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2018 (4) TMI 1426 - AT - Income TaxAddition u/s 40(a)(ia) - delay in depositing the tds - assessee had made the payment between the period 01.04.2006 to 28.02.2007 and had also deducted TDS on this amount however the TDS so deducted had been deposited to the Government account on 05.04.2007 - Held that - Amendment in section 40(a)(ia) by Finance Act 2010 would apply retrospectivelyIn view of the above facts and judicial finding we observed that if tax deducted is deposited by assessee before due date of filing return of income same is required to be given credit in very same assessment year. See case of Standard Buildcon 2014 (1) TMI 1488 - GUJARAT HIGH COURT - Decided in favour of the assessee. Disallowance equivalent to 20% of amount paid in cash to the transporters u/s 40A(3) - Held that - We find from the facts on record that the assessee has failed to establish any exceptional or unavoidable circumstances for making payment in cash instead cross cheque. The assessee is not covered by the exception provided under rule 6DD(j) of the act. The assessee has not placed any material which shows that there were any exigencies which warranted payment by non-account payee cheques. - Decided against assessee
Issues:
1. Disallowance under section 40(a)(ia) of the Income Tax Act, 1961. 2. Disallowance under section 40A(3) of the Income Tax Act, 1961. Issue 1: Disallowance under section 40(a)(ia) of the Income Tax Act, 1961: The Revenue's appeal and the Assessee's Cross Objection for A.Y. 2007-08 were based on the order of the CIT(A)-1, Vadodara, concerning disallowance of &8377; 52,70,069/- under section 40(a)(ia) of the Act. The assessing officer observed that the assessee had paid transport charges exceeding &8377; 50,000 to various transporters without deducting tax at source as required under section 194C. The assessing officer disallowed the claim of the assessee under section 40(a)(ai). However, the CIT(A) allowed the appeal of the assessee. The ITAT Ahmedabad analyzed the situation and referred to judgments by the Hon'ble High Court of Gujarat in similar cases. The High Court held that if tax deducted is deposited before the due date of filing the return, it should be credited in the same assessment year. The ITAT found that the issue was covered in favor of the assessee by the High Court's decision. Therefore, the ITAT upheld the CIT(A)'s decision to delete the disallowance under section 40(a)(ia), dismissing the Revenue's appeal on this issue. Issue 2: Disallowance under section 40A(3) of the Income Tax Act, 1961: The assessee raised a ground in cross objection regarding the disallowance of &8377; 2,50,000/- under section 40A(3) of the Act. The assessing officer disallowed 20% of the expenses paid in cash to transporters, as the payment was not made through an account payee cheque. The CIT(A) upheld this disallowance, stating that the assessee failed to provide a valid reason for the cash payments. The ITAT reviewed the arguments and found that the assessee did not establish any exceptional circumstances for making cash payments instead of through a cheque. The ITAT noted that the assessee did not fall under any exceptions provided in Rule 6DD of the IT Rule. As the assessee could not demonstrate any exigencies necessitating cash payments, the ITAT upheld the CIT(A)'s decision to sustain the disallowance under section 40A(3). Consequently, the appeal of the assessee on this issue was dismissed. In conclusion, the ITAT dismissed both the appeal of the Revenue and the cross objection of the assessee.
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