Harbhajan Singh, Burdwan V. I.T.O Wd - 1(4),kolkata, Asansol

ITA 1076/KOL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9534 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 06-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K K KHEMKA
• Keywords: Non-deduction of tax
• Section: 143(3); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1076 / KOL / 2013 ASSESSMENT YEAR :2008-09 HARBHAJAN SINGH KEDUA BAZR, KULTI, BURDWAN PIN-713 343 [ PAN NO.AJFPS 9367 J ] V/S . INCOME TAX OFFICER, WARD-1(4), SAHABA APARTMENT LOWER CHELIDHANGA, G.T.ROAD (WEST), ASAMSOL-713301 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI K.K. KHEMKA, ADVOCATE /BY RESPONDENT NONE /DATE OF HEARING 15-11-2016 /DATE OF PRONOUNCEMENT 18-01-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER OF C OMMISSIONER OF INCOME TAX (APPEALS)-DURGAPUR DATED 20.03.2013. ASS ESSMENT WAS FRAMED BY ITO WARD-1(4), ASANSOL U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 30.12.2010 FOR ASSESSMENT YEAR 2008-09. 2. AT THE OUTSET IT WAS NOTICED THAT THE REVENUE HA S NEITHER APPEARED BEFORE US NOR MOVED ANY ADJOURNMENT PETITION. IN SU CH SITUATION, WE DECIDED ITA NO.1076/KOL/2013 A.Y. 2008-09 HARBHAJAN SINGH VS. ITO WD-1(4), ASL. PAGE 2 TO PROCEED TO ADJUDICATE THE MATTER AFTER HEARING S HRI K.K. KHEMKA, LD. ADVOCATE APPEARED ON BEHALF OF ASSESSEE. 3. THE ASSESSEE HAS FILED THE REVISED GROUNDS OF AP PEAL VIDE LETTER DATED 28.06.2014 WHICH WE FIND RELEVANT AND PERTINENT TO THE ISSUES. NO NEW ISSUE HAS BEEN RAISED IN THE REVISED GROUNDS OF APPEAL. A LL THE ISSUES ARE EMANATING FROM THE ORDER OF LOWER AUTHORITIES. THER EFORE THE REVISED GROUNDS HAVE BEEN ADMITTED IN THE COURSE OF HEARING. 4. THE FIRST ISSUE RAISED BY ASSESSEE IN THIS APPEAL I S THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY SUSTAINING THE ADD ITION OF RS. 10,50,000.00 OF UNSECURED LOAN AS INCOME OF ASSESSEE. 4. 1 BRIEFLY, THE FACTS ARE THAT THE ASSESSEE IN THE PR ESENT CASE IS AN INDIVIDUAL AND PROPRIETOR OF M/S SALUJA MOTORS. THE ASSESSEE DERIVES ITS INCOME FROM COMMISSION ON SALE OF MOTOR CYCLES, SPA RES & ACCESSORIES AND REPAIRING AND SERVICING. THE ASSESSEE HAS SHOWN SEV ERAL LOANS FROM VARIOUS PARTIES IN HIS BALANCE-SHEET AS ON 31.03.2008 INCLU DING THE FOLLOWING LOANS:- SL.NO. NAME OF LENDER AMOUNT 1. CYRILLIC CONSULTANCY PVT. LTD. 4 LAC 2. SMT. MANMIT KOUR 2.50 LAC 3. SIMRON PRET SINGH 4 LAC DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESS ING OFFICER OBSERVED THAT THE BALANCE IN THE BANK ACCOUNT OF THE AFORESA ID PARTIES AS ON 31.03.2007 AND 31.03.2008 WAS INSUFFICIENT TO GIVE THE LOAN OF THE AFORESAID AMOUNT TO THE ASSESSEE. THE AO, IN CASE OF CYRILLIC CONSULTANCY P VT. LTD. (FOR SHORT CCP) ALSO OBSERVED THAT LOAN WAS TAKEN IN CASH. ACCORDIN G ALL THE LOANS AS DISCUSSED ABOVE WERE ADDED TO THE TOTAL INCOME OF A SSESSEE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A) WHO UPHELD THE ORDER OF AO. BEING AGGRIEVED BY THIS, ASSESSEE HAS COME UP IN AP PEAL BEFORE US. ITA NO.1076/KOL/2013 A.Y. 2008-09 HARBHAJAN SINGH VS. ITO WD-1(4), ASL. PAGE 3 6. BEFORE US LD. AR FILED PAPER BOOK WHICH IS RUNNI NG PAGES 1 TO 87 AND SUBMITTED THAT LOAN FROM CYRILLIC CONSULTANCY PVT. LTD. OF 4 LACS WAS TAKEN THROUGH BANKING CHANNEL. THE OBSERVATION OF AO THAT LOAN WAS TAKEN IN CASH IS WRONG. LD. AR IN SUPPORT OF HIS CLAIM HAS PRODUC ED COPY OF BANK STATEMENT WHICH IS PLACED ON PAGE 10 OF THE PAPER BOOK. HE FU RTHER SUBMITTED THAT ALL OTHER LOANS WERE ALSO TAKEN THROUGH BANKING CHANNEL AND IN SUPPORT OF HIS CLAIM HAS FILED THE LOAN CONFIRMATION, LEDGER COPIE S, PAN, CASH FLOW STATEMENT, BALANCE SHEET OF ALL THE PARTIES WHICH WERE PLACED ON PAGES 1 TO 51 OF THE PAPER BOOK. 7. HAVING HEARD LD. AR AND ON PERUSAL OF MATERIALS AVAILABLE ON RECORD. IN THE PRESENT CASE THE AO MADE THE ADDITION OF LOAN O F RS.4 LACS FROM CCP ON THE GROUND THAT SUCH LOAN WAS RECEIVED IN CASH, VIO LATING THE PROVISIONS OF SECTION 269SS OF THE ACT. HOWEVER ON PERUSAL OF THE RECORDS WE FIND THAT THE LOAN WAS OBTAINED THROUGH BANKING CHANNEL VIDE CHEQ UE NUMBER 313760 OF DATED 17.04.2007. THE AMOUNT OF LOAN IS REFLECTING IN THE BANK STATEMENT OF THE ASSESSEE WHICH IS PLACED ON PAGE 10 OF THE PAPE R BOOK. SIMILARLY THE ADDITION WAS MADE BY THE AO FOR THE LOAN TAKEN FROM SMT. MANMIT KAUR AND SIMRAN PRIT SINGH SALUJA FOR RS. 2.50 LACS AND RS.4 LACS RESPECTIVELY BY OBSERVING THAT THE OPENING AND CLOSING ACCOUNT BALA NCE OF BOTH THE PARTIES WAS VERY LOW. HOWEVER, ON PERUSAL OF THE RECORDS WE FIND THAT THE LOWER AUTHORITIES HAVE TAKEN ONLY INTO CONSIDERATION THE OPENING AND CLOSING BALANCE OF THE ASSESSEE IGNORING THE TRANSACTIONS TOOK PLAC E IN THE BANKS OF BOTH THE PARTIES IN INTERVENING PERIOD. WE FIND THAT THE LOA N TRANSACTIONS WERE THROUGH BANKING CHANNEL. THE LD AR IN SUPPORT OF HIS CLAIM HAS SUBMITTED THE IDENTITY PROOF, CONFIRMATION, BANK DETAILS, CASH FLOW STATEM ENTS OF BOTH THE PARTIES WHICH ARE PLACED ON PAGES FROM 1 TO 51 OF THE PAPER BOOK. THE LOWER AUTHORITIES HAVE NOT BROUGHT ANY DEFECT IN THE SUBM ISSION MADE BY THE ASSESSEE. IN VIEW OF ABOVE, WE ARE INCLINED TO REVE RSE THE ORDER OF AUTHORITIES BELOW. HENCE THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.1076/KOL/2013 A.Y. 2008-09 HARBHAJAN SINGH VS. ITO WD-1(4), ASL. PAGE 4 8. NEXT ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY SUSTAINING THE DISALL OWANCE OF INTEREST PAID FOR 2,10,184/- ON ACCOUNT OF NON-DEDUCTION OF TDS U/S. 40(A)(IA) OF THE ACT. 9. THE ASSESSEE HAS PAID INTEREST TO THE FOLLOWING PARTIES:- I) HARPEET KAAUR 47,370/- II) CYRILLIC CONSULTANCY SERVICE 1,20,764/- III) BANSAL MOTOR CORPORATION 12,473/- IV) RUDRA MOTOR 29,577/- 2,10,184/- THE AO OBSERVED THAT INTEREST EXPENSE HAS BEEN CLAI MED BY ASSESSEE WITHOUT DEDUCTING TDS U/S. 194A OF THE ACT AND HE A CCORDINGLY DISALLOWED THE SAME AND ADDED BACK TO THE TOTAL INCOME OF ASSESSEE . 10. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO GAVE RELIEF TO ASSESSEE IN PART BY OBSERVING AS UNDER:- 6. IN THIS GROUND THE APPELLANT IS DISPUTING THE A O'S ACTION IN DISALLOWING INTEREST PAID BY IT ON THE GROUND THAT NO TDS HAD BEEN DEDUCTED FROM IT. THE APPELLANTS CLAIM IS THAT EXC EPT FOR THE INTEREST PAID TO RUDRA MOTORS THE TDS ON THE OTHER AMOUNTS H AVE BEEN DULY MADE AND HAVE BEEN PAID INTO THE CREDIT OF THE GOVT . IN RESPECT OF RUDRA MOTORS THE APPELLANTS CASE IS THAT THE INTER EST WAS DEDUCTED OUT OF ADVANCE LYING WITH RUDRA MOTORS AND HE HAD NO KN OWLEDGE OF IT. I AM NOT AGREEMENT WITH THE APPELLANTS SUBMISSION ON TH IS ISSUE BECAUSE NO FATS HAVE BEEN GIVEN BY THE APPELLANT. THE DISALLOW ANCE OF THE INTEREST PAID TO RUDRA MOTORS IS CONFIRMED. FOR THE BALANCE THE AO WILL VERIFY THE APPELLANTS CONTENTION REGARDING PAYMENT OF TAX DED UCTED TO THE CREDIT OF THE GOVT. AND GIVE RELIEF AS PER LAW IF SUCH CON TENTION IS SEEN TO BE CORRECT. THIS GROUND OF APPEAL IS PARTLY ALLOWED SU BJECT TO THE DIRECTIONS GIVEN ABOVE. NOW BEING AGGRIEVED BY THIS, ASSESSEE HAS COME UP A N APPEAL BEFORE US. 11. AT THE OUTSET, LD. AR DREW OUR ATTENTION ON PAG E 52 OF THE PAPER BOOK WHERE THE DETAILS OF THE PAYMENT OF TDS DEDUCTED ON THE PAYMENT OF INTEREST TO M/S HARPEET KOUR AND CYRILLIC CONSULTANCY SERVIC E WERE PLACED ALONG WITH THE COPY OF CHALLAN FOR TDS. FOR OTHER PAYMENTS OF INTEREST TO BANSAL MOTOR CORPORATION AND RUDRA MOTOR, LD. AR SUBMITTED THAT THE INTEREST WAS PAID IN ITA NO.1076/KOL/2013 A.Y. 2008-09 HARBHAJAN SINGH VS. ITO WD-1(4), ASL. PAGE 5 THE COURSE OF BUSINESS TRANSACTIONS WITH THE AFORES AID PARTIES. HE IN SUPPORT OF HIS FILED LEDGER COPY OF BOTH PARTIES WHICH ARE PLA CED ON PAGES 53 TO 71 OF THE PAPER BOOK. 12. WE HAVE GONE THROUGH THE SUBMISSIONS MADE BY LD . AR AND ORDER OF THE LOWER AUTHORITIES AS WELL AS PERUSED THE MATERI ALS AVAILABLE ON RECORD. IN THE PRESENT CASE, THE AO MADE THE ADDITION OF INTER EST EXPENSES CLAIMED BY THE ASSESSEE ON ACCOUNT OF NON-DEDUCTION OF TDS UND ER SECTION 40(A)(IA) OF THE ACT. HOWEVER, ON PERUSAL OF THE SUBMISSION OF T HE ASSESSEE WE FIND THAT TDS WAS DULY DEDUCTED BY THE ASSESSEE ON THE PAYMEN T OF INTEREST TO HARPREET KAUR AND CYRILLIC CONSULTANCY SERVICES LIM ITED FOR RS. 47,378.00 AND RS.1,20,764/- RESPECTIVELY. THE EVIDENCE FOR DE DUCTION OF TDS ALONG WITH THE COPY OF CHALLAN FOR THE PAYMENT TDS IS PLACED O N PAGE 52 OF THE PAPER BOOK. THE TDS WAS DEPOSITED WITHIN THE DUE DATE OF FILING OF INCOME TAX RETURNS AND THE DEDUCTION IS ALLOWABLE IN TERMS OF JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VIRGIN CREATIONS IN G.A. NO. 3200 OF 2011 & ITAT NO. 302 OF 2011 WHEREIN IT WAS HELD AS UNDER:- MOREOVER, THE SUPREME COURT, AS HAS BEEN RECORDED BY THE LEARNED TRIBUNAL, IN THE CASE OF ALLIED MOTORS PVT. LTD., A ND ALSO IN THE CASE OF ALOM EXTRUSIONS LTD., AS ALREADY DECIDED THAT THE A FORESAID PROVISION HAS RETROSPECTIVE APPLICATION AGAIN, IN THE CASE RE PORTED IN 82 ITR 570, THE SUPREME COURT HELD THAT THE PROVISION, WHICH HA S INSERTED THE REMEDY TO MAKE THE PROVISION WORKABLE, REQUIRES TO BE TREATED WITH RETROSPECTIVE OPERATION SO THAT REASONABLE DEDUCTIO N CAN BE GIVEN TO THE SECTION A WELL. IN VIEW OF THE AUTHORITATIVE PRONOUNCEMENT OF THE S UPREME COURT, THIS COURT CANNOT DECIDE OTHERWISE. HENCE WE DISMISS THE APPEAL WITHOUT ANY ORDER AS TO COSTS. FOR THE OTHER 2 PAYMENTS OF INTEREST TO M/S BANSAL MOTORS CORPORATION AND M/S RUDRA MOTORS FOR RS.12,473.00 AND RS.29577.00 R ESPECTIVELY, WE CONCUR WITH THE ARGUMENT OF THE ASSESSEE THAT THE TRANSACT IONS ARE ARISING IN THE COURSE OF PURCHASES OF THE GOODS FROM THESE PARTIES AS EVIDENT FROM THE LEDGER COPIES OF BOTH THE PARTIES PLACED ON THE PAG ES 53-71 OF THE PAPER BOOK. THE INTEREST PAID TO THE PARTIES FOR THE DELAYED PA YMENT OF THE BILLS FOR THE ITA NO.1076/KOL/2013 A.Y. 2008-09 HARBHAJAN SINGH VS. ITO WD-1(4), ASL. PAGE 6 PURCHASES DOES NOT FALL UNDER THE PROVISIONS OF SEC TION 194A OF THE ACT. IN THIS CONNECTION, WE FIND THE GUIDANCE AND SUPPORT FROM T HE ORDER OF HONBLE ITAT AHMADABAD BENCHES IN THE CASE OF ITO VS PARAG MAHASUKHAL SHAH REPORTED IN 46 SOT 302 WHEREIN IT WAS HELD AS UNDER : THE TRUE CHARACTER OF THE TERM INTEREST HAS BEEN D EFINED, BUT THE DEFINITION APPEARS TO BE WIDE, INTER ALIA, COVERS I NTEREST PAYABLE IN ANY MANNER IN RESPECT OF LOANS, DEBTS, DEPOSITS, CLAIMS AND OTHER SIMILAR RIGHTS OR OBLIGATIONS. THIS DEFINITION FURTHER INCL UDES SERVICE CHARGES BUT THOSE CHARGES SHOULD BE IN RESPECT OF THE MONEY BOR ROWED. BY THIS DEFINITION, THEREFORE, IT IS EVIDENT THAT IF THE CH ARGES ARE IN RESPECT OF A DEBT OR IN RESPECT OF ANY CREDIT FACILITY THEN SUCH CHARGES ARE INCLUSIVE IN THE DEFINITION OF 'INTEREST'. THEREFORE, THE INTERE ST IS A PAYMENT OF MONEY IN LIEU OF USE OF BORROWINGS. IT IS PAYABLE BY A DE BTOR TO THE CREDITOR. BUT IT IS ALSO WORTH TO NOTE THAT THE SAID DEFINITION I S NOT WIDE ENOUGH TO INCLUDE OTHER PAYMENTS. THERE OUGHT TO BE DISTINCTI ON BETWEEN THE PAYMENTS NOT CONNECTED WITH ANY DEBT, WITH A PAYMEN T HAVING CONNECTION WITH THE BORROWINGS. A PAYMENT HAVING NO NEXUS WITH A DEPOSIT, LOAN OR BORROWING IS OUT OF THE AMBIT OF T HE DEFINITION OF INTEREST AS PER S. 2(28A).GHAZIABAD DEVELOPMENT AUTHORITY V S. DR. N.K. GUPTA (2002) 258 ITR 337 (NCDRC) RELIED ON. THE TERM 'INTEREST' USED IN S. 194A RELATES TO AND IN CONNECTION OF A DEBT OR A LOAN OR A DEPOSIT. THE CIRCUMSTANCES UNDE R WHICH THE ASSESSEE IS REQUIRED TO DEDUCT THE TAX HAVE ALSO BE EN NARRATED. THEREFORE, A CONCLUSION CAN BE DRAWN THAT IF A PAYM ENT IS COMPENSATORY IN NATURE AND NOT RELATED TO ANY DEPOS IT/DEBT/LOAN, THEN SUCH A PAYMENT IS OUT OF THE AMBIT OF THE PROVISION S OF S. 194A.NIRMA INDUSTRIES LTD. VS DY. CIT (2006) 202 CTR (GUJ) 198 : (2006) 283 ITR 402 (GUJ), CIT VS. INDO MATSUSHITA CARBON CO. LTD. (2006) 205 CTR (MAD) 493 : (2006) 286 ITR 201 (MAD) AND PHATELA CO TGIN INDUSTRIES (P) LTD. VS. CIT (2008) 303 ITR 411 (P&H) RELIED ON. AN ANOTHER INTERESTING FEATURE INVOLVED TO RESOLVE THIS CONTROVERSY IS THAT THE REVENUE OTHERWISE CANNOT ALLOW THE CLAIM O F PAYMENT UNDER S. 36(1)(III) BECAUSE AS PER THIS SECTION, THE DEDUCTI ON IS PROVIDED IN RESPECT OF THE AMOUNT OF INTEREST PAID IN RESPECT O F CAPITAL BORROWED FOR THE PURPOSE OF BUSINESS. THE ONLY PROVISION UNDER T HE ACT IS S. 37 UNDER WHICH THIS PAYMENT/EXPENDITURE IS ALLOWABLE BEING L AID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS. THE NA TURE OF PAYMENT IS SUCH THAT IT CANNOT BE CONSIDERED EITHER UNDER S. 5 6, I.E. 'INCOME FROM OTHER SOURCES' OR UNDER S. 57 PRESCRIBING DEDUCTION S ONLY IN RESPECT OF 'INCOME FROM OTHER SOURCES'. INTER ALIA, THE CONCLU SION IS THAT SINCE THE NATURE OF PAYMENT DID NOT FALL WITHIN THE CATEGORY OF 'INCOME FROM OTHER SOURCES' AS ALSO CANNOT BE ALLOWED AS PAYMENT OF IN TEREST UNDER S. ITA NO.1076/KOL/2013 A.Y. 2008-09 HARBHAJAN SINGH VS. ITO WD-1(4), ASL. PAGE 7 36(1)(III), THEREFORE, ITS TRUE NATURE IS NOTHING B UT ADDED VALUE OF COST OF PURCHASE, HENCE NO TDS WAS REQUIRED TO BE DEDUCTED. THE IMPUGNED PAYMENT HAD A DIRECT LINK AND IMMEDIAT E NEXUS WITH THE TRADE LIABILITY BEING CONNECTED WITH THE DELAYED PU RCHASE PAYMENT, HENCE, DID NOT FALL WITHIN THE CATEGORY OF 'INTERES T' AS DEFINED IN S. 2(28A) FOR THE PURPOSE OF DEDUCTION OF TAX AT SOURC E AS PRESCRIBED UNDER S. 194A. RESULTANTLY, THE ASSESSEE CANNOT BE HELD A DEFAULTER OF NON-DEDUCTION OF TAX AT SOURCE UNDER S. 194A. IF A PAYMENT IS COMPENSATORY IN NATURE AND NOT RELA TED TO ANY DEPOSIT/DEBT/LOAN, THEN SUCH A PAYMENT IS OUT OF TH E AMBIT OF THE PROVISIONS OF S. 194A; IMPUGNED PAYMENT HAD A DIREC T LINK AND IMMEDIATE NEXUS WITH THE TRADE LIABILITY BEING CONN ECTED WITH THE DELAYED PURCHASE PAYMENT, HENCE, DID NOT REQUIRE TD S AND NO DISALLOWANCE UNDER S. 40(A)(IA) WAS CALLED FOR. 12.1 SIMILARLY WE ALSO RELY IN THE ORDER OF HONBLE ITAT HYDERABAD BENCHES IN THE CASE OF VENKATESH PAPER AGENCIES (HYD.) PRIVATE LTD V. DCIT IN ITA NO. 636 (HYD) OF 2011 WHEREIN IT WAS HELD AS UNDER:- 10. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. IT IS NOT DISPUTED THAT THE INTEREST PAID O F RS.3,12,600 IS NOT FOR ANY LOAN OR DEBT INCURRED BY THE ASSESSEE BUT FOR T HE DELAYING PAYMENT OF BILLS FOR PURCHASES EFFECTED FROM M/S SINERMAS P ULP & PAPERS LTD. THEREFORE, IT HAS TO BE SEEN AS TO WHETHER SUCH PAY MENT IS IN THE NATURE OF INTEREST AS ENVISAGED U/S 2(8A) OF THE ACT. AS S EEN FROM THE ORDER OF THE ITAT AHMEDABAD BENCH IN THE CASE OF PRAG MAHASUKHLAL SHAH (SUPRA) THE TRIBUNAL HAS HELD THAT A PAYMENT WHICH HAS DIRECT LINK AND IMMEDIATE NEXUS WITH THE TRADING LIABILITY BEING CO NNECTED WITH THE DELAYED PURCHASE PAYMENTS WILL NOT FALL WITHIN THE CATEGORY OF INTEREST AS DEFINED IN SECTION 2(28A) OF THE ACT. THE PAYMEN T MADE BY THE ASSESSEE IN THE PRESENT AL BEING OF SIMILAR NATURE ALSO CANNOT BE TERMED AS INTEREST AS DEFINED US. 2(28A) OF THE ACT. EVEN WITHOUT ENTERING INTO THE CONTROVERSY AS TO WHETHER THE PAYMENT MADE ON O VERDUE BILLS WILL COME WITHIN THE AMBIT OF INTEREST AS DEFINED IN SEC TION 2(28A), THE ASSESSEE IS ALSO BOUND TO SUCCEED ON ITS ALTERNATIV E ARGUMENT THAT THE ENTIRE PAYMENT HAVING BEEN MADE DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER DISPUTE NO DISALLOWANCE C OULD BE MADE U/S. 40(A)(IA) IN VIEW OF THE ITAT SPECIAL BENCH DECISIO N IN THE CASE OF MERILYN SHIPPING & TRANSPORTS (SUPRA). IN THE AFORESAID VIE OF THE MATTER, THE DISALLOWANCE OF AN AMOUNT OF RS.3,12,60 0 MADE U/S 40(A)(IA) CANNOT BE SUSTAINED. WE, THEREFORE, DIREC T THE ASSESSING OFFICER TO DELETE THE SAME. THE GROUND RAISED BY TH E ASSESSEE IS ALLOWED. ITA NO.1076/KOL/2013 A.Y. 2008-09 HARBHAJAN SINGH VS. ITO WD-1(4), ASL. PAGE 8 THE PROPOSITION LAID DOWN BY THE HONBLE COURTS AS DISCUSSED ABOVE ARE VERY MUCH APPLICABLE TO THE INSTANT CASE ON HAND. IN THE PRESENT CASE, THE INTEREST WAS PAID FOR THE DELAYED PAYMENT OF THE BILLS WHICH IN OUR CONSIDERED VIEW IS OUTSIDE THE PURVIEW OF THE PROVISIONS OF SECTION 19 4A OF THE ACT. ACCORDINGLY, THE PROVISIONS OF TDS WILL NOT BE ATTRACTED TO THE PAYMENT OF INTEREST IN THE AFORESAID CASES. IN VIEW OF ABOVE, WE ARE INCLINED TO REVERSE THE ORDER OF AUTHORITIES BELOW. HENCE THE GROUND OF APPEAL OF TH E ASSESSEE IS ALLOWED. 13. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 18 /01/2017 SD/- SD/- ('# $%) ( $%) (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S '$( )- 18 / 01 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-HARBHAJAN SINGH, KEDUA BAZAR, KULTI, BUR DWAN PIN-713343 2. /RESPONDENT-ITO WARD-1(4), SAHABA APARTMENT LOWER C HELIDHANGA, G.T. ROAD (WEST), ASANSOLE 713301 3. (/(01 2 2 3 / CONCERNED CIT KOLKATA 4. 2 2 3- / CIT (A) DURGAPUR 5. 567 ##01, 2 01 , / DR, ITAT, KOLKATA 6. 7:; <= / GUARD FILE. BY ORDER/ 2$ , /TRUE COPY/ / ( 2 01 ,