2012 (9) TMI 1096 - AT - Income Tax

Summary

Issues involved: Appeal against disallowance of carting expenses u/s. 40(a)(ia) r.w.s. 194(c) for assessment year 2005-06.

Summary:
The appeal was filed by the Assessee against the disallowance of carting expenses amounting to &8377; 66,12,078/- u/s. 40(a)(ia) r.w.s. 194(c) for the assessment year 2005-06. The Assessing Officer disallowed the amount as the assessee did not provide any explanation regarding the deduction of TDS. The CIT(A) upheld the disallowance stating that TDS liability arises throughout the year on payments to sub-contractors. The appellant argued that Section 40(a)(ia) applies to amounts payable, not just actual payments, while the CIT(A) held that it applies to both payable and paid amounts. The appellant, a transport contractor, had paid the amount directly to sub-contractors. The CIT(A) calculated that TDS was payable by a specific date and confirmed the addition.

The appellant contended that TDS was paid before the due date for filing the return for A.Y. 05-06, citing relevant case laws. The Tribunal considered the case laws presented and agreed that the facts were similar and applicable to the appellant. As the TDS was deducted and paid before the due date, the appellant's appeal was allowed.

Therefore, the Tribunal allowed the appeal of the assessee against the disallowance of carting expenses u/s. 40(a)(ia) r.w.s. 194(c) for the assessment year 2005-06.