Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (12) TMI 1150 - ITAT BANGALOREDisallowance u/s 40(a)(i)/(ia) - assessee has claimed the amount of provision for expenses so reversed as deduction - A.R. submitted that the assessee had voluntarily disallowed a sum in AY 2006-07 u/s. 40(a)(i)/(ia) of the Act for non-deduction of tax at source - HELD THAT:- As per the provisions of the Act, if the assessee has got any benefit from an amount, which was claimed as deduction in an earlier year, then such benefit is taxable. When the assessee has not claimed the amount as deduction at all in an earlier year, any benefit obtained from it cannot be subjected to tax under the Act. In the instant case, the assessee has disallowed the provision amount of ₹ 9.71 crores while computing total income for AY 2006-07, meaning thereby, the assessee has not claimed the amount of ₹ 9.71 crores as deduction in AY 2006-07. The assessee has reversed the entire amount of ₹ 9.71 crores in the year relevant to AY 2007-08 by crediting the same to expenditure account/P & L a/c. Out of the amount so reversed, the assessee has incurred expenses to the tune of ₹ 4.17 crores. The assessee has not incurred expenses for the balance amount of ₹ 5.54 crores and hence it has increased the profit/total income of the assessee. Since it was not claimed as deduction in AY 2006-07, the same cannot be subjected to tax during the year under consideration. Accordingly, we are of the view that the Ld CIT(A) was justified in deleting the disallowance - Decided in favour of assessee.
|