9911796707
TMI Blog2020 (10) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... indicate existence of such contractual terms and obligations has not been furnished either before the Departmental Authorities or even before us. In the absence of any evidence, no factual finding can be recorded to the effect that the assessee has incurred such expenditure in terms of any contractual obligation. If the assessee through proper evidence can prove that the TDS liability was incurred by it in terms of any contractual obligation, the ratio laid down in case of BOB Cards Ltd. [ 2012 (7) TMI 155 - ITAT, MUMBAI ] would be squarely applicable and the expenditure has to be allowed. However, the existence of a contractual obligation requires factual verification by the AO - we restore the issue to the Assessing Officer for factual ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Brief facts are, the assessee, a resident company, is engaged in the business of manufacturing piston ring, semi finished castings, etc. In course of assessment proceedings, the Assessing Officer noticed that the assessee has debited an amount of ₹ 1,21,834, to the Profit Loss Account towards TDS on export commission. Being of the view that TDS being in the nature of income tax is not allowable as expenditure as per section 40(a)(ii) of the Income Tax Act, 1961 (for short the Act ), disallowed the claim made by the assessee. Being aggrieved with such disallowance, the assessee preferred appeal before learned Commissioner (Appeals), however, learned Commissioner (Appeals) also sustained the disallowance made by the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was required to bear the tax liabilities of the payees. Therefore, the Bench relying upon the decision of the Hon'ble Madras High Court in CIT v/s Standard Polygraph Machine Pvt. Ltd., [2000] 243 ITR 788 (Mad.) has allowed the expenditure since it was incurred to discharge a contractual liability. In the facts of the present case, no material has been brought on record to show that the assessee has to bear the TDS liability on account of the payees as per any contractual agreement. At least, no material evidence to indicate existence of such contractual terms and obligations has not been furnished either before the Departmental Authorities or even before us. Therefore, in the absence of any evidence, no factual finding can be recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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