TaxTMI 
TaxTMI 
2023 (6) TMI 879
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....llowing grounds of appeal:- "i. The Ld. CIT(A) has erred in law and on facts in deleting disallowance of Rs. 69,89,644/- u/s 40(a)(ia) of the IT Act for short deduction of TDS. ii. The appellant craves leave to add, alter and /or to amend all or any of the ground before the final hearing of the appeal." 3. The brief facts of the case are that during the course of assessment, the Assessing Officer noted that assessee had credited payment of Rs. 7,10,25,399/- to the Profit and Loss Account on account of payment to subcontractors. The Assessing Officer noted that though the assessee had deducted TDS on payment made to sub-contractors u/s. 194C of the Act, the assessee while making payments exceeding Rs. 10 lakhs at the tim....
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....nce u/s 40(a)(ia) of the Act is to be made on short deduction of TDS. I am inclined to agree with the appellant that judgment of hon'ble High Court of Calcutta in CIT, Kolkata XI M/s. S.K. Tekriwal (Supra) is applicable to the present case. Hon'ble High Court in CIT, Kolkata vs M/s. Tekriwal (2014) 46 taxmann.com (Calcutta) has held as follows:- "We are of the view that the provisions of section 40(a)( ia) of the Act has two limbs, one is where, inter alia, assessee has to deduct tax and the second where after deducting tax, inter alia, the assessee has to pay into Government Account. There is nothing in the said section to treat, inter alia, the assessee as defaulter where there is a shortfall in deduction. With regard to ....
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....er alia, assessee has to deduct tax and the second where after deducting tax, inter alia, the assessee has to pay into Government Account. There is nothing in the said section to treat, inter alia, the assessee as defaulter where there is a shortfall in deduction. With regard to the shortfall, it cannot be assumed that there is a default as the deduction is not as required by or under the Act, but the facts is that this expression, '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'. This section 40(a)(ia) of the Act refers only to the duty to deduct tax and pay to government account.....
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....y, the addition of Rs. 69,98,644/- is hereby deleted. This ground of appeal is allowed." 5. The Department is in appeal before us against the order passed by ld. CIT(A) deleting the disallowance of Rs. 69,89,644/- u/s. 40(a)(ia) of the Act for short deduction of TDS. Before us, the ld. Departmental Representative placed reliance on the observations made by the Assessing Officer in the assessment order. In response, the ld. counsel for the assessee submitted that this issue is now more or less settled in favour of the assessee in view of the various decisions rendered by various Courts and Tribunals including the decision rendered by the Jurisdictional Ahmedabad ITAT. 6. We have heard the rival contentions and perused the material on r....