TaxTMI 
TaxTMI 
2014 (1) TMI 1885
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....of the case and in law, the Ld CIT (A) erred in directing the disallowance u/s 40(a)(ia) cannot be made for expenses on which tax has been deducted even at an improper rate, ignoring the fact that tax at the prescribed rates was not deducted and AO had correctly disallowed the expenses. 2. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in holding that when the assessee has made deduction of tax at source, no disallowance u/s 40(a)(ia) can be made, thereby overlooking a crucial provisions of statute which states "such tax has not been deducted or after deduction has not been paid" which clearly relates to the tax deductible at the specified rates and therefore, failed to appreciate that the disall....
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....he order of the AO. 6. On the other hand, Shri B.L. Kabra, Ld Counsel for the assessee heavily relied on the order of the CIT (A) as well as the order of the Tribunal in the case of Cinetek Telefilms P. Ltd vs. ACIT vide ITA No.7834 & 7645/M/2010 dated 7.6.2013. 7. We have heard both the parties and perused the orders of the Revenue Authorities as well as the order of the Tribunal dated 7.6.2013 (supra) and other relevant citations mentioned by the ld Counsel for the assessee. On perusal of the order of the CIT (A) in general, para 4.3 to 4.3.vi, in particular, we find that the said paras are relevant and the same are reproduced here under: "I have considered facts of the case. The appellant had claimed expenses aggregating t....
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....work), on which tax is deductible at source under Chapter XVII B and such tax has not been deducted or after deduction has not been paid on or before the due date specified in sub section (1) of section 139. Provided.............." In view of the above provisions, disallowance u/s 40(a)(ia) can be made only in the case when TDS has not been made or after deduction the TDS amount has not been paid on or before the due dates. 4.3.iv. It is held by Hon‟ble ITAT, Mumbai Bench "C‟ in the case of DCIT vs. Chandabhoy & Jassobhoy [2012] 17 Taxmann.com 158 / 49 SOT 448 that provisions of section 40(a)(ia) can be invoked only in event of non-deduction of tax source but not for lesser deduction of tax. In this ca....
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....nts. It is also not the case that the assessee has not deducted any amount. The assessee has indeed deducted tax under section 192 and so the provisions of section 40(a)(ia) also do not apply, the said provision can be invoked only in the event of non-deduction of tax source but not for lesser deduction of tax. Accordingly, the order of the CIT (A) deserved to be confirmed. [para 3]". 4.3.v. In the case of DCIT vs. S.K. Tekriwal [2011] 15 Taxmann.com 289, it was held by the Hon‟ble Kolkata Tribunal that no disallowance can be made u/s 40(a)(ia) of the Act in the event of short deduction of TDS. 4.3.vi. In view of the above and respectfully following the decision of the ITAT, it is held that the appellant has made ded....
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....up Pvt Lfd 123,596.00 2,801.00 AAACL6138R Redington (India) Ltd. 14,325,277.63 AABCR0347P 324,977.00 RT Outsourcing Services Limited Select Technologies 308,990.00 AABCR77538 7,002.00 787,866.27 17,853.00 AAACW3103F Tech Pacific (India) Ltd 1,054,707.19 AABCT1296R 23.901.00 Transition Systems Pvt. Ltd AACCT0788P 120,480.65 2,730.00 Wep Solutions India Limited TOTAL (A) 2,789,039.56 63,199.00 30,792,453.13 AAACW7400P 698,146.00 B. For supply of labour and support: Party's Name Amount Tax Deducted U/S 194 C PAN No. Allied Computers International (Asia) Ltd. AADCA4412E 2,221,050.75 50,329.00 Astrolab Computers ....