TMI Blog2012 (3) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... 012 - SHIRI G. E. VEERABHADRAPPA, HON BLE PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER For the Appellant : Ms. Ritika Agarwal Sneha R. Sarbhushan For the Respondent : Shri P. C. Maurya O R D E R PER AMIT SHUKLA (J.M.) : The present appeal has been filed by the appellant against order dated 31.03.2011 passed by the learned Commissioner of Income Tax (Appeals)-28, Mumbai for the quantum of assessment passed u/s.143 for the Assessment Year 2007-08. The only issue involved in the present appeal is the disallowance of deduction u/s.80IC to the extent of ₹ 7,38,038/- in pursuance of disallowance u/s.40(a)(ia). 2. Facts of the case, in brief, are that the appellant which is a partnership firm is engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding that the appellant has deducted the tax on the payments made to the contractors and on professional charges and has also paid the TDS as per the provisions of the Act, which was also verified by the Assessing Officer. The balance amount of ₹ 7,38,038/- consisted of clearing and forwarding charges, security charges and commission charges. The learned CIT(Appeals) thus held that the provisions of section 40(a)(ia) are clearly applicable on those claim of expenses which has to be added over and above the return income. 3. The learned authorised representative did not disputed the applicability of section 40(a)(ia), however vehemently contented that the sum of ₹ 7,38,038/- which has been disallowed u/s.40(a)(ia) will go to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years if the profits and gains have been derived from such business activities. In this case, the disallowance have been made on account of non deduction of TDS on the items which are directly attributable/related to the business of the appellant, which is apparent from the heads of expenses under which these disallowances have been made. Income derived from such eligible business must be computed in accordance with the provisions of section 30 to 43D as has been provided under section 29. Section 40 is a non-obstante clause which places embargo on the allowability of expenses / expenditure from section 30 to 38. Therefore, any disallowance u/s.40(a)(ia) will go to enhance the profit of the assessee from the eligible business. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation provisions of ss. 30 to 43D as mandated by s.29. Therefore, it hardly matters whether while computing the profits in accordance with the above sections, an amount is allowed as a deduction or is disallowed and added back to the profits since computation would include both allowing a deduction and disallowing or restricting a deduction in accordance with the statutory provisions. Section 40(a)(ia) authorises the disallowance of the deduction if the tax has not been deducted and paid in time. It is part of the provisions for computation of the profits. Sec.80AB advisedly uses the expression the amount of income of that nature as computed in accordance with the provisions of this Act . . The section would have been differently ..... X X X X Extracts X X X X X X X X Extracts X X X X
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