Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (11) TMI 668 - AT - Income TaxAddition u/s 40a (ia) - non deduction of tds on commission expense - non-crystallization and liability being unascertained entry in the book - Held that:- Section 40a(ia) provides that as and when the assessee makes the payment of relevant TDS, the expenditure will be allowed in the year of payment. Besides, the ld. CIT(A) has given clear findings that the provision was made on whims and fancies of the assessee without any proper basis and even the genuineness of the expenditure; therefore, the ld. CIT(A) has disallowed the expenditure. In this case, the simple question is non-crystallization and liability being unascertained entry in the books at the whims and fancies of the assessee, which cannot be an allowable expenditure and having made book entries claiming the expenditure it was legal obligation of the assessee to deduct the TDS and failure thereof will render the expenditure disallowable in clear terms of Section 40a(ia). The provision of commission payment claim by the assessee is totally unascertainable, uncrystallized and fanciful. It does not assume the character of ascertained mercantile liability. Even in case of mercantile liability, Section 40a(ia) clearly mandates that the expenditure cannot be allowed in the absence of corresponding TDS payment in Government treasury. - Decided against assessee
|