02 May 2009
We have hired services of placement agencies in June 08 and accordingly bill was raised on our company for Rs 23586/- including service tax Rs 2600/- But while booking the expenses the TDS was not deducted. Later on we had dispute with the placement agency and we decided not to pay the amount. On 31-03-2009 we have written off the amount due to the placement agencies. Now our statutory auditor is asking us to pay TDS on the same alongwith interest otherwise the expenditure will be disallowed in Income Tax for non deduction of TDS. So my query is whether the TDS needs to be deducted because for us this amt is written off and ultimately credited to P&L.
02 May 2009
If amount is charged to P&L Account and reverse in same financial year then there is no question of disallowance.
Because for payments/credit during Apr to Feb, TDS should be deducted and remited by 31st march. If you have reverse the amount on 31.03.2009 then there is no question of disallwance.
CAclubindia
