40(a)(ia) expenditure not claimed in P&L

Sumilon Ind. Ltd vs. ITO 

The facts were, a sum of Rs.10,35,838/- representing Commission Payment was capitalized by the assessee as it directly related to the acquisition of the capital asset. Whether the AO and the ld. CIT(A) disallowed the said amount as no TDS was deducted at the time of payment. Held that, as the assessee had not claimed the sum as expenditure, in the profit and loss account no disallowance can be made. The question is "If TDS would have been made whether AO would have allowed the expenditure from the profit and loss account even though assessee is not claiming the same. In our view not, and therefore, the addition is misconceived and is accordingly deleted."  

Similarly a sum of Rs.83,589/- was paid to C & F agent. But no such claim is made in the profit and loss account and also no TDS was made. For the reasons given by us in respect of addition made u/s 40(a)(ia), we hold that no addition can be made thereon, once no claim is made in profit and loss account, even if TDS is not made.

ITR-V not received at CPC or if the CPC fails to trace the same – Whether return can be treated as invalid

M/s. Crawford Bayley & Co vs UOI & Ors (HC)

The assessee successfully uploaded its electronic return on the official website of Income tax department, though the electronic return was uploaded, ITR-V which was transmitted by ordinary post to Centralized Processing Center was not received. It is deemed never to have been filed since it was not duly verified in terms of the provisions of Section 139 of the Income Tax Act, 1961. Whether the return is therefore, treated as invalid? The high court allowing the petition files by assessee and giving an opportunity to assessee to submit a copy of return before AO again and held that the provisions of Section 139 (9) can be fulfilled by permitting the assessee to file a verification of the return before the Assessing Officer within a period of one week from today.