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TMI Blog2012 (4) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... the same before the due date of filing the return u/s 139(1) but not before the end of the previous year i.e 31-03-2008. 3. The CIT(A)'s decision that sec.40(a)(ia) is not attracted where the tax has been deducted at source on an expenditure incurred or payment made in the month of the relevant previous year but deposited to the Govt. account on or before the due date of filing of return is not acceptable. 4. The tax deductable during the period other than that of the last month of the year is covered by proviso B of sec.40(a)(ia), according to which the due date for remitting the tax deducted would be the last day of the previous year in order to avoid disallowance u/s 40(a)(ia) of the Act. 2.1 The brief facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossed up and thus, the assessee has borne the TDS and made the provisions for the same in the month of March, 2008 and TDS was remitted before the due date for filing the return of income, and that in the case of Bapu Saheb Nanasaheb Dhumal, wherein the Bombay Bench of ITAT in ITA No.6628/Mum/2009 dated 25-06-2010 for the AY: 2005-06 has given a finding that Sec.40a)(ia) cannot be invoked if the assessee remitted the TDS within the due date of filing of the return prescribed u/s 139(1) of the IT Act. The AO was however, not convinced with the said explanation of the assessee and held that for the purpose of Sec.194C, 194H & 194J, the tax has to be deducted at the time of credit or payment thereof in cash or by issue of cheque or draft or by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sec.139(1) then such sum shall be allowed as deduction. He also considered the decision of the ITAT at Mumbai Bench in the case of Bapu Saheb Nanasaheb Dhumal v. ACIT in ITA No.6628/Mum/2009 dated 25-06-2010 for the AY: 2005-06 and held that the AO is not justified in disallowing the amount of Rs.18,80,085/- debited to the profit & loss account as labour charges. Accordingly, he allowed the assessee's appeal. 3.1 Aggrieved, the revenue is in appeal before us. 4. The learned DR Shri Saravanan, while placing reliance upon the order of the AO drew our attention to the provisions of Sec.40(a)(ia) and also Secs.194C,19H and 194J of the IT Act to demonstrate that tax is to be deducted at the time of payment and not at the end of the year. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to page-11 of paper book wherein the said amount has been debited to Government account on 25-09-2008. The learned counsel for the assessee also drew our attention to the decision of the various Benches of the Tribunal which are filed in the paper book and also decision of the Hon'ble Calcutta High Court in the case of CIT v. M/s Virgin Creations in support of his contentions. 6. Having heard both the parties and having considered the rival contentions, we find that by virtue of Sec.194C of the IT Act..., "Any person responsible for paying any sum to any resident for carrying out any work in pursuance of a contract between the contractor and a specified person, shall at the time of credit of such sum to the account of the contractor or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents made to contractors only or can be make a provision for the same from his own income. According to learned counsel for the assessee, Sec.195A allows the assessee to make such a provision. For the purpose of clarity the provision of Sec.195A is re-produced here under; "Sec.195A where under an agreement or other arrangement, the tax chargeable on any income referred to in the foregoing provisions of this Chapter is to be borne by the person by whom the income is payable, then for the purposes of deduction of tax under those provisions such income shall be increased to such amount as would, after deduction of tax thereon at the rates in force for the financial year in which such income is payable, be equal to the net amount payable under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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