TDS

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 December 2009 One of my client has made payment to Contractors, Sub-contractors and profeesional charges etc., during the year 2006 - 07. He has not deducted TDS. However TDS amount was paid during the month of October 2008 before filing the return of income. What will be his position as far as Sec 40(a)(ia). Whether the assessing officer can disallow the expenditure. Can I take a stand that the assessee has deducted the tax for that year in the month of March and get the benefit of amendment under section 40(a)(ia) by passing a JE in the books of accounts.

Sorry Sir, I regret for the mistake. Actually TDS was remitted on the date of filing of the ROI on 31.10.2007 and not 2008.

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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16 December 2009 Mere deduction of tax is not sufficient for allowance of expenditure. It has to be paid to the Government. In your case it has been paid in the year 2008. So, the expenditure shall be disallowed in the year 2006-2007 but shall be allowed as deduction in the year 2008-2009.

Querist : Anonymous

Querist : Anonymous (Querist)

16 December 2009 In my querry I had erroneously mentioned date of payment of TDS as 2008, but actually it was paid on the date of filing of IT return i.e., on 31.10.2007.

Regret for the mistake

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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03 January 2010 1. It is clear on the record that the payments to contractors were made without deducting the tax.
2. It is also clear from the JV that provision of TDS is created in the month of March07 and not before. Meaning thereby Tax is deducted in the last month of the previous year.
3. Tax is deposited on or before Due Date.
Hence expenditure is deductible in the relevant AY 2007-08

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