Gagrat & Co. v. ACIT - Taxpublishers.in

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The Tax Publishers2020 TaxPub(DT) 0942 (Del-Trib)

INCOME TAX ACT, 1961

Section 194J

Where TDS deducted by assessee under section 194J for the month of March, 2013 was duly paid within the month which was well before the due date specified in Section139(1) and assessee was following the cash method of accounting and has made cash payment to various parties after deducting TDS, the portion of which was allowed by AO as deductible expenditures, therefore it cannot be held that the said amount of TDS was not paid by assessee.

Tax Deduction at Source under section 194J - Delay in deposit of the TDS deduction - Assessee was followaing cash method of accounting -

AO made addition by way of disallowance of TDS on the ground that the sum deducted should have been paid during the financial years by the assessee as it was following cash system of accounting and there was delay in deposit of the TDS deduction Held: Undisputedly TDS deducted by assessee under section 194J for the month of March, 201 was duly paid which was well before the due date specified in Section139(1). When assessee had duly deposited the TDS before filing the return of income for the year under assessment, the same was allowable under section 43B. No doubt assessee is following the cash method of accounting and has made cash payment to various parties after deducting TDS, the portion of which was allowed by AO as deductible expenditures. Therefore it cannot be held that the said amount of TDS was not paid by assessee while following the cash system of accounting. High Court in case of CIT Vs. Rajinder Kumar [Income Tax Appeal No. 65/2013 decided on 1-7-2013 : 2013 TaxPub(DT) 1875 (Del-HC)] held that if statutory liability of depositing the TDS was fulfilled before the due date of filing of the return under section 139(1), the same was allowable expenses.

Relied:CIT-XIII v. Naresh Kumar Income Tax Appeal No. 24/2013 decided on 6-9-2013 : 2013 TaxPub(DT) 2840 (Del-HC) CIT-XIII v. Rajinder Kumar Income Tax Appeal No. 65/2013 decided on 1-7-2013 : 2013 TaxPub(DT) 1875 (Del-HC) Associated Law Advisers v. ACIT [ITA No. 1122/Del/2017, assessment year 2013-14 on 11-9-2019] : 2019 TaxPub(DT) 7775 (Del-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

INCOME TAX ACT, 1961

Section 37(1)