TMI Blog2019 (9) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... sum from the recipient of such income. In fact the moment assessee deducts the tax at source from the sums paid to the other person it becomes the liability of the assessee who can be held to be an assessee in default for the above sum as well as liable to pay interest and penalty also. The amount of tax deducted at source is always considered as the sum paid by the assessee on behalf of the recipient of the income. Therefore, it cannot be said that the above sum has not been paid by the assessee even while following the cash system of accounting. Further the action of the learned CIT A in invoking the provisions of section 40 (a) (i) is also devoid of any merit in view of the decision of M/S CALCUTTA EXPORT COMPANY [ 2018 (5) TMI 356 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20, New Delhi has erred in rejecting the alternative claim of the appellant that the said sum of ₹ 2,49,381/- is deductible under section 43B of the Income-tax Act, 1961. 2. That the learned Commissioner of Income-tax (Appeals)-20, New Delhi has erred in not directing the learned Assessing Officer to give interest under section 244A of the Income-tax Act, 1961 up to the date on which refund is granted. 3. It is thus prayed that the addition of the aforesaid sum of ₹ 2,49,381/- may kindly be deleted and directions may kindly be given for payment of interest under section 244A till the date on which refund is granted. 3. Only issue involved in this appeal is with respect to the deduction of INR 2 49381 representing tax d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed the deduction in respect of tax deducted at source even though it was not paid in the financial year but paid before the due date of filing of the return of income. It was further stated that outstanding tax deduction at source liability is not on account of the persons to whom the expenses have been paid but is on the account of the liability of the assessee himself. By collecting/deducting tax at source the assessee discharges, the recipient of the income from the payment of the above tax and above sum is collected by the assessee from them to be deposited on their behalf to the credit of the government. Consequently the learned AO made the above addition, which was challenged before the learned CIT A. The learned CIT A noted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee is following the cash method of accounting and therefore generally whatever is the cash outflow, the assessee is entitled to claim the same as a deductible expenditure. In the present case the assessee has made cash payment to the various parties after deducting tax at source. The portion of the amount paid to them was already allowed to the assessee as a deductible expenditure. However, the issue is whether the amount of tax deducted at source from the payment made to the recipient of such income can be said to be the amount of expenditure incurred by the assessee and paid during the year and therefore it is allowable to the assessee as business expenditure. We have carefully considered the rival contention and found that ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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