05 April 2012
Section 40(a)(ia) provides that if TDS is not deducted on any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work on which TDS was deductible but has not been deducted, then the expenditure shall be disallowed.
Proviso to Section 40(a)(ia) provides that where the TDS is deducted in any subsequent year then the expense shall be allowed as an expense in the year in which the TDS is PAID.
So, on the basis of the above, since TDS has not been deducted in the FY 11-12, the expense shall be disallowed.
If the TDS is deducted AND deposited in FY 12-13, the expense shall be allowed in FY 12-13.