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Income Tax Appellate Tribunal, ‘ C’ BENCH : CHENNAI
Before: SHRI GEORGE MATHAN & SHRI A.MOHAN ALANKAMONY
आदेश / O R D E R
PER GEORGE MATHAN, JUDICIAL MEMBER
This is an appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-3,Chennai in dated 27.10.2017 for the assessment year 2011- 12.
Mr.SP.Chidambaram represented on behalf of the Assessee 2. and Mr.Clement Ramesh Kumar represented on behalf the of the Revenue.
It was submitted by the Ld.AR that the assessee is a company, which is doing the business of providing pest control services to various retail and industrial customers. It was a submission that assessee had paid Management Fees amounting to `1,20,28,952/- to its Associate Enterprises (A.E). It was a submission that assessee had deducted the TDS in respect of the said payment in December,2010, which was liable to be remitted on or before 30th April,2011 in respect of assessment year 2011-12 as per provisions of the section 40(a)(i) of the Act. It was a further submission that however, the assessee had paid the TDS to the account of the Government only on 24.09.2011, which was before the due date of filing of the return. It was a submission that the return has been filed on 28.11.2014. It was a submission that the assessee having paid the TDS before the due date of filing of the return of income u/s.139(1) of the Act, the assessee may be granted benefit of the deduction of the expenses as claimed by the assessee. In the alternative, it was a prayer that a suitable direction may be issued to the ld. Assessing Officer to provide such allowances during the year in which the taxes are paid.
In reply, ld.D.R submitted that the TDS having not been paid within the due date as provided under the Act being 30.04.2011 for assessment year 2011-12, the deduction in respect of management fees cannot be granted to the assessee. Ld.D.R vehemently supported the orders of ld. Assessing Officer and the Ld.CIT(A).
We have considered the rival submissions. A perusal of the provisions of the section 40(a)(i) of the Act and the proviso thereto, shows that if the amount has been paid by the assessee after deduction of TDS to the account of the Government before the due date of filing of the return, then the amount could be permitted as an expenditure in the previous year in which the amount has been paid to the account of Central Government. This view of ours, find support from the decision of the Supreme Court of India in the case of CIT Vs. Calcutta Export Company reported in 404 ITR 654 (SC) wherein held that deduction of the amount is permissible in the previous year in which the amount of tax has been deducted and paid to the account of the Central Government. In the circumstances, respectfully following the principles laid down by the Supreme Court of India in the case of CIT Vs.Calcutta Export Company referred to supra, the ld. Assessing Officer is directed to allow the assessee the benefit of the expenditure of Management fees of `1,20,28,952/- in the previous year in which tax deducted in respect of the same has been paid the account of the Central Government.
5.1 We are not adjudicating the grounds in respect of reopening of assessment, as on merits the assessee has got the necessary relief.
In the result, the appeal of the assessee is partly allowed.
Order pronounced on 08th October, 2018, at Chennai.