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2017 (5) TMI 973 - AT - Income TaxNon-deduction of TDS on certain payments - assessee-in-default - levy of interest u/s 201(1A) - Held that:- Assessee in his computation of income has suo-moto made the disallowance of said expenditure u/s 40(a)(ia). Further, the nature of expenses is Rent & Professional Expenses. Therefore, so far as the argument that these were mere provisions is difficult to accept since the assessee is making suo-moto disallowance against the same u/s 40(a)(ia) which is related with addition / disallowance consequent to failure of deduction of tax at source by the assessee. AR, during proceedings before us, stated that the assessee reversed the provisions in subsequent years and deducted TDS from actual payment as per law and deposited the same. If this is so, the assessee could not be required to deposit the same again by raising this demand. Therefore, we direct Ld. AO to verify the fact that whether the assessee, in subsequent years, has reversed the said amounts and deducted the due TDS at the time of actual payment and deposited the same to the credit of central government. If so, the said demand of ₹ 3,12,776/- raised u/s 201(1) shall stand deleted. So far interest u/s 201(IA) is concerned, we find that the assessee is liable to pay the same since we have already noted that the expenses against which TDS was deductible was not mere provisions and the payees were identifiable and the assessee himself disallowed the same u/s 40(a)(ia). Therefore, the interest demand raised u/s 201(IA) stand confirmed against which the interest, if any, already paid by the assessee shall be adjusted.
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