Disallowance under section 40(a)(ia) not attracted if expenses are not claimed in P&L Account but capitalized- ITAT Delhi
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Case Details: |
ACIT vs. Conwood Medipharma Pvt. Ltd. |
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Appeal No.: |
ITA No. 6460/Del/2015 |
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Order pronounced by: |
ITAT Delhi |
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Date of Order: |
27-04-2020 |
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Assessment Year: |
2011-12 |
Brief Facts:
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The assessee was engaged in the business of equity trading, derivative trading and real estate investment. The A.O. disallowed the deduction claimed on account of professional fee paid of Rs. 2,76,200/- for non-deduction of tax at source. The CIT (A) deleted the addition made by the A.O. for non-deduction of tax at source. Hence, the revenue preferred this appeal. |
Tribunal’s Ruling:
The CIT (A) was correct in deleting the addition on the aforesaid ground. The assessee had not claimed professional charges in its P&L Account and had capitalized the same under work in progress i.e. “Building under construction” in fixed assets schedule. The Tribunal held that the provisions of section 40(a)(ia) are attracted only if the expenses are claimed in the profit & loss account and not when the same are capitalized.
Read Detailed Order: https://www.itat.gov.in/files/uploads/categoryImage/1588224891-6460.pdf
Disclaimer: The article is based upon the judgement of Hon’ble Tribunal and is meant only for informative purposes. Readers are requested to act diligently and under consultation with a professional before applying the information contained in this article.
