No Disallowance Beneath Part 40a ia Of The Earnings Tax Act

Just lately the Hon’ble Court docket has held in an attraction filed earlier than it being IT APPEAL NO. 2303 (DELHI) of 2011 between UE Commerce Corpn. (India) Ltd v. Deputy Commissioner of Earnings-tax for the evaluation yr 2007-2008 filed earlier than the ITAT Delhi Bench ‘H’ that no disallowance underneath part 40(a)(ia) of the Earnings Tax Act for any shortfall in deduction of TDS as a result of distinction of any opinion. It was an attraction in opposition to the Order of the discovered Commissioner of Earnings Tax (Appeals) CIT (A). The judgment was given after listening to each the events and going by way of the supplies out there on the file in addition to after going by way of the Tax Audit Report annexed with the stated attraction. The small print of funds on which tax has not been deducted had been additionally given within the memorandum of attraction. The overall quantity of expenditure was discovered to be Rs. 7, 32,827/- and there’s a shortfall as a result of lesser deduction than required to be deducted. The overall quantity of bills quantity to Rs. 20, 24,455/- on which shortfall of tax at Rs. 3, 26,011/- has been calculated by the tax auditors. It was noticed that no tax was deducted in any respect. It was additional noticed that the place tax was deducted at supply however not paid to the credit score of Central Authorities amounting to Rs. 20,16,778/-. Within the prompt attraction the discovered Advocate on Document of the assessee claimed the advantage of two judgments, one by the Kolkata Bench and different by the Mumbai Bench of ITAT. After going by way of all concerns the Hon’ble Court docket got here to the choice that little doubt the assessee is in default as per provisions of sec. 201 however disallowance of the expenditure will not be permissible u/s 40(a) (ia). It was held that disallowance of Rs. 20, 24,455/- was not justified even after taking into account all of the data out there and all of the precedents. Therefore the Assessing Officer has been directed to delete the addition. The discovered Advocate on Document of the assessee argued on the grounds that the Order of the discovered Commissioner of Earnings Tax (Appeals) CIT (A) is unhealthy in regulation and the discovered Commissioner has erred in confirming the disallowance of expense of Rs. 2,024,455/- u/s 40(ia) of the Earnings Tax Act and prayed that the proportionate allowance of expenditure needs to be directed to be allowed. However nonetheless after listening to each the perimeters lastly the attraction filed by the assessee was not allowed.

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