Case Law Details
DCIT Vs Sareen Sports Industries (ITAT Delhi)
ITAT Delhi held that TDS provisions are not applicable in case of commission paid to bank and commission paid to partners. Accordingly, disallowance u/s 40(a)(ia) unsustainable.
Facts-
In course of assessment proceedings, while examining the audited financial statement of the assessee, the assessing officer found that a total credit balance of Rs.19,67,12,224 has been shown in the balance sheet. After calling for and examining the necessary details, the assessing officer observed that assessee could furnish details and confirmation in respect of sundry creditors of Rs.1,19,48,831. Further, he observed, sundry creditors of Rs.3,95,30,742 related to the preceding year i.e. assessment year 2010-11. Thus, treating the balance sundry creditors of Rs.14,52,33,651 as unexplained cash credit under Section 68 of the Act, he added back to the income of the assessee. Assessee challenged the aforesaid addition before learned Commissioner (Appeals) and the same was deleted.
In course of assessment proceedings, the assessing officer noticed that the assessee has paid commission of Rs.24,69,362 to partners, agents and bank without deducting tax at source. Accordingly, he disallowed the amount under Section 40(a)(ia) of the Act.
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