I would conflict a bit with the agrument placed by Mr. S K Batra.
If TDS is receivable from party then
Party -- Dr (Difference of TDS Amt)
TDS Receivable - Cr (Difference of TDS Amt)
(This enrty will make TDS Receivable ledger as NIL and create a debtor in the name of Party from which the diff amount of TDS is receivable)
If TDS is not recoverable from party then
Capital ---Dr (Difference of TDS Amt)
TDS Receivable - Cr (Difference of TDS Amt)
(This entry will make TDS Receivable ledger as NIL and the difference of TDS amount is reduced from capital as it is not allowed as expenses in PL Account)
The difference in TDS Amount is not allowed as expenses but it is not an expenses rather a type of bad debt of Income Tax which is not recoverable. Difference of TDS is caused because of some miscalculation on the part of assessee hence it is not allowed as expenses.
I am not 100% sure on this concept but i feel it to be more logical