#section 40aia

The ITAT Delhi has ruled that where the Assessing Officer has accepted the genuineness of purchases, sales, and closing stock, no disallowance under Section 68 can be made merely because trade creditors failed to respond to notices. This shields legitimate trade credit from being treated as unexplained cash credits, offering critical relief to traders with high-volume supplier networks.

The ITAT Bangalore ruled that tax at source under Section 40(a)(ia) is triggered when professional fees are accrued in the books, not when paid - allowing deduction in the year TDS is actually deposited, even if delayed. This clarifies compliance for asset managers and intermediaries making accrual-based provisions, aligning tax treatment with accounting principles.

ITAT Mumbai rules that disallowance under Section 40(a)(ia) of the Income Tax Act is limited to expenditures claimed in the profit and loss account and does not extend to amounts capitalized as work-in-progress (WIP). This holding clarifies TDS compliance obligations for taxpayers using different accounting methods, ensuring capitalized expenditures remain unaffected by the disallowance provision.

ITAT Pune upholds disallowance of unproven expenses and TDS non-compliance, affirming that mere audit certification does not absolve assessee of statutory burden of proof.