The Income Tax Appellate Tribunal (ITAT), has recently, in an appeal filed before it, upheld disallowance on account of non- submission of proof of TDS deducted while claiming freight and carriage charges.
The aforesaid holding was made by the Tribunal when an appeal was preferred before it by the assesse, as against the order of ld. CIT(A)-1 Patna dated 30.08. 2018.
The grounds of the assessee’s appeal being that the CIT(A) erred in upholding the disallowance u/s 40(a)(ia) amounting to Rs.25,74,023/- being the expenditure incurred on freight and Cartridge, and further that the CIT(A) erred in relying on the judicial precedents while affirming the disallowance without confronting the appellant with the decisions relied upon, the Tribunal observed as follows:
“we have noticed that the main grievance of the assessee is disallowance u/s 40(a)(ia), amounting to Rs. 25,74,023/- being the expenditure incurred in respect of freight and carriage. On this specific issue from the perusal of assessment order passed by the AO and it has come to our notice that he had categorically observed that assessee did not furnish the name and address of the party to whom payments were made on account of freight and carriage, besides that assessee did not furnish the details of TDS before the AO also”.
“Therefore, the ld. AO viewed that it was a clear violation of section 194C/40(a)(ia) of the Income Tax Act. Similarly, view was taken by the ld. CIT(A) while deciding this issue and finds that assessee has not be able to furnish any details/documents in support of payment under the head of freight and carriage expenses and no TDS was deducted on such payment. Further he observed that assessee has failed to furnish certificate of Chartered Accountant as required by section proviso to section 40(A)(ia) of the Income Tax Act and assessee has violated the provision of section 194C/40(a)(ia) of the Income Tax Act and he disallowed the payments made on account of freight and carriage by virtue of section 40(a)(ia) of the Income Tax Act.”, the Bench added.
Thus, dismissing the assessee’s appeal it commented:
“While considering the above issues on board before us, no new material was placed before us to prove the fact contrary, and from the impugned order passed by the ld. CIT(A), it is crystal clear that the payment made on account of freight and carriage by the assessee is in violation of section 40(a)(ia) of the Income Tax Act and that the assessee has not been able to furnish any details/documents in respect of such payments made under the head of freight and carriage expenses. Therefore, we do not want to interfere in the order passed by the authorities below, and the ground raised by the assessee are accordingly dismissed”.
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