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TMI Blog2015 (10) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... has taken a stand that assessee has failed to prove that the expenditure has been incurred wholly and exclusively for the purpose of business. For this purpose, the AO pointed out certain defects, like overwriting on the voucher, handmade voucher, no mention in tripartite agreement with company about the payment of commission to sub-dealer etc. The ld. AO has also applied provisions of section 40(a)(ia) by observing that TDS was made in the month of March only while the credits as per vouchers were to be made earlier to March during the entire financial year. According to Assessing Officer, as the assessee has violated provisions of section 40(a)(ia) and hence the expenditure in question should not be allowed. Aggrieved, the assessee went ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Merlyn Shipping & Transport Vs. ADDL CIT, 136 ITD 23 where it was held that provisions of section 40(a)(ia) can be applied only on the payments due at the end of financial year but not paid. As no payment is due to parties as on 31.03.2009 the disallowance could not have been made. He accordingly deleted the disallowances. 2.3 The ld. DR relied on the order of Assessing Officer. 2.4 On the other hand the ld. AR supported the order of the CIT(A) and submitted that the commission is paid to sub-dealers as per agreed terms and TDS has also been made. This is also as per the practices generally followed in the trade and further as per practices followed over the years. Accordingly, there is no infirmity in the order of CIT(A) where h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncurred wholly and exclusively for the purpose of business especially when the payees are not relatives of assessee. Further, when the credits/payments in the ledger accounts is made in the month of March, 2009 the assessee has righty made TDS in March and deposited it before the due date u/s 139(1) to claim the deduction for the assessment year under consideration. No disallowance can be made u/s 40(a)(ia) in such circumstances. We accordingly uphold the order of CIT(A) on this account. We also observe that even if TDS was liable to be made before March, 2009 and the assessee had deducted it during the year and deposited before the due date of filing return u/s 139 (1), no disallowance could have been made in view of our decision in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of CIT(A). 4.3 We have heard the rival submissions and have carefully perused the relevant material on record. We do not find any reason to disagree with the ld. CIT(A) in the facts and circumstances of the case where the disallowance of actually paid incentive is made merely by pointing out that the payee is accountant. Similar payments to other persons have been considered allowable by the A.O. Further, there cannot be denial of a situation that one employee is performing various roles in an organisation. We are, therefore, in full agreement with the findings given by the CIT(A) and uphold the same. This ground of appeal is accordingly dismissed. 5. Ground no 3 is taken against the deletion of disallowance of work shop maintenance exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The fourth and the last ground of appeal is against deletion of disallowance of PF and ESI of Rs. 33,404/-. 7.1 As per tax audit report the employees contribution to these funds have been made beyond the prescribed time limit under the relevant Act, though the payments were made within the time limit of filing return u/s 139(1). The A.O applied the provisions of section 36(1)(va) of the Act and disallowed the same. The CIT(A) deleted the disallowance finding by holding that the provisions of section 43B of the Act are applicable. 7.2 The ld. D/R relied on the assessment order and submitted that the provisions of section 36(1)(va) of the Act are applicable on employees contribution towards PF & ESI and not section 43B. 7.3 The ld. A.R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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