| Question And Answer | |
|---|---|
| Subject: | TDS ded u/s 194H |
| Category: | Income-Tax |
| Querist: | Anu Agarwal |
| Answered by: | Law Intern |
| Tags: | Business expenditure, TDS U/S 194H |
| Date: | June 17, 2025 |
A company which is into multi level marketing deducts and deposits TDS on Commission paid to its agents spread all across India. However AO has disallowed a part of Commission u/s 37(1) as it could not trace some agents through mail/email u/s 133. Company contends that onus of payees is not on it as it has completed its duty of deducting and depositing TDS. Is there any case study as such.
In my view, the deduction and deposit of TDS does not absolve the company from proving the genuineness of the expenditure under Section 37(1). As the agents are untraceable, the AO may be entitled to disallow on the ground of non-business or fictitious payments. I suggest the payer-company bring on record documentation (such as agent agreements, payment records, PAN details, or sales records) to substantiate the genuineness and business purpose of the payments.