Deepak Tapse (Accounts Manager - Taxation) (1771 Points)
15 May 2015We have paid Professional Fees to foreign company during last FY ie 2013-14 duly grossing up (Say 100+11) Less TDS 11/- as per DTAA
After submission of return, Income Tax Department has demanded difference of 10% due to not availability of PAN. During FY 2014-15 we have paid the difference and claimed expenditure in said year.
In this regards the above expenditure is allowble exp. as per IT Act?. Pl explain in brief
CA Parth Rajendra Almaula
(Chartered Accountant)
(85 Points)
Replied 15 May 2015
Dear Deepak,
Can you elaborate the details which were mentioned in the notice issued by Govt. As i doubt that how can government demand the difference 10% of TDS where it has been deducted as per DTAA.
And secondly, please clarify that regarding which expense you are asking to claim as expenditure...
Thanks in advance
Deepak Tapse
(Accounts Manager - Taxation)
(1771 Points)
Replied 15 May 2015
ITD Demanded balance 10% due to non availabity of PAN.
Supplier given 100/- as his fees. We have paid full 100/- to them and TDS is paid from our pocket. The grossuped amount, we merged in respective expenses i.e. Professional Fees. Now the difference 10% paid to ITD debited to Professional Fees in FY 2014-15.
Supplier Bill 100/-
Grossed Up 111/-
TDS 10% 11/-
Net Paid to supplier 100/-
CAclubindia
