High Court Of Gujarat
CIT vs. J. K. Construction Co.
Section : 40(a)(ia)
Akil Kureshi And Ms. Sonia Gokani, JJ.
Tax Appeal No. 706 Of 2010
July 18, 2011
JUDGMENT
Akil Kureshi, J. – The Revenue has challenged the judgement of the Tribunal dated October 13, 2009, raising the following question of law for our consideration :
“Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by the Commissioner of Income-tax (Appeals) and thereby deleting the disallowance of Rs. 32,94,149 made under section 40(a)(ia) of the Income-tax Act ?”
2. The issue pertains to the deduction of TDS and depositing the same with the Government. From the record, it emerges that for payment to contractor, the assessee had made deduction as required under law from time to time and in particular latest by March 31, 2005. This is clear from chart supplied by the assessee before the Commissioner of Income-tax (Appeals) which would establish that deduction in the case of several contractors were made on March 31, 2005. All such amounts were deposited with the Government on or around. In the background of the above undisputed facts, the Tribunal was of the opinion that by virtue of the amended provisions of section 40(a)(ia) of the Income-tax Act, 1961, the assessee has not breached the requirement of deduction and depositing of TDS.
3. Section 40(a)(ia) of the Act, as amended with effect from April 1, 2005, read as under :
“(ia) any interest, commission, or brokerage, rent, royalty fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139 :”
4. Plainly speaking, the assessee had to make deduction before 31st March of the year in question and as long as such amounts were deposited before the last date of filing of the return, requirements of law would be fulfilled. It was on this basis that the Tribunal was of the opinion that the assessee committed no wrong and was, therefore, entitled to seek deduction of Rs. 32,94,149 from the income which amount the assessee had deducted from payments of contractors and had also deposited with the Revenue before the last date of filing of the return. We do not find any illegality in the order of the Tribunal. The tax appeal is, therefore, dismissed.
[Citation : 361 ITR 181]
