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Issues involved: Disallowance u/s.40(a)(ia) of the Income-tax Act and addition of income in A.Y. 2008-09.
Disallowance u/s.40(a)(ia): The appellant, engaged in manufacturing and sale of automotive parts, rented premises from its sister company and entered into a leave and license agreement. Tax was deducted in March 2008 and deposited before the due date. The ITAT Mumbai's decision in a similar case was cited, emphasizing that if tax is deducted in the last month of the previous year and paid before the due date for filing returns, it should be allowed as a deduction. The tribunal held that the conditions for deductibility are prescribed under section 40(a)(ia) itself, and the provisions of Chapter XVII are relevant only for ascertaining the deductibility of tax at source. As the assessee complied with the main provisions of the law, the claim for deduction was allowed, and the appeal was decided in favor of the assessee. Addition of income in A.Y. 2008-09: The Assessing Officer added an amount related to extra freight and packing charges as income for A.Y. 2008-09, which the assessee claimed pertained to F.Y. 2007-08 and was compensated by Tata Motors. The ITAT Pune accepted the assessee's contention that the income accrued in A.Y. 2009-10, when negotiations with Tata Motors were finalized. Citing the case of E.D. Sasson, which defines the terms 'accrue' and 'arise,' the tribunal concluded that the income was rightly offered to tax in A.Y. 2009-10. The order of the Ld. CIT(A) deleting the addition was confirmed, and the revenue's appeal was dismissed. Judgment: The ITAT Pune upheld the decision of the Ld. CIT(A) in both issues, confirming the allowance of deduction u/s.40(a)(ia) and the deletion of the addition of income in A.Y. 2008-09. The appeal by the revenue was dismissed on 30-05-2013.
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