Non-remittance of tds - disallowance

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PR.Santhosh (Querist)
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17 February 2012 Is TDS non-remittance of a builder for the expenses incurred and transfer to WIP will be disallowed. In my specific case Rs.50 lacs only is the Income Recongnised whereas Rs.7 Crores is total expenses including WIP how much expenses will they disallowed. Can we argue for disallowance upt to the extend of Income recongnised only.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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19 February 2012 Seems query is related to section 40(a)(ia) of the Income tax Act,1961. That section says any....amounts payable to a contractor......on which tax is deducted at source under chapter XVII-B.....
Coming to that chapter there section 194C says any person...... ANY SUM....
On a conjoint reading of the above provisions disallowance u/s 40(a)(ia) attracts on the expenses transferred to WIP and the argument of the disallowance up to the income recognized seems no merit.

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