Claim of Deduction u/s 40(a)(ia) of Income Tax Act rejected on ground of Non Deduction of TDS: ITAT Dismisses Appeal of Assessee [Read Order]

The Chennai bench of the Income Tax Appellate Tribunal ( ITAT) dismissed the appeal filed by the assessee for rejecting the claim of deduction under section 40)a)(ia) of the Income Tax Act,1961 on the ground of non deduction of Tax deducted at source (TDS). 

G. Krishnamurthy, the appellant assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confirming the order passed by the assessing office for disallowing the claim of deduction of expenses by invoking the provisions of section 40(a)(ia) of the Income Tax Act, for non-deduction of TDS on various items. 

During the hearing of the appeal, none appeared on behalf of the assessee and D. Hema Bhupal appeared on behalf of the revenue department. 

The counsel for the revenue contended that the assessee before the assessing officer (AO) or before the Commissioner of Income Tax (Appeals)CIT(A) could not submit any of the details or any evidence, apart from a mere statement that those parties had included the alleged receipts in their returns of income(ROI). 

It was also submitted that the assessing officer sustained the addition on account of professional expenditure, interest expenditure, and public expenditure. Thus the claim of deduction under section 40(a)(ia) of the Income Tax Act rejected by the assessing officer was due to the non-deduction of TDS on various items as per the law. 

The Bench observed that the assessee could not file any evidence in support of the claim made that the other parties regarding the interest paid, publicity charges, and professional charges were included by the respective recipients in their returns of income and was unable to accept the claim made by the assessee. 

It was also observed that the assessee had not deducted TDS and also failed to file any evidence regarding his claim that the recipients had declared in their returns of income of the alleged receipts. 

The two-member bench comprises Mahavir Singh(Vice President) and Manjunatha. G(Accountant) held that the claim made by the assessee was not as per the law and is liable to be dismissed. 

To Read the full text of the Order CLICK HERE

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