On cash payments more than Rs.20,000/-, 20% expenditure held disallowed, ITAT
On cash payments more than Rs.20,000/-, 20% expenditure held disallowed, ITAT
AO noted that certain payments were made by the assessee on account of freight charges. AO disallowed an amount of these expenses as assessee has not deducted TDS on these payments. On appeal CIT (A) held disallowance of exp. u/s 40(a)(ia) (of Income Tax Act, 1961) for violation of Sec. 194C (of Income Tax Act, 1961) is not justified. On appeal ITAT held, re-writing of books or books being corrupt by virus does not give leverage to assessee to flout laws. CIT(A) decision held right-501384
Facts in Brief:
1. In assessment, the Assessing Officer noted that certain payments were made by the assessee on account of freight charges.
2. The Assessing Officer disallowed an amount of these expenses as the assessee has not deducted tax at source on these payments.
3. On appeal CIT (A) held that the disallowance of expenditure under section 40(a)(ia) (of Income Tax Act, 1961) for violation of section 194C (of Income Tax Act, 1961) is not justified.
On appeal ITAT held,
4. We are in agreement with the findings given by the learned CIT (Appeals) that re-writing of books or books being corrupt by virus does not give leverage to the assessee to flout the laws.
5. The Income Tax Act provides that wherever the payments in excess of Rs.20,000/- are made in cash, 20% of the said expenditure are to be disallowed under section 40A(3) (of Income Tax Act, 1961).
6. We do not see any reason to interfere with the order of the learned CIT (Appeals).
7. The ground of appeal raised by the assessee is dismissed.
News Reference: Himalayan Frozen Foods Ltd.,, ... vs Department Of Income Tax
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