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2019 (9) TMI 1317 - AT - Income TaxPrior period expenditure - cash basis of accounting - Deduction of tax deducted at source from rent, professional fees et cetera and paid to the central government before the due date of the filing of the return of income disallowed - HELD THAT:- According to the income tax act itself the above amount of tax deducted at source is deemed to have been received by the recipient of the income. Thus, it cannot be said that the assessee has not paid the amount of tax deducted at source to the recipient of the income from whose payments the tax have been deducted. Tax deduction at source is a liability cast upon the assessee to deduct the sum from the recipient of such income. In fact the moment assessee deducts the tax at source from the sums paid to the other person it becomes the liability of the assessee who can be held to be an assessee in default for the above sum as well as liable to pay interest and penalty also. The amount of tax deducted at source is always considered as the sum paid by the assessee on behalf of the recipient of the income. Therefore, it cannot be said that the above sum has not been paid by the assessee even while following the cash system of accounting. Further the action of the learned CIT – A in invoking the provisions of section 40 (a) (i) is also devoid of any merit in view of the decision of M/S CALCUTTA EXPORT COMPANY [2018 (5) TMI 356 - SUPREME COURT] where the assessee has paid the above tax deduction at source to the credit of the government within the prescribed time. Accordingly the appeal of the assessee on the solitary issue of the disallowance is allowed.
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