Disallowance u/s. 40(a)(ia)

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Paras (Querist)
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01 January 2010 For disallowance u/s. 40(a)(ia), is it necessary that firstly expenses should be debited to P&L A/c?

Consider the following case...

Company A pays Interest or Professional fees on behalf of Company B & deducts TDS & pays late to Government. However the said expense has not been debited to P&L of Company A but debited to P&l of Company B.

Which company will suffer Disallowance for late payment of TDS?

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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01 January 2010 Company B should suffer disallowance for late payment of TDS by Company A.

Here company become Representative of Company B and all losses has to be suffered by B only.