TaxTMI 
TaxTMI 
2016 (5) TMI 533
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....eals) - 4, grossly erred in confirming the additions amounting to Rs. 6,00,000/-, being adhoc provision for commission and brokerage made during the year under appeal, for nondeduction of TDS, under the provisions of section 40(a)(ia). 1.1 The Hon CIT(A) failed to appreciate the fact that the provisions of section 194H do not apply to adhoc provisions made in the financials as the amounts have not been credited to any person. Accordingly, the Appellants have rightfully not deducted TDS and the provisions of section 40(a)(ia) are not applicable. 1.2 The Appellants submit that the addition of Rs. 6,00,000/- are purely adhoc, against settled principles of law and is liable to be set aside. 2. The Hon CIT(A) grossly e....
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....e us on the grounds mentioned herein above. 4. At the very outset, the ld. AR representing the assessee submitted that he do not want to pressed ground no. 1, (1.1 & 1.2) and therefore the said ground is dismissed as not pressed. Ground No. 2 4.1 The ld. AR representing the assessee submitted that the assessee/appellant company engaged in the business of manufacturing of surgical dressing and the assessee had made certain payments on account of commission and brokerage for which the assessee has short deduction of tax and accordingly short deduction of TDS which was deducted and was consequently deposited with the Government. The details of these deductions have already been submitted by the assessee with the AO. 3.2 However, th....
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....3.4 On the other hand, ld. DR relied upon the orders passed by the Revenue Authorities. 4. We have heard the counsels for both the parties and we have also perused the material on record as well as the orders passed by the revenue authorities. Before we decide the merits of the case it is necessary to evaluate the orders of the CIT(A) wherein the said ground was dealt with by the CIT(A) and the same is reproduced as under: "6. The facts of the case are that in certain payments on account of commission and brokerage, assessee has short deducted tax and accordingly short TDS deposited, therefore, the A.O. has disallowed the corresponding amount of commission and brokerage, whereas, assessee has claimed that the section clearly spe....
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....ature of payment falling under various TDS provisions, then the provisions of section 40(a) (ia) of the Act are not attracted no disallowance can be made u/s 40(a) (ia). In this respect we rely upon the judgements of the Hon'ble High Court of Calcutta in the case of "CIT vs. S.K. Tekriwal" [2014] 46 taxmann.com 444 (Calcutta) wherein it was held that: " Section 40(a)(ia) of the Income-tax Act, 1961- Business disallowance - Interest etc., paid to resident without deduction of tax at source- if there is any shortfall due to any difference of opinion as to taxability of any item or nature of payments falling under various TDS provisions, assessee can be declared to be an assessee in default under section 201, but no disallowance can b....