The Income Tax Appellate Tribunal (ITAT) Delhi Bench upheld the addition of disallowance on TDS stating that “the assessee was under statutory obligation to deduct the income tax at the time of credit or/and, payment to the payee”.
However, the ITAT held that Disallowance of Vehicle Depreciation was not right stressing that “the vehicles have been used for business purposes and are business assets of the assessee”.
The Tribunal consisting of N.K. Billaiyasuchitra Kamble, and Suchitra Kamble made this ruling in the case of M/S. Bhardwaj Construction V. ACIT
The Assessee firm was engaged in the business civil contractor and deals in contract line from various years. During scrutiny, the Assessing Officer made various additions including disallowed of Salary and Wages, Telephone Expenses, Interest on TDS, Donation, etc. The aggrieved assessee hence moved to the Tribunal.
While considering the case, the tribunal however considered the Disallowance u/s 40A(3) and finding that the factual part was never questioned by the AO or CIT(A), remanded back the issue to the file of the Assessing Officer. The Tribunal also remanded back the issues of disallowance of travelling and conveyance expenses to the file of the AO.
The Tribunal stressed that “the assessee be given the opportunity of hearing by following principles of natural justice” while reconsidering the matter.
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