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2018 (1) TMI 1187 - AT - Income Tax


Issues involved:
1. Disallowance of interest amount
2. Disallowance of freight payment
3. Disregarding previous judgments
4. Applicability of TDS provisions
5. Business activity classification
6. Disallowance of expenses under section 40(a)(ia)

Analysis:

1. Disallowance of interest amount:
The Assessing Officer (AO) disallowed interest payments due to non-deduction of TDS. The appellant argued that section 40(a)(ia) applies only if the amount remains payable at year-end, citing precedents. However, the Commissioner disagreed, citing Gujarat and Calcutta High Court decisions. The appellant's alternative plea regarding section 194A was rejected due to lack of evidence supporting the claim that the company was engaged in insurance business. The disallowance of interest was upheld, and the appeal was dismissed.

2. Disallowance of freight payment:
The AO disallowed freight payments under section 40(a)(ia) for non-deduction of TDS. The appellant argued that the disallowance was based on a typographical error, but the Commissioner found the disallowance valid as tax was deductible and not deducted. The disallowance of freight payment was confirmed, and the appeal was dismissed.

3. Disregarding previous judgments:
The appellant contested the CIT(A)'s decision by citing judgments of Jurisdictional Jaipur ITAT and Special Bench of Visakhapatnam ITAT. However, the Commissioner relied on Gujarat and Calcutta High Court decisions, dismissing the appellant's contentions.

4. Applicability of TDS provisions:
The appellant argued that TDS provisions did not apply to the freight payments made. The Commissioner disagreed, emphasizing the importance of deducting TDS as required by law.

5. Business activity classification:
The appellant claimed that the company receiving payments was engaged in the insurance business, exempting it from TDS provisions. However, the Commissioner found insufficient evidence to support this claim, leading to the rejection of this argument.

6. Disallowance of expenses under section 40(a)(ia):
Both the disallowance of interest amount and freight payment were upheld under section 40(a)(ia) for non-compliance with TDS provisions. The Commissioner found the AO's actions justified and dismissed the appeal due to the lack of representation by the appellant.

In conclusion, the ITAT Jaipur upheld the disallowances made by the AO, citing non-compliance with TDS provisions and dismissing the appeal due to lack of representation by the appellant. The Commissioner's decision was based on legal precedents and the factual and legal positions presented during the proceedings.

 

 

 

 

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