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Facts
The assessee's return declared a total income of Rs. 1,52,94,09,590/- for AY 2018-19. The AO disallowed contractual payments of Rs. 4,51,477/- for non-deduction of tax under Section 194C. The CIT(A) restricted the disallowance to Rs. 1,35,443/-.
Held
The Tribunal noted that the assessee had deducted taxes on the contractual payments and submitted challans as proof. The assessee also provided details of TDS on service charges paid to Mrs. Matilda D'Souza.
Key Issues
Whether the disallowance of contractual expenditure due to alleged non-deduction of TDS is justified, and whether the disallowance of employees' contribution to PF is valid.
Sections Cited
40(a)(ia), 36(1)(va), 194C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI AMARJIT SINGH & MS. KAVITHA RAJAGOPAL
O R D E R
PER AMARJIT SINGH, ACCOUNTANT MEMBER:
This appeal of the assessee for the assessment year 2018-19 is directed against the order dated 19.10.2023 passed by the ld. Commissioner of Income-tax (Appeal), NFAC, Delhi. The assessee has raised the following grounds of appeal:
1. The ld. Assessing officer erred in disallowing 30% of expenditure of Rs. 1,35,443/- due to non-deduction of taxes u/s 40(a)(ia) of the I.T. Act, 1961 when tax is deducted by the appellant.
The ld. Assessing officer erred in disallowing employees contribution to provident fund u/s 36(1)(va) of Rs. 2,94,443/-.
3. The appellant craves, leave to add, alter, amend or delete all or any of the grounds of appeal either before or during the course of appellate proceedings.”
SVC Co-operative Bank Limited A.Y. 2018-19 2. Fact in brief is that return of income declaring total income of Rs. 1,52,94,09,590/- was filed on 29.09.2018. During the course of assessment, assessing officer has disallowed contractual payment of Rs. 4,51,477/- for not deducting tax as per section 194C of the Act. In the appeal, the ld. CIT(A) has restricted the disallowance to the extent of proportionate disallowance of Rs. 1,35,443/- (30% of Rs. 4,51,477/-) made by the assessing officer u/s 40(a)(ia) due to default u/s 194C in respect of payment to contractor made by the assessee.
Heard both the sides and perused the material on record. The ld. Counsel submitted that in respect of expenses totaling to Rs. 4,51,477/- taxes has been deducted in accordance with law and in support of its contention, the assessee has filed copies of two challans of Rs. 2,241/- and Rs. 2,240/- to substantiate that due taxes of Rs. 4,516/- in respect of payment of expenses of Rs. 4,51,477/- was deducted by the assessee. In support of its claim, the assessee has also filed detail of tax deducted at source in respect of payment of Rs. 4,51,477/- made on account of service charges of premises paid to Mrs. Matilda D’Souza.
Considering the above facts and relevant supporting evidences, we direct the assessing officer to delete the impugned disallowance after verification of the copies of challans furnished by the assessee. Therefore, ground no. 1 of the appeal of the assessee are allowed for statistical purposes.
SVC Co-operative Bank Limited A.Y. 2018-19 5. Ground no. 2 in respect of disallowing employee’s contribution to PF u/s 36(1)(va) of Rs. 2,94,443/- is not pressed before us therefore the same stand dismissed.
In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 21.10.2024.