SASA Stone Private Limited Vs DCIT (ITAT Bangalore Bench)
One TDS Challan Cannot Be Forced Into One Financial Year: Disallowance u/s 40(a)(ia), ₹10.70-Crore Credits u/s 68 & Penalty u/s 271AAC Remanded—Bangalore ITAT
Summary: The Bangalore ITAT restored the entire assessment for fresh verification of the disallowance u/s 40(a)(ia) & additions aggregating to ₹10.70 crore u/s 68. It held that TDS deposited through a common challan on 25.03.2019 could not automatically be attributed entirely to one financial year & reverse-grossed to determine expenditure. It further ruled that non-response by a creditor to notice u/s 133(6) during Covid could not, by itself, justify an addition without examining identity, creditworthiness & genuineness. The connected penalty u/s 271AAC was also remanded.
Scrutiny of TDS Defaults & Unsecured Loans
The assessee filed its return for AY 2018-19 declaring total income of ₹4,22,51,100. Its case was selected for scrutiny to verify defaults in deduction/deposit of tax at source & unsecured loans.
The AO noticed that TDS under different provisions had been deposited on 25.03.2019, beyond the prescribed due date of 31.10.2018. He grossed up the TDS amounts by applying the corresponding rates of 1%, 2% & 10% to determine the underlying expenditure at ₹4,11,41,460.
Since the assessee had already disallowed 30% of certain expenditure in its computation, the AO made a further net disallowance of ₹31,57,460. A separate addition of ₹3,55,405 was made for a difference relating to amounts written off.
