INCOME TAX ACT, 1961

Section 40(a)(ia)

Business disallowance under section 40(a)(ia) - Non-deduction of TDS - Contract receipt by assessee -

Assessee was an AOP and was a civil contractor which was joint venture by M/s. SE Pvt. Ltd. in the ratio of 70:30. AO found that the assessee received contract and no income was offered for taxation. Thus, he held that the contract receipt should be treated as sub-contract and made disallowance for not deducting TDS under section 40(a)(ia). Held: The Tribunal in assessee's own case held that rigours of section 40(a)(ia) are diluted in the facts of the case since the payee has admittedly filed its return of income disclosing the impugned receipts and income earned by it embedded in the receipt had been duly offered for taxation. In this view of the matter, the assessee Joint Venture cannot be treated as assessee-in-default in view of the decision of Ansal Land Mark Township (P.) Ltd. [(2015) 377 ITR 635 (Del.) : 2015 TaxPub(DT) 3482 (Del-HC)] and Chandrakant J. Mandale [ITA No.1708/PN/2012 for the assessment year 2008-09 decided on 10-4-2015].

Followed: Ansal Land Mark Township (P.) Ltd. [(2015) 377 ITR 635 (Del.) : 2015 TaxPub(DT) 3482 (Del-HC)] and Chandrakant J. Mandale [ITA No.1708/PN/2012 for the assessment year 2008-09 decided on 10-4-2015].