2019 (9) TMI 1317

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....i has erred in sustaining disallowance of Rs. 2,49,381/- representing the amount of tax deducted at source in March, 2013 from expenditure towards rent, professional fess etc. despite the fact that the tax was paid to the Central Government before the due date for filing the return of income for the assessment year 2013-14 as required under section 43(l)(ia) of the Income-tax Act, 1961. 1.1 That the learned Commissioner of Income-tax (Appeals)-20, New Delhi has erred in confirming the aforesaid disallowance on the ground that section 145(1) of the Income-tax Act, 1961 prevails over section 40(a)(ia) of the said Act. 1.2 That the learned Commissioner of Income-tax (Appeals)-20, New Delhi has erred in rejecting the alternati....

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....deduction at source payable. It was noted that this is payable as a part of the expenses which the assessee has claimed as allowable expenditure in his profit and loss account. As the assessee is following cash system of accounting, whereby only payments which have been made during the year can be claimed as deductible expenditure, therefore, the learned assessing officer was of the view that above tax deduction at source, which has not been paid by the assessee, out of the various expenditure cannot be allowed as a deduction of expenses. Thus he disallowed the above sum of INR 2 49381/-. He also rejected the contention of the assessee that in earlier years the assessing officer has allowed the deduction in respect of tax deducted at source....

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....n time by the assessee. He further submitted that tax deduction at source is the liability of the assessee and the recipient of the income has been discharged. He therefore submitted that the above disallowance made by the lower authorities deserves to be deleted. 6. The learned departmental representative reiterated the findings of the lower authorities and stated that as assessee is following the cash system of accounting, the above tax deduction at source has not been paid to the credit of the government, therefore it has correctly disallowed by the lower authorities. 7. We have carefully considered the rival contention and perused the orders of the lower authorities. Admittedly, the assessee is following the cash method of account....