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2018 (9) TMI 706 - AT - Income TaxRevision u/s 263 - non deduction of TDS on the borrowings u/s 194A - Held that:- As seen from the assessment order, the AO has examined the issue with regard to the TDS on the borrowings and observed that the assessee has not deducted the TDS on a sum of ₹ 58, 350/- and the same was added back to the income u/s 40(a)(ia). As per the details submitted by AR during the hearing, the total amount of interest paid was ₹ 9, 02, 287/- out of which for the sum of ₹ 7, 18, 508/- the provisions of section 194A are applicable and the assessee had M/s Ardee Hi-Tech Private Ltd., Visakhapatnam deducted the TDS on the payment of ₹ 6,60,159/- and the remaining amount of ₹ 58, 350/- was disallowed by the AO in the assessment proceedings. There is no error in the assessment order which is prejudicial to the interest of the revenue. Revision u/s 263 - addition of unpaid service tax - Held that:- The assessee has debited a sum of ₹ 9, 14, 594/- under service tax and a sum of ₹ 1, 15, 694/- remained unpaid at the end of the year which required to be disallowed under section 43B. There was no dispute that the said amount attracts disallowance u/s 43B of the Act and the issue was not verified by the AO. The contention of the Ld. AR that the disallowance of a sum of ₹ 1, 15, 694/- results into reducing the loss and finally does not result in positive income and the same is not prejudicial to the interest of the revenue is not acceptable and has potential tax effect to the extent of income under assessed. Therefore, not making the addition of unpaid service tax is erroneous as well as prejudicial to the interest of the revenue, and hence, we uphold the order of the Ld. Pr. CIT on this issue and dismiss the appeal of the assessee.
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