disallowance u/s 40a(ia)

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doshi kamleshkumar (Querist)
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02 February 2008 dear sir one of my recent clinet has paid t.d.s A.Y. 2005-2006 (accounting year 01.04.2004-31.03.2005) on 8/5/2005 even though the same was deducted during the year ended on 31.03.2005. under scrutiy for the same a.y the ITO disallowed all the expenses line contractor & subcotractors payments, payment of salaries etc. he has not deducted T.D.s. on rnet and sponsorship charges the same is also disallwed. The assessee has lost toally in business venture of prmotion business and his business was closed from 1.04.2005 and even not filed return for a.y 2006-2007. I want to file and appeal for him since he is in no condition to pay Rs.26,00,000/- tax charged on him becasue of the above disallowance. in fact he has paid T.D.S. and interest due thereon. Please advice on this case at earliest since my freind/client is working on salary of Rs.20000/- P.m.
please help me in this generous cause.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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03 February 2008 The addition made by AO seems to be technically correct and as per law .The expenditure will be allowed in next year when TDS is paid .

However you may try these two alternatives
1) File appeal , and challenge the law on the ground of resulting into untold hardship ........you may find some judicial pronouncemnts to support you.......but the matter will get ultimately settled by SC

2) See if on your facts , you can go for waiver of interest

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