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TMI Blog2011 (6) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee also agitates the issue on confirming and arbitrary disallowance of 10% of the salary claimed as expenses without any basis. 2. The brief facts of the case are that the assessee is an individual filed its return of income declaring income of ₹ 8,71,886. The assessee is a Proprietor of "Asiatic Agencies" and conducted the business of direct sourcing/selling agency of Megma Leasing Ltd., ICICI Home Finance Ltd., and some other concerns for marketing and sourcing loan products and postpaid cellular connections. During the course of assessment proceedings, the Assessing Officer noted that the assessee had claimed a sum of ₹ 12,15,166 towards payment of commission which he sought to verify under the provisions of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils of the amounts paid to the employees indicating their address etc., which was also sought for by the Assessing Officer under the provisions of Section 133(6). As a good number of notices came back to the Assessing Officer unserved , the Assessing Officer deemed it proper to disallow a sum of ₹ 3,20,232 (10%) as untenable. Aggrieved the assessee appealed before the first appellate authority on all these additions and disallowances when the learned CIT(A) on the basis of the submissions of the assessee appellant before him and on the basis of decisions cited by the assessee found that the Assessing Officer was within his jurisdiction to invoke the provisions of Section 40(a)(ia) in terms of the "paid" and "payable" envisaged therein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration as provided in the said Section for considering disallowance irrespective of the provisions of Chapter XVIIB. In that decision, the Tribunal has held that the stand taken by the assessee that the TDS as mentioned in Section 40(a)(ia) is only an amount remaining "payable" but not amount "paid" already is correct. The disallowance therefore could not be made for want of deduction of tax at source under the deeming provisions of Section 40(a)(ia). He prayed that the disallowance u/s.40(a)(ia) therefore is liable to be allowed insofar as the tax was still to be "payable" and was to be allowed as and when paid. On the issue of disallowance of ₹ 1,12,294 being the difference between the gross receipts as per TDS Certificates and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant by holding that the assessee was at liberty to deduct tax at source from these expenses claimed whether paid or payable to indicate the tax has been deducted and paid to the Government exchequer till the date of filing of the return u/s.139(1). It is immaterial as long as the expenses have been claimed in the P & L account whether paid or remain payable insofar as the provisions of Chapter XVIIB are a procedure in itself which may be initiated on the happening of non deduction of tax at source, deduction of tax at source but not paid to the government, and non-deduction of tax but claiming expenses as envisaged in Sections 194H, 194J, 104C etc. The case laws cited by the learned Counsel for the assessee therefore clearly indicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclined to uphold the order of the learned CIT(A) insofar as the expenses are only to be claimed either paid or payable and leave no distinction for TDS to be deducted which could be deducted till the date of filing of the return after the close of the year which expenses will be allowed in the impugned Assessment Year only. Obviously the intention of the legislature was to allow the expenditure as and when the tax at source on the said sum has been deducted and deposited with the Government Treasury for allowance of the said expenditure has been further clarified in the proviso to the said Section 40(a)(ia). The case laws cited by the learned Counsel for the assessee therefore rather leans in favour of the Revenue to the extent that a disa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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