2012 (8) TMI 700

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..... ming the disallowance of expense of Rs.2,024,455/- u/s 40(ia) of the Income Tax Act by wrongly interpreting the provisions of Income Tax Act and disregarding the facts on record. (b) On the facts and circumstances of the case the provisions of the section 40(ia) are not applicable, as it only prohibits the disallowance when the tax has not been deducted at source and not where tax has been deducted but at lower rate of income tax/surcharge. (c) Without prejudice to above and alternatively the proportionate allowance of expenditure should be directed to be allowed." 2. The only issue for consideration relates to confirming the disallowance of expenses of Rs.20,24,455/- under sec. 40(a)(ia) of the Act. The facts of the case stated in brief .....

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..... efore the due date, disallowance has to be made. When tax auditor has pointed out the figures in 3CD report and out of the same, a portion had been added back, the same provision is attracted on the remaining part also. Therefore, there was scope of making proportionate disallowance. The learned CIT(A) accordingly upheld the disallowance made by the AO. 5. Before us, the learned AR of the assessee submitted that the assessee had made payment after deducting lower tax in respect of certain items. The assessee had not included surcharge on professional charges of Rs.56,000/- and rent of Rs.1,96,000/-. As regards storage charges of Rs.16,90,982/- as per the assessee, the TDS is to be deducted under sec. 194C whereas the AO has applied provisi .....

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..... ial available on record. We have also gone through the Tax Audit Report in Form No.3CD placed at Pages 20 to 49 of the Paper Book. Annexure-XIV of the Tax Audit report gives the details of tax deductible under various sections of the Act. Page 1 of Annexure-XIV gives the details of payments on which tax has not been deducted at all. The total amount of expenditure is at Rs.7,32,827/-. Pages 2 to 6 of Annexure-XIV give the details where there is a shortfall due to lesser deduction than required to be deducted. The total amount of expenses is at Rs.20,24,455/- on which shortfall of tax at Rs.3,26,011/- has been worked out by the tax auditors. Page 3 of the Annexure gives the details where tax has been deducted but not paid to the credit of th .....

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