Wednesday 5 June 2013

No s. 40(a)(ia) disallowance for default of short-deduction of TDS

Apollo Tyres Ltd vs. DCIT (ITAT Cochin)


 The assessee made payments to various contractors. Though tax was deducted at source, it was at a rate lower than that prescribed under the Act. The AO & CIT(A) held that as there was a default by the assessee, the expenditure had to be disallowed u/s 40(a)(ia). On appeal by the assessee to the Tribunal, HELD allowing the appeal:



A combined reading of s. 201(1A) and s. 40(a)(ia) shows that while a case of short-deduction of TDS is covered by s. 201(1A), it is not covered by s. 40(a)(ia). There is an obvious omission to include short deduction / lesser deduction in s. 40(a)(ia). Therefore, in case of short /lesser deduction of tax, the entire expenditure whose genuineness was not doubted by the assessing officer, cannot be disallowed (S.K. Tekriwal (Cal HC) & Chandabhoy and Jassobhoy 49 SOT 448 (Mum) followed)

 

No comments:

Pre-GST taxes cannot be refunded if paid pursuant to an inquiry

  This is to update you about an important decision by Tribunal in the case of Filatex India Limited vs. CCE & ST , E A No. 10231 of ...