Sec 40(a)(ia) said deduction on payment of TDS is allowed in the year of payment

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA

[Before Shri Pramod Kumar, AM & Shri Mahavir Singh, JM]

I.T.A No. 1960/Kol/2008

Assessment Year: 2005-06

Sen Brothers Enterprises Pvt. Ltd.

(PAN: AAGCS 9726 C)

(Appellant)

Vs.

Assistant Commissioner of Income-tax,

Circle-2, Durgapur

 (Respondent)

For the Appellant: Shri Chirajit Goswami

For the Respondent: Shri A. K. Singh

Date of hearing: 19.03.2012

Date of pronouncement: 23.03.2012

ORDER

Per Mahavir Singh, JM

This appeal by assessee is arising out of order of CIT(A), Durgapur in Appeal No.133/CIT(A)/DGP/07-08 dated 30.06.2008. Assessment was framed by ACIT, Circle-2, Durgapur u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2006-06 vide his order dated 5.12.2007.

2. At the outset, it is noticed that this appeal is barred by limitation by 53 days and assessee has filed condonation petition stating the reasons that due to certain mishap in the family of the director, steps could not be taken to file the appeal and, therefore, there was delay of 53 days. Ld. Sr. DR, however, conceded the position and stated that delay can be condoned. In view of the above fact, we condone the delay and admit the appeal for hearing.

3. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of Assessing Officer in making disallowance of expenses by invoking the provisions of section 40(a)(ia) of the Act for late deposit of TDS i.e. as on 15.02.2006. For this, revenue has raised following three grounds:

“1. For that the orders of the officer below are arbitrary, misconceived, bad on merits of facts and in law.

2. For that the appellant claimed expenditure under different heads of expenses such as “Fabrication & Erection Expenses”, “Office Expenses” Etc. in computing the total income, the Assessing Officer should not have disallowed this claim of expenditure by invoking provisions of sub-clause (ia) of clause (a of section 4 of the Income Tax Act, 1961.

3. For that the Income so computed will not be appellant real income for that year contrary to the definition of income by Sec. 2(24) of the Income Tax Act, 1961.”

4. We have heard rival contentions and gone through facts and circumstances of the case. The brief facts leading to the above issue are that the Assessing Officer noticed from audit report Form No. 3CD that the assessee has incurred contractual payments towards fabrication and erection expenses and deducted TDS from the following parties:

“i) C. R. Enterprise Rs. 1,533/-

ii) KTCO Rs. 3,486/-

iii) Pobi Construction Rs.10,377/-

iv) Deepak Construction Rs. 3,110/-

v) Tarun Banerjee Rs. 1,096/-

vi) Geeta Construction Rs. 1,562/-

vii) Bhairab Chatterjee Rs. 1,406/-

viii) S. Bhattacharya Rs. 256/-

Total: Rs.22,926/-

But TDS was not deposited within the time limit prescribed u/s. 201 of the Act. The same was deposited on 15.02.2006. The Ld. Counsel for the assessee could not contribute anything which supports his case. But after going through the records, we find that the tax so deducted was not paid during the previous year or on or before the due date specified in section 139(1) of the Act as authorised in section 40(a)(ia) of the Act by the Finance Act, 2008 with retrospective effect from 01.04.2005. Since the payment is made as on 15.02.2006, as authorised by the proviso to section 40(a)(ia) of the Act the deduction will be allowed in Assessment Year 2006- 07 and not in this year. Appeal of assessee is dismissed.

5. In the result, appeal of assessee is dismissed.

6. Order pronounced in open court on 23.03.2012.

                                                             Sd/-                             Sd/-

                                                  (Pramod Kumar)          (Mahavir Singh)

                                                 Accountant Member      Judicial Member

Dated: 23rd March, 2012

 Jd.(Sr.P.S.)

 Copy of the order forwarded to:

1. APPELLANT – Sen Brothers Enterprises Pvt. Ltd., Angadpur, Durgapur-713 215

2. Respondent – ACIT, Circle-2, Durgapur

3. The CIT (A), Durgapur

4. CIT, Durgapur

5. DR, Kolkata Benches, Kolkata

True Copy

By order,

Asstt. Registrar.