Section 43B reads as under:
“Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under the Act in respect of –
(b) Any sum payable by the assessee as an employer by way of contribution
||A Pvt. Ltd., and B Ltd. are sister concerns. A Pvt. Ltd. has made the payment of job work charges to B Pvt. Ltd. A.O. has made the disallowance of job work charges u/s. 40(a)(ia) for non deduction of TDS, in the hands of A Pvt. Ltd. B Pvt. Ltd, offers the job work income from A Pvt. Ltd., in the return of income. Since A Pvt. Ltd., closes its business operations in subsequent year, it cannot claim deduction of the TDS deposited to the credit of government will A Pvt. Ltd., still be liable for disallowance u/s. 40(a)(ia)?
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||CA. H. N. Motiwalla
||28, 40(a)(ia), 43D
||disallowance, tax deducted at source
Yes. As per section 28 of the Income-tax Act 1961, the assessee should carry on the business during the year. Section 28 reads as under:
“The following income shall be chargeable to income tax under the head” Profits and gains of business or profession” –
No! One has to be careful to ensure that there is a proper segregation of the shares held on investment account from the shares held on trading account. The investment shares must be valued at cost while the trading shares can be valued at market price if that is lower.