The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that no disallowance was made under section 40(a)(ia) of the Income Tax Act,1961 for short deductions of tax by the assessee.
Shiv Build India, the respondent-assessee filed a return of income and the assessing officer made disallowance. Later the Commissioner of Income Tax (Appeals) deleted the disallowance made by the assessing officer.
The revenue appealed against the order passed by Commissioner for deleting the disallowance made by the assessing officer.
Tushar Hemani and Parimalsinh B. Parmar, the counsels for the assessee contended that no disallowance was made under section 40(a)(ia) of the Income Tax Act on short deduction of Tax Deducted at Source.
It was further submitted that the assessee did not deduct surcharge on TDS deducted on payments as provided in section 194C of the Income Tax Act. Thus it was a case of short deduction of tax.
Bholaram Devashi, the counsel for the revenue contended that decision made by the assessing officer was as per the law and liable to be sustained.
The bench observed that the assessing officer made disallowance under section 40(a)(ia) of the Income Tax Act on the ground that the assessee company had made short deductions of tax and thus was in violation of section 197(1) of the Income Tax Act.
The two-member bench comprising Annapurna Gupta (Accountant) and Siddhartha Nautiyal (Judicial) upheld the decision of the Commissioner while dismissing the appeal filed by the revenue.
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