TaxTMI 
TaxTMI 
2014 (12) TMI 1105
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....erred in upholding the disallowance of Rs. 21,62,784/- which was disallowed by the Assessing Officer with the aid of section 40(a)(ia) of the Income Tax Act on the ground that the assessee failed to deduct the TDS u/s 194H of the Income Tax Act. 2. The brief facts of the case are that the assessee is an individual. She is in the business of manufacturing and trading of bakery products. She has filed her return of income on 30.10.2006 declaring an income of Rs. 10,19,352/-. The case of the assessee was selected for scrutiny assessment and a notices u/s 143(2) and 142(1) were issued and served upon the assessee. 3. On scrutiny of the accounts, it revealed to the Assessing Officer that the assessee has debited a sum of Rs. 21,62,784/- on....
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....arned DR on the other hand contended that this plea was not taken by the assessee before the Assessing Officer. Therefore, this aspect was not verified. It is not discernible from the record, whether the assessee has paid the amount or not?. This aspect needs to be verified. 6. The learned Counsel for the assessee further contended that it is to be adjudicated, whether the payment made by her were in the nature of commission payment or a license fee for using the aircraft of the Air Deccan?. The assessee is disputing the 20% of the gross sale, rest 10% were paid by her towards services provided by the cabin crew. 7. We have duly considered the rival contentions and gone through the record carefully. The ITAT in the case of Shri Ananda....
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....s. ITO in ITA No. 1418(Kol.)/09 has held that provisions of Section 40(a)(ia) of the Act are applicable to even sums paid during the year. In the case of Teja Construction vs. ACIT reported in 39 SOT 13 the Hon'ble Hyderabad ITAT has decided the issue against the Revenue and has held that provisions of Section 40(a)(ia) of the Act are not applicable in respect of sums/amount paid during the year and which are not payable at end of the year on date of balance sheet, as it is applicable only in respect of "Payable amount" shown in balance sheet as outstanding expenses on which TDS has not been made. Similar laws were laid in various other cases. To resolve the above issue Special Bench was constituted and the Hon'ble Visakhapatnam Speci....
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....remain so payable throughout during the year. If the assessee's interpretation is accepted, it would lead to a situation where the assessee who though was required to deduct the tax at source but no such deduction was made or more flagrantly deduction though made is not paid to the Government, would escape the consequence only because the amount was already paid over before the end of the year in contrast to another assessee who would otherwise be in similar situation but in whose case the amount remained payable till the end of the year. There is no logic why the legislature would have desired to bring about such irreconcilable and diverse consequences. Secondly, the principle of deliberate or conscious omission is applied mainly when an e....
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.... view to augment the revenue through the mechanism of tax deduction at source. This provision was brought on statute to disallow the claim of even genuine and admissible expenses of the assessee under the head 'Income from Business and Profession' in case the assessee does not deduct TDS on such expenses. The default in deduction of TDS would result in disallowance of expenditure on which such TDS was deductible. In the present case tax was deducted as TDS from the salaries of the employees paid by M/s Mercator Lines Ltd., and the circumstances in which such salaries were paid by M/s Mercator Lines Ltd., for M/s Vector Shipping Services, the assessee were sufficiently explained. It is to be noted that for disallowing expenses from business ....