appeals]. On these facts, it was held that no additional ground could be raised because there was no appeal pending before the Tribunal. However, in this very case in para-9 it was observed that "when valid appeal filed by the assessee is pending before the Tribunal, there is no doubt that assessee can raise a new or additional ground. That had not been raised either before the Revenue authorities". Thus, it is clear that in the case of Season Rubbers Ltd. vs. DCIT [supra], the only issue was whether an additional ground could be raised when no valid appeal was pending before the Tribunal. In the case before us, first of all, this ground was raised even bef....
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....ear before the expiry of the time prescribed under subsection (1) of section 200." Thus, it is clear from the above comparison that before the amendment, the disallowance could be made if tax was not paid during the previous year or during the subsequent year as prescribed under the rules. However, after the amendment even if tax was paid before the due date of filing of the return u/s.139[1], then no disallowance should be made under this provision. Therefore, we set aside the order of the ld. CIT[A] and remit the matter back to the file of the AO with a direction to allow the amount of disallowance on account of commission and labour charges if assessee has paid this sum before the due date of filing of the return. This amount s....
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....essee has already paid FBT on these two amounts and, therefore, disallowance was not justified. In this regard he referred to Annexure I of the tax audit report and pointed out that a sum of Rs.1,33,139/- and Rs.76,272/- were considered for FBT purposes under the head "vehicle maintenance and telephone expenditure'. He also relied on the decision of the Chandigarh Bench of the Tribunal in the case of Adelta Optee vs. ITO in I.T.A.No.1255/Chd/2009, wherein it was held that once assessee has paid FBT then such expenditure could not be disallowed for personal use. 11. On the other hand, ld. DR relied on the order of the CIT[A]. 12. We have considered the rival submissions carefully and find force in the submissions of the L....