2022 (12) TMI 398

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....grounds of appeal: "1. The learned CIT(A) has erred in upholding the disallowance of Rs.16,55,991/-, in the facts and the circumstances of the case and in law. 2. The learned CITA) ought to have held that alternatively the deduction of Rs.16,55,991/- should be allowed under the proviso to section 40(a)(ia) of the I.T.Act, 1961, during the previous year when the tax was deducted and paid on 25.04.2013, in the facts and the circumstances of the case and in law. 3. The learned CIT(A) has not found that the expenditure, in question, was not allowable, as a deduction, in computing the income, under the head Business", except on the ground of holding that the same cannot be considered, as having accrued on 25.04.2013, b....

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....s "the Act") shall be allowed in the assessment year subject to the proviso u/s. 40(a)(ia) of the Act, as per which, when the assessee has deducted TDS and paid expenditure needs to be allowed. Since, the assessee has deducted TDS on interest to capital account of outgoing partner in the assessment year 2014-15, the same needs to be allowed in this year, even if the assessee is following mercantile system of accounting. 5. The Ld. DR on the other hand supporting the order of the Ld. CIT(A), submitted that there is no dispute that the assessee is following mercantile system of accounting. But, interest pertains to 01.09.2012 to 31.03.2013 has been accrued in the financial year relevant to assessment year 2013-14 and thus, the AO has right....