30 August 2008
I need some clarification on sec.40(a)(ia)
The facts of the case is as follows: ABC Private Ltd has made a provision for payment of commission of Rs.4 lakhs during the Financial Year 2005-06 ie.on 31/03/06 to Mr.X, the director of ABC Private Ltd. At the time of Scrutiny Assessment u/s 143(2), the Assessing Officer disallows the amount of Rs.4 lakhs on the ground that the TDS amount though deducted at the time of credit to the account of the director on 31/03/06, but the same is actually remitted on 31/10/06 to the account of the Govenment.
(i) Is the action of the A.O. justified for the disallowance ? (ii) Is there any remedy available to the Assessee ie.ABC Private Limited. (iii) Does Sec.40(a)(ia) and Sec.43B co-exist?
If the expense is allowed in the FY 2006-07 in which TDS is deposited,is there a necessity for the Assessee to file a revised return for the AY 2007-08 to claim such expenditure? Kindly clarify.
CAclubindia
