FY 2012-13 AY 2013-14
A company. An year end provision (Mar 31.2013) was kept for Professional fees as per mercantile system of accounting to get true and fair view of PL. Rs 100/-.
Entry
Professional fee (Expense GL) Dr 100
Outstanding Liability (Liability Balance sheet GL) Cr 100
Expense was duly disallowed for AY 2013-14 under section 40a(i)(a).
FY 2013-14 AY 2014-15
Professional of company produced bill only on Dec 2013 for same Rs 100/-
Entry passed
Outstanding liability (Liability GL) Dr100
Vendor Cr 90
TDS Cr 10
This TDS was paid to Government in next month before due date of 7th jan 2014.
Since TDS ought to be deducted on 31.03.2013, Interest for the period from 31.03.2013 to 07.01.2014 paid over and above Rs 10 TDS.
This TDS challan for Rs 10 is made in AY 2014-15.
Since provision is disallowed in AY 2013-14, and since TDS is paid duly in FY 2013-14, this expense of Rs 100 is claimed in AY 2014-15.
Assessment by assessing officer for AY 2014-15
Assessing officer is not allowing Rs 100 in AY 2014-15, because TDS challan is in AY 2014-15 and not AY 2013-14(i.e. Assessment year of provision booking). Assessing officer is asking to file correction statement of TDS.
How can assessing officer tell like this?
Provision was duly disallowed in AY 2013-14
Double deduction is not claimed.
Bill is given by the professional only in Dec 13.
TDS is paid in Jan 14 and return is duly filed.
Income is booked by Professional in FY 2013-14 (AY 2014-15).
TDS is now correctly matching in the 26AS of that professional.
If correction statement is filed, mismatch will occur in the 26AS of professional.
Question
Is there any provision in the Income tax Act, that TDS challan should have been paid in AY 2013-14 and not AY 2014-15 and then only deduction can be claimed?
Regards,
Siva
CAclubindia
