Query in section 40(a)(ia)

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CA,CS Robin Sojrani (Querist)

29 November 2007 If tax is deducted at source where it is not required to be deducted as per the provisions of Chapter XVII-B, but subsequently the tax is not deposited to the credit of Govt, whether the expense should be disallowed u/s 40(a)(ia).

Ankur Agarwal

Ankur Agarwal (Expert)

29 November 2007 The expense would be disallowed as the disallowance u/s 40(a)(ia)is on both the situations where tax is deducted but not paid(whether or not it is required to be deducted)and tax is not deducted.Also the tax deducted is a liability towards department as per the specified dates.

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)

30 November 2007 It seems that Mr. Ankur has failed to understand the question. The main point is that the assessee was not required to deduct any TDS. Hence, as per the language of section 40 (a) (ia), the section is applicable where tax is deductible under chapter XVII-B.

I am of the opinion that, expenses will not be disallowed u/s. 40(a)(ia).

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