2010 (6) TMI 796 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of addition on account of TDS not deducted on transport expenses and error in auditable accounts.

Issue 1: Addition of TDS not deducted on transport expenses

The appeal was filed by the revenue against the deletion of an addition of Rs. 88,35,698/- made on account of TDS not deducted on transport expenses. The assessee, engaged in the business of tempo plying, claimed transport expenses in the Profit & Loss account. The Assessing Officer disallowed the expenses as no TDS was deducted on them. However, the Commissioner of Income Tax(Appeals) found that in the preceding year, the assessee was not liable to deduct TDS as per section 44AB. Therefore, the deletion of the addition was upheld as the assessee was not required to deduct TDS from the transport payments made. The appeal of the revenue was dismissed, confirming the decision of the Commissioner.

Issue 2: Error in auditable accounts

Another ground of appeal was the error in auditable accounts due to a clerical mistake by the accountant. The assessee claimed that the turnover and expenses were projected higher due to the mistake, and filed the return on presumptive taxation basis under section 44AE. The Commissioner considered the submission and found that the turnover figure was erroneous, given the volume of business. As the turnover was below Rs. 30,00,000/-, the provisions of section 194C read with section 40a(ia) were not applicable. The error in the accounts was attributed to the accountant, and the addition made by the Assessing Officer was deleted. The appeal of the revenue was dismissed, upholding the decision of the Commissioner.