2013 (11) TMI 582

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....t of Rs. 23,66,53,659/- in A.Y.2005-2206 and Rs.16,93,385/- (being 0.50% of the total freight payment of Rs. 33,86,77,052/-) being the disallowance made under section 40(a)(ia) of the IT Act during the year under consideration. 3. Brief facts of the case are that pursuant to search in the case of assessee, the assessments were completed by the AO. The AO observed that for the period relevant to the assessment year 2007- 2008 to 2010-2011 where the server data of the assessee was seized and could be analysed, significant default regarding deduction of tax at source has been found in the case of the assessee-company. It was observed that certain payments without making TDS were made by the assessee during the assessment years 2007-2008 to 20....

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....nical nature. There is no scope for extrapolation in respect of a technical disallowance. Disallowance u/s.40(a)(ia) can be made if it was found that the tax was deductible in respect of a certain payment and the same has not been deducted by the assessee. In this case, during the course of search no material was found to indicate that the assessee has made any payment during the year without making TDS. In such a situation no disallowance could be made on estimate basis merely on the basis of finding for subsequent period. The disallowance of Rs. 11,83,268/- for A.Y.2005-06 and Rs. 16,93,385/- for A.Y.2006-207 were directed to be deleted. 5. The learned DR relied on the order of the AO, and the learned counsel for the assessee reiterated ....