Disallowance u/s 40(a)(ia) unsustainable as TDS already deducted and deposited

Mall Hotel Ltd Vs DCIT (ITAT Delhi)

ITAT Delhi held that disallowance u/s 40(a)(ia) of the Income Tax Act on account of non-payment of TDS unsustainable as TDS already deducted and deposited by the assessee.

Facts- The assessee Company is engaged in the business of hotels, running of cinema theatre, business income from shops and rental income received from the shops. The case of the assessee was selected for compulsory manual scrutiny under CASS. During the year under consideration the assessee earned rent from various shops to the tune of Rs.4,81,82,741/- and sum of Rs. 1,53,28,744/- as common area maintenance charges. The A.O. disallowed as expenses pertaining to rental income of Rs. 16,27,495/- and Rs. 1,46,80,921/- as disallowance u/s 40(a)(ia) of the act on account of nonpayment of TDS in Government account.

Aggrieved by the assessment order, passed u/s 143(3) of the Act, the assessee preferred an Appeal before the CIT(A). The Ld.CIT(A) dismissed the Appeal filed by the assessee. Aggrieved by the same, the assessee preferred the present appeal.

Conclusion- The assessee has produced the challan along with TDS deducted and deposited in the paper book at Page No. 91 to 164, it is also found that the Ld.CIT(A) has not verified those documents on the contrary the Ld.CIT(A) erroneously observed that “the assessee has failed to furnish all the challans” without even verifying the challans produced by the assessee. Therefore, in the above facts and circumstances we deem it fit to restore the matter to the file of the A.O. for de-novo verification to verify all the challans and the details produced by the assessee and pass appropriate order in accordance with law.

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