2014 (11) TMI 1086 - HC - Income Tax

TDS liability - difference / short deduction of TDS due to application of wrong provision - Held that - Difference in shortfall was due to the applicability of provisions. The assessee has deducted tax at source u/s. 194C whereas according to the Assessing Officer provisions of section 194I are applicable. No doubt assessee is in default as per provisions of sec. 201 but disallowance of the expenditure is not permissible u/s. 40(a)(ia) - Decided in favour of assessee

Summary

Issues:
Challenge to judgment and order of Income Tax Appellate Tribunal for AY 2007-08 regarding short deduction of tax under section 194J.

Analysis:
The appellant challenged the judgment and order dated 29.4.2014 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench 'D', Ahmedabad for AY 2007-08. The case involved the filing of original and revised income tax returns, selection for scrutiny, issuance of notices under sections 143(2) and 142(1), and subsequent assessment. The appellant appealed to the CIT(A) and then to the ITAT, which dismissed the appeal. The appellant contended that the circular issued by CBDT was clear, and the issue was governed by section 194J. The ITAT observed that there was a short deduction of tax in payments made by the assessee to certain entities. The Tribunal referred to previous decisions and held that the disallowance of certain expenses was not justified. The Tribunal's order deleting the additions was upheld, and the appeal by the Revenue was dismissed as no substantial question of law was found.

In conclusion, the High Court confirmed the Tribunal's decision regarding the short deduction of tax under section 194J. The Court agreed with the Tribunal's findings and held that no substantial question of law was raised in the appeal. Therefore, the appeal was deemed devoid of merit and dismissed.