A Private Limited Company filed return within time for A.Y. 2012-13 declaring NIL income. The assessee is a civil contractor. The company did not deduct TDS on payment made to sub-contractor, rent on machinery, interest on loan and salary to director. The books could not be produced as there was fire. The AO disallowed the total payments made to sub-contractor, rent on machinery, interest on loan and salary to directors.
\nThe AO also disallowed 10% of the amount of total receipt by the company less the above four payments i.e. payment to sub-contractor, rent on machinery, , interest on loan and salary to directors. The CIT (Appeal) dismissed the appeal of the assessee and confirmed the addition made by the AO. It is an auditable case u\/s 44AB. W.E.F. 01.04.2015, u\/s 40(a)(ia) only 30% of the amount is disallowable in the TDS has not been deducted or after deduction not deposited. Please let us know whether the benefit of 30% disallowable u\/s 40(a)(ia) can be taken in A.Y. 2012-13 i.e. retrospectively. Whether the assessment can be made at the rate of 8% on total turnover or should the assessee go for VSVS. The amount disallowed is approximately Rs. 2.00 Crs. Rs. 1.45 Crs due to TDS and Rs. 55.00 Lacs 10% of total turnover minus amount on which TDS not deducted. Please advise whether the assessee should go for VSVS or should fight appeal in ITAT. <\/p>\n","protected":false},"excerpt":{"rendered":"
A Private Limited Company filed return within time for A.Y. 2012-13 declaring NIL income. The assessee is a civil contractor. The company did not deduct TDS on payment made to sub-contractor, rent on machinery, interest on loan and salary to director. The books could not be produced as there was fire. The AO disallowed the total payments made to sub-contractor, rent on machinery, interest on loan and salary to directors. The AO also disallowed 10% of the amount of total receipt by the company less the above four payments i.e. payment to sub-contractor, rent on machinery, , interest on loan and salary to directors. The CIT (Appeal) dismissed the appeal of the assessee and confirmed the addition made by the AO. It is an auditable case u\/s 44AB. W.E.F. 01.04.2015, u\/s 40(a)(ia) only 30% of the amount is disallowable in the TDS has not been deducted or after deduction not deposited. Please let us know whether the benefit of 30% disallowable u\/s 40(a)(ia) can be taken in A.Y. 2012-13 i.e. retrospectively. Whether the assessment can be made at the rate of 8% on total turnover or should the assessee go for VSVS. The amount disallowed is approximately Rs. 2.00 Crs. Rs. 1.45 Crs due to TDS and Rs. 55.00 Lacs 10% of total turnover minus amount on which TDS not deducted. Please advise whether the assessee should go for VSVS or should fight appeal in ITAT.<\/p>\n