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2011 (3) TMI 1135 - AT - Income TaxDisallowance of advertisement expenditure - AO noticed that the assessee has not deducted any TDS on the payment of advertisement expenses u/s. 194C - reopening of assessment - assessee replied that no TDS has been deducted and the payment is made for advertisement expenses as per provisions of law and these payments are genuine payments - Held that:- Assessee is under no obligation to deduct TDS on the expenditure of advertisement, as the assessee being an individual, and the claim of the assessee is as per provisions of law. Once the assessee is not liable to deduct TDS under the provision of Section 194C(1), the provisions of Section 40a(ia) for making disallowance of expenditure for non-deduction of TDS will not apply. It is not the case of the revenue that the expenses are bogus or unreasonable or excessive but the disallowance is made merely for non-deduction of TDS - revenue's appeal dismissed Disallowance of expenditure of commission and brokerage by invoking provisions of Section 194H read with Section 40a(ia) of the Act - assessee explained that she has filed confirmation and certificate of statement of commission paid and according to her, commission paid is genuine and no disallowance should be made - Held that:- Assessee is subject to TDS in view of provisions of Section 194H, and once it is an admitted position that assessee has not deducted TDS on the above brokerage and commission payments, AO has rightly disallowed the expenditure, revenue's appeal is allowed. Over statement of purchases filed before the VAT Authority - Held that:- A.O. has considered only difference between Rs.37,28,213/- being raw material purchases and Rs.35,23,192/- being raw material and packing material purchases. The A.O. has not taken into consideration the packing material and central purchases on which no input tax credit is allowed. Thus the A.O's action in adding the difference is not factually correct, purchases in VAT return considered of Rs.37,28,213/- for raw material and Rs.2,82,422/- for packing material i.e. the total purchases accounted by the assessee in its account, only difference is that outside purchases are not recorded in the VAT return submitted with West Bengal VAT Authority, revenue's appeal dismissed
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