Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 1039 - ITAT VISAKHAPATNAMAdditions u/s 40a(ia) - TDS on rent u/s 194I - Failure to deposit TDS before the due date for filing the return of income. - The said TDS was deducted on rental payment and paid to Government account on 05.10.2009 after the due date for filing the ITR - the assessee canvassed the argument of using infrastructure facilities, discussed in the assessment order and argued that there is no case for application of provisions of TDS and the disallowance of expenditure u/s 40(a)(ia) of the Act are uncalled for. Held that:- Since the assessee is using the land and building as well as the other furniture and fixtures available to the company, the Ld.AR contended that it is using infrastructure facilities. However, fact remains that the company, VEIL has given its premises along with the furniture and machinery, fittings etc as available in the Balance Sheet to the assessee for it’s use and receiving rent monthly/or yearly from the assessee. In the books of accounts of payee, the receipt was accounted for under the head ‘ rent account’. - Since the assessee is making the payment of composite rent for the purpose of use of the land and buildings and other equipment, the payment made to the company is squarely covered by the definition of 194I for the purpose of rent. Having deducted the TDS, but not remitted to the Government account before the due date of filing the return of income, the provisions of section 40(a)(ia) attracts. There is no dispute that the assessee has deducted the tax and the payee did not dispute the deduction of tax. Thus, the payment made to the VEIL is nothing but the rent and having failed to remit the TDS to Government account, the provisions of section 40(a)(ia) are squarely applicable - Additions confirmed - Decided against the assessee. Disallowance u/s 40A(2) - amount paid to related / specified persons - substantial increase in payment of rent - Held that:- the issue needs detailed verification at the end of the AO in the light of the above discussion. The assessee is directed to furnish the details of other payments made to VEIL with nature and purpose and the detailed inventory of items for which the items are leased to the assessee in the earlier year and the year under consideration with proper evidence. - additions set aside on the disallowance u/s 40A(2) for denovo consideration of the AO. Disallowance of 20% of the miscellaneous expenses - the expenses were mostly made out of self made vouchers - Held that:- Since the assessee is a society and claimed to be non profitable organization, it is not expected to incur public relations expenses which are not verifiable with the documentary evidence. However considering the arguments made by the Ld.A.R, we consider it is reasonable to restrict the disallowance to the extent of 5%. - Decided partly in favor of assessee.
|