ACIT 11(2), MUMBAI vs. ALOK K. SHARMA, MUMBAI
In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that Section 40(a)(ia) applies only to amounts payable as of March 31st and not to amounts already paid during the financial year, even if TDS was deducted late. Therefore, no disallowance could be made.
What were the facts?
The Assessing Officer disallowed rent and consultancy payments made by the assessee under Section 40(a)(ia) for non-deduction of TDS within the stipulated time. The assessee contended that TDS was deducted and deposited, albeit late, and the payments were made during the financial year.
What were the issues?
Whether disallowance under Section 40(a)(ia) is applicable to payments made during the financial year, even if TDS was deducted late.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
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- Merilyn Shipping & Transports v. Addl. CIT139 citing136 ITD 23 · 2012 · ITAT
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI SHAILENDRA KUMAR YADAV, JM & SHRI RAJESH KUMAR, AM
Accordingly, the order of the CIT(A) be set aside and that of Assessing Officer be restored. None appeared on behalf of assessee. Therefore the appeal has been decided exparte on the basis of the argument of the learned Departmental Representative and material on record.
2.2 After going through the material on record we find that assessee has though deducted TDS late on payment of rent and consultancy charged of `9,15,400/- but paid the same to government account. Assessee has paid the rent and consultancy charges during the financial year and there was no amount was payable or outstanding as on 31st March, 2009. Provisions of section 40(a)(ia) applies to the Shri Alok K. Sharma amount which is payable as on 31st March and not on the amount paid during the year. Therefore no disallowance under section 40(a)(ia) could be made because the word “payable” used in section 40(a)(ia) of Income Tax Act has to be given its natural meaning and going by the strict interpretation, section 40(a)(ia) of the Act is applicable only to expenditure which is payable as on 31st March of every year and cannot be invoked to disallow the amounts which have already been paid during the previous year without deducting tax at source. This reasoned finding of the CIT(A) need no interference from our side. We uphold the same.
In the result, appeal filed by Revenue is dismissed. प�रणामतः राज�व क� अपील खा�रज क� जाती है । Order pronounced in the open court on 26th November, 2015. आदेश क� घोषणा खुले �यायालय म� �दनांकः 26.11.2015 को क� गई ।
More judgments on Section 40(a)(ia)
- Rekha Agarwal, Jaipur vs ITO WD 4(1), JaipurITA 844/JPR/2025[2021-22]Status: Disposed21 Oct 2026AY 2021-22
- Cdg Petchem Limited, Hyderabad vs ITO, Ward - 1(1), HyderabadITA 1900/HYD/2025[2018-2019]Status: Disposed16 Oct 2026AY 2018-2019
- M/S. Shree Laminators Ltd., Kolkata vs DCIT, Circle 4(4), KolkataITA 1534/KOL/2026[2011-2012]Status: Disposed15 Oct 2026AY 2011-2012
- J.D. Marketing, Kolkata vs ITO, Ward 37(1), KolkataITA 1493/KOL/2026[2015-2016]Status: Disposed15 Oct 2026AY 2015-2016
- J.D. Marketing, Kolkata vs ITO, Ward 37(1), KolkataITA 1492/KOL/2026[2013-2014]Status: Disposed15 Oct 2026AY 2013-2014
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