TaxTMI 
TaxTMI 
2022 (8) TMI 1036
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....3) of the Income Tax Act, 1961 passed by ACIT, Circle 63(1), New Delhi (hereinafter referred to as the Assessing Officer 'AO'). 2. The assessee is a firm Legal Professionals. Return of income was filed declaring income of Rs. 23,01,41,110/- and the case was selected under compulsory Manual Scrutiny. Apart from disallowance of Rs. 69,76,701/- shown in the balance sheet as statutory liability on account of TDS payable certain other additions by way of disallowances of expenditure were made by Ld. AO and in appeal the Ld. CIT(A) has sustained the disallowance Rs. 69,76,701/-, which has been challenged before this Tribunal by raising following grounds of appeal :- "1. That the Authorities below erred in making an addition of Rs. 69,76,701/- ....
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....aw, accordingly are taken up together for determination. In regard to these grounds, it can be observed that the Ld. Tax Authorities below have not discussed as to what were the payments which were made giving rise to TDS. It appears that Ld. AO was carried by the fact that the assessee is following cash system of accounting, therefore, the TDS being one part of expenses debited in P&L Account therefore, to the extent of TDS the expenses being not actually incurred and paid in the relevant financial year, have to be disallowed. 6. The Bench is of considered opinion that such an opinion of Tax Authorities below is not sustainable because the assessee has shown the expenditure as a whole in his accounts having been paid. What remains in the ....
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....g the year and, therefore, is it allowable to the assessee as business expenditure. We note that according to the provisions of section 198 of the Income Tax Act, 1961 (hereinafter called 'the Act'), tax deducted in accordance with the provisions of the Act is deemed to be the income received by the recipient of the income. Therefore, according to the Act itself the amount of TDS is deemed to have been received by the recipient of the income. Therefore, in our considered opinion, it cannot not be said that the assessee had not paid the amount of tax deducted at source to the recipient of the income from whose payments the tax had been deducted. TDS is a liability cast upon the assessee to deduct the sum from the recipient of such income. Th....