2015 (11) TMI 265 - AT - Income Tax

Non deduction of TDS - expenses claimed by the assessee on storage and parking charges - case of the assessee is that it has already paid all the amounts and no amount is pending - Held that - Once already amounts are paid, the Special Bench decision of the Tribunal in the case of Myerlin Shipping and Transports v. Addl.CIT (2012 (4) TMI 290 - ITAT VISAKHAPATNAM ) squarely applies to the case. Also see CIT v. Vector Shipping Services P. Ltd. 2013 (7) TMI 622 - ALLAHABAD HIGH COURT There is nothing on record that the assessee has already paid the amount. We, therefore, direct the Assessing Officer to examine whether payments were made or not and after examining and if found that the payments were already made, the Assessing Officer is directed to allow the claim of the assessee. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Assessment of storage and parking charges without TDS deduction under section 40(a)(ia) of the Income Tax Act.

Analysis:
The appeal involved a firm engaged in the business of clearing, forwarding, and transport claiming storage and parking charges in its profit and loss account. The Assessing Officer disallowed the expenses due to the failure of the assessee to deduct TDS, invoking section 40(a)(ia) of the Act. The ld. CIT(A) upheld the decision. The assessee contended that the issue was covered by a Special Bench decision in a similar case. The Department argued that it was the assessee's duty to deduct TDS. The Tribunal noted that the assessee had already paid the amounts in full, referencing a decision by the Hon'ble Allahabad High Court in favor of the assessee. The Tribunal directed the Assessing Officer to verify the payments and allow the claim if payments were indeed made. The appeal was allowed for statistical purposes.

This judgment highlights the importance of complying with TDS requirements under the Income Tax Act when claiming expenses. It also emphasizes the need for proper documentation and verification of payments to support expense claims. The reference to previous judicial decisions adds weight to the Tribunal's ruling, emphasizing the legal precedent in similar cases. The Tribunal's direction for the Assessing Officer to verify payments underscores the significance of proper record-keeping and documentation in tax matters. Ultimately, the decision serves as a reminder for taxpayers to fulfill their TDS obligations and maintain accurate financial records to support their claims.