Interest Payment On Late Payment Of TDS Not Eligible For Deduction Under Business Expenditure: ITAT
2 years, 4 months ago

Interest Payment On Late Payment Of TDS Not Eligible For Deduction Under Business Expenditure: ITAT

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal has held that interest payment on late payment of TDS is not an eligible business expenditure for deduction and it is not compensatory in nature. The two-member bench of A. D. Jain and Dr. B. R. R. Kumar has observed that the payment of interest on late deposit of TDS levied u/s 201 is neither an expenditure only and exclusively incurred for the purpose of the business nor a deduction under section 37 of the Income Tax Act. Section 201 of the Income Tax Act requires assessees to pay 1.5% simple interest per month or part of a month in the event of a delay in remitting the TDS amount deducted to the Central Government's treasury. Section 36 of the Act allows a deduction for interest paid on capital borrowed while computing the business income of the taxpayer.

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History of this topic

Interest Not Leviable From Assessee For Short Payment Of Tax Due To Payer's Default In Deducting TDS Before FY 2012-2013: ITAT
7 months, 2 weeks ago

Interest Not Leviable From Assessee For Short Payment Of Tax Due To Payer's Default In Deducting TDS Before FY 2012-2013: ITAT

Live Law  

The Delhi Bench of Income Tax Appellate Tribunal has held that since the assessee was a non-resident, the entire tax was to be deducted at source on payment made by the payer to it, and there was no question of advance tax payment by the assessee; accordingly, no interest under Section 234B could be levied upon the assessee.The bench of …

Assessee Is Eligible For Credit Of TCS Paid U/S 194Q If There Is No Shortfall In Payment Of TDS: Vishakhapatnam ITAT
7 months, 3 weeks ago

Assessee Is Eligible For Credit Of TCS Paid U/S 194Q If There Is No Shortfall In Payment Of TDS: Vishakhapatnam ITAT

Live Law  

On finding that there is no short fall of TDS and the assessee is eligible to get credit of the entire amount, the Visakhapatnam ITAT directed the AO to grant credit of the entire amount deducted as tax at source u/s. The Bench noted that Kaccha Arahtias turnover includes only the gross commission and not the sales effected on behalf …

No Question Of Invoking Sec 201(1)/201(1A) if Taxpayer Has Deducted TDS At Appropriate Rates: Rajkot ITAT
10 months, 2 weeks ago

No Question Of Invoking Sec 201(1)/201(1A) if Taxpayer Has Deducted TDS At Appropriate Rates: Rajkot ITAT

Live Law  

Noting that assessee has also furnished tabular chart along with supporting documents to demonstrate that TDS at appropriate rates has been deducted on such trade discount / commission given to it's agents, the Rajkot ITAT held that assessee cannot be held as in default for not deducting TDS. The Division Bench of Waseem Ahmed & Siddhartha Nautiyal observed that “the …

Voluntary Disallowance Of Expense U/s 40(A)(ia) Is No Basis To Treat Taxpayer As 'Assessee In Default' U/s 201(1): Delhi ITAT
10 months, 2 weeks ago

Voluntary Disallowance Of Expense U/s 40(A)(ia) Is No Basis To Treat Taxpayer As 'Assessee In Default' U/s 201(1): Delhi ITAT

Live Law  

On finding that voluntary disallowance of expense u/s 40 of the Income Tax Act is not a ground to treat the assessee as 'assessee in default' u/s 201, the Delhi ITAT deleted the addition of chargeable interest u/s 201 as well as the treatment of 'assessee in default' u/s 201. The Bench comprising Anubhav Sharma and M. Balaganesh observed that, …

Department Can Bring Expenditure Incurred In Earlier Years To Be Taxed In Subsequent Years On Grounds Of Bogus Expenditure: ITAT
1 year, 7 months ago

Department Can Bring Expenditure Incurred In Earlier Years To Be Taxed In Subsequent Years On Grounds Of Bogus Expenditure: ITAT

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal has observed that the department can bring expenditures incurred in earlier years to be taxed in subsequent years on grounds of bogus expenditure.The bench of B. R. R. Kumar has observed that the department can bring the expenditure incurred in the earlier years to be taxed in the subsequent years if …

Husband Entitled To TDS Credit On Interest Earned From Amount Gifted To His Wife: ITAT
1 year, 8 months ago

Husband Entitled To TDS Credit On Interest Earned From Amount Gifted To His Wife: ITAT

Live Law  

The Income Tax Appellate Tribunal's, Pune Bench ruled that the husband is entitled to TDS credit on interest earned on the amount gifted to his wife.The two-member bench of R.S. The Income Tax Appellate Tribunal's, Pune Bench ruled that the husband is entitled to TDS credit on interest earned on the amount gifted to his wife. Since the deposit was …

TDS Not Deposited By Employer, Can’t Be Adjusted Against Future Refund Due To Assessee: Delhi High Court
1 year, 9 months ago

TDS Not Deposited By Employer, Can’t Be Adjusted Against Future Refund Due To Assessee: Delhi High Court

Live Law  

The Delhi High Court has ruled that the revenue department cannot adjust the withheld tax which has not been deposited by the deductor in the Central Government Account, against the refund due and payable to the deductee/assessee. The bench of Justices Rajiv Shakdher and Tara Vitasta Ganju held that adjustment of demand against future refund amounts to an indirect recovery …

Interest Not Leviable For Belatedly Deducting TDS If There Is No Liability: Kerala High Court
2 years, 1 month ago

Interest Not Leviable For Belatedly Deducting TDS If There Is No Liability: Kerala High Court

Live Law  

The Kerala High Court has held that where there is no liability to deduct TDS, the mere fact that TDS was so deducted and paid to the Income Tax Department belatedly, cannot give rise to a claim for interest under Section 201 of the Income Tax Act.The single bench of Justice Gopinath P. has observed that the delay in remitting …

Liability To Deduct TDS Under Section 201 of Income Tax Act Is A Vicarious Liability, Which Ends With Discharge Of Principal Liability Of Recipient Of Income: ITAT
2 years, 1 month ago

Liability To Deduct TDS Under Section 201 of Income Tax Act Is A Vicarious Liability, Which Ends With Discharge Of Principal Liability Of Recipient Of Income: ITAT

Live Law  

The Mumbai bench of the Income Tax Appellate Tribunal has ruled that the liability to deduct tax at source under Section 201 read with Section 195 of the Income Tax Act, 1961, is a vicarious liability of the payer of an income and thus, the liability to deduct TDS ceases to exist when the primary liability of the recipient of …

TDS Provisions Not Applicable To Commission Paid To Bank: ITAT
2 years, 2 months ago

TDS Provisions Not Applicable To Commission Paid To Bank: ITAT

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal has held that TDS provisions are not applicable to commissions paid to banks.The two-member bench of Saktijit Dey and Dr B.R.R. The Delhi Bench of the Income Tax Appellate Tribunal has held that TDS provisions are not applicable to commissions paid to banks. Kumar has observed that commission paid to partners …

ITAT Allows Deduction To ICICI Bank On Interest Expense On Perpetual Bonds
2 years, 2 months ago

ITAT Allows Deduction To ICICI Bank On Interest Expense On Perpetual Bonds

Live Law  

The Mumbai Bench of the Income Tax Appellate Tribunal has allowed ICICI Bank the deduction on interest expense on perpetual bonds.The two-member bench of Kavitha Rajagopal and Amarjit Singh has observed that merely that RBI recognises treating the said debt instruments as additional tier/capital would not change the nature of Innovative Perpetual. The Mumbai Bench of the Income Tax Appellate …

Non-Deduction of TDS At The Year End As The Amount Payable Was Not Identifiable: Penalty not justifiable- ITAT
2 years, 9 months ago

Non-Deduction of TDS At The Year End As The Amount Payable Was Not Identifiable: Penalty not justifiable- ITAT

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal, consisting of Kul Bharat and R.K. Panda, upheld the CIT order, holding that the mere fact that taxes were not deducted on the year end provision but were deducted and deposited upon crystallisation of liability to pay the expenses does not automatically justify the imposition of a penalty under section 271C …

Assessee Not Liable To Pay Interest On Short Payment Of Advance Tax Due To Default Of Payer In Deducting TDS Before 2012-2013 FY : Supreme Court
3 years, 3 months ago

Assessee Not Liable To Pay Interest On Short Payment Of Advance Tax Due To Default Of Payer In Deducting TDS Before 2012-2013 FY : Supreme Court

Live Law  

The Supreme Court has held that the amount of income tax which is deductible or collectible at source can be reduced by the assessee while calculating advance tax before 2012-2013 Financial Year.Therefore, the assessee cannot be held liable for interest under Section 234B of Income Tax for short-fall of advance tax which arises due to reducing the income tax deductible …

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