Disallowance of Expenses due to non-deduction of TDS--Section 10B case

Hi Mr Kalra,

I don't think you need to add back the amount of expenses on which TDS though ought to have been deducted hasn't been deducted. Section 40 says "the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession". And Section 10B forms part of Chapter III, which chapter is titled "Incomes which do not form part of total income". But Section 10B speaks not of "exemption" but of "deduction". The Chapter heading carries more weight than the section itself. So I feel since income eligible for Section 10B exemption never forms part of our total income and therefore we never undertake the exercise of "computing the income chargeable under the head B/P", there's no question of disallowance u/s 40a(ia) in case TDS hasn't been made on the specified expenses.Other consequences of non-deduction of TDS will follow, of course.Thanks,CA Sanjeev Bedi--- In ICAI_CIRC_MEERUT_ CA@yahoogroups. com, "verendra Kalra" wrote:>> > > Dear Members, > > The income of an enterprise is exempt u/s 10B. Pl. advise what will be the> impact on the exempt profits, in respect of any disallowance due to failure> to deduct TDS on expense payments made to earn the export income of that> enterprise?> > > > Verendra Kalra> Nangia and Company> Chartered Accountants> 75/7, Rajpur Road,> Dehradun -248001 (India)> O +91-135- 2747084,2743283> F +91-135- 2740186> E-mail: verendra.kalra@ ... > W-Site: www.nangia.com Please note change