TMI Blog2014 (1) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the due date for filing return of income under section 139(1) of the Act. The decision in ITO vs. Shri Nem Chand Jain followed - The assessee deducted TDS which was not paid to the account of Central Govt. within the prescribed time, however, it was paid before the due date of filing the return specified in Section 139(1) of the Act - amendments in Section 40(a)(ia) is having retrospective operation – the addition u/s 40(a)(ia) of the Act cannot be made if the payment of tax deducted at source has been before the due date of filing the return of income for the year under consideration - payment of TDS has been made before the due date of filing of the return u/s 139(1) of the Act – thus, the CIT(A) was fully justified in deleting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 139; or b. in any other case, on or before the last day of the previous year. In view of above provisions, you were required to deposit the amount of TDS deducted/deductible on amount of Rs. 2,42,50,582/- on account of truck hire expenses paid/credited before 1st day of last month by last day of the previous year. On perusal of TDS details, it is noticed that you failed to deposit the TDS deducted/deductible on the above expenditure during the previous year itself. Therefore, you are requested to explain why the above expenditure amounting to Rs. 2,42,50,582/- on account of truck hire expenses may not be disallowed under section 40(a)(ia) of the IT Act. In view of above since the payment of Rs. 2,42,50,582/- were made before 1st of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance of deduction under section 40(a)(ia), then Section 40(a)(ia) will be rendered meaningless, absurd and otiose. Since the assessee had (belatedly) deducted tax in the last month of the previous year i.e March, 2005 and deposited the same before the due date of filing the return u/s 139(1), deduction had to be allowed u/s 40(a)(ia)(A). Kindly refer Bapusaheb Nanasaheb Dhumal vs. ACIT (ITAT Mumbai). 4. The assessee also submitted that the provisions of Section 40(a)(ia) of the Act were not applicable to the expenditure paid and it was applicable only if expenditure was payable and that the payment of tax by deductee discharges the deductor from his liability. It was further stated that the assessee deducted the tax on 31st March, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indra traders Vs. ITO, ITAT (Delhi)(C) Bench (2010) 132 TTJ (Del) 701. 7. The Ld. CIT(A) after considering the submissions of the assessee, deleted the addition made by the A.O. by observing in para 2.3 of the impugned order as under:- "I have considered the submission of the appellant as well as the assessment order. It is seen that the appellant has deducted the tax at source amounting to Rs. 2,75,604/- out of the payments of Rs. 2,42,50,582/-made to Transporters up to February, 2008. The same was deposited on 07/04/2008 i.e. before the due date of filing the return under section 139(1). However, the A.O. has disallowed the expenses holding that tax amount was not deposited at end of previous year i.e. before 31/3/2008 for payments ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source on or before the due date for filing return of income under section 139(1) of the Act and therefore, the impugned disallowance deserves to be deleted. We order accordingly and allow the appeal by the assessee." In view of above decisions, it is apparent that deduction on account of expenditure for which TDS amount of Rs.2,75,604/- has been deposited before filing the return is allowable and not disallowable under section 40(a)(ia) of the Act. Even otherwise also, the disallowance made by the A.O. under section 40(a)(ia) is not sustainable except Rs. 52,990/- remaining payable in view of the latest decision of the Hon'ble ITAT, special bench, Visakhapatnam in the case of Merilyn Shipping Transport Vs. Addl. CIT Range-1, Viskhap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that an identical issue having similar fact has already been adjudicated by this Bench of the Tribunal vide order dated 01/10/2012 in the aforesaid referred to case of ITO vs. Shri Nem Chand Jain wherein relevant findings have been given in para 2.7, which reads as under:- "After considering the submissions of both the parties and the material available on record, we are of the view that this matter is squarely covered by the decision of ITAT Bangalore bench (wherein one of us- Accountant Member is author)in the case of ACIT Vs. M.K. Gurumurthy (2012) 32 CCH 49 (Bang.) ((Supra)) wherein it has been held as under:- "In the present case, it is not is dispute that the assessee deducted TDS which was not paid to the account of Central Govt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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