Proposed adjustment u/s 143(1)(a)

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A user received a notice for a proposed adjustment under section 143(1)(a) of the Income Tax Act concerning TDS interest. Although a tax auditor included it in disallowances, the user correctly didn't add it back in their return, citing case law that deems it an allowable expense. The advice provided is to respond to the notice online via the Income Tax website, where you can agree or disagree with the proposed adjustment.

JohnR

JohnR (Querist)
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16 January 2020 In 3CD tax auditor has included TDS interest in disallowance but while filing return in computation interest on TDS is not added back because as per various case laws its allowable expense.so notice regarding proposed adjustment u/s 143(1)(a) is received for Proposed adjustment
to total income.

How to proceed in this?

CA Reshmi Greeting Kumar

CA Reshmi Greeting Kumar (Expert)
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17 January 2020 Hi John, Its right that Interest on TDS is an allowable expense u/s 37(1). You can respond to the notice u/s 143(1)(a) through the Income tax website itself. Once you login to the website using the credentials, you will be able to trace the same notice which you have received in the website too. And there you will get the option either to agree or disagree on the disallowance and you can proceed accrodingly.

Refer the case law - D.C.I.T Vs M/s. Rungta Mines Ltd (ITAT Kolkata)
Regards,
Reshmi