Dushyantsinh Yadvendrasinh Chudasama Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that no disallowance under Section 43B of the Act can be made when deduction is not claimed in the profit and loss account [P&L account], and the liability is disclosed as a current liability. Accordingly, matter restored to AO to verify VAT liability.
Facts- The assessee is engaged in the business of trading in petrol, diesel, and oil under the proprietorship concern M/s Rudra Petroleum. For A.Y. 2014-15, AO disallowed interest payments of Rs.11,500/- made to M/s H J Associates u/s. 40(a)(ia) of the Act for failure to deduct TDS. The AO further disallowed Rs.8,55,000/- of interest expenses paid to related parties due to non-deduction of TDS. The AO also made an addition of Rs.69,709/- u/s. 43B of the Act for unpaid VAT liability and Rs.12,83,000/- u/s. 68 as unexplained unsecured loans, citing the assessee’s failure to prove the creditworthiness of the lenders.
For A.Y. 2015-16, the AO added Rs.2,902/- due to an omission in declaring interest income from fixed deposits. A disallowance of Rs. 9,234/-was made u/s. 40(a)(ia) for non-deduction of TDS on interest expenses related to fleet card charges and late payment. AO also made a substantial addition of Rs. 22,19,000/- u/s. 69, treating the opening balance as unexplained investment due to a lack of documentary evidence.
