Piramal Finance Pvt. Ltd., Mumbai V. The ACIT, Circle-2(1)(2), Vadodara

ITA 1273/AHD/2018

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6615 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 01-05-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 16-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 37; 154; 143(3); 80G; 43; 13; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 1273Ahd/2018 (िनधा रण वष िनधा रण वष िनधा रण वष िनधा रण वष / Assess ment Years: 2014-15) M / s. Pi ra ma l Ca pi tal a nd Ho us in g Fi na nc e L td. (S ucc es so r in t he b us in es s of Pi ra ma l Fi na nc e P vt . Lt d.) Pir a mal T ow er , Ga npa tr ao Ka da m M arg , Lo wer P ar el ( W es t) , Mu mb ai - 40 00 13 बनाम बनामबनाम बनाम/ V s . Th e A ssi st an t Co mmi s si on er of In co me- tax Ra nge –2 (1 )( 2) ,V ad oda ra थायी लेखा सं./जीआइआर सं./P A N / G IR N o . : A A A C G 8 4 5 7 E (Appellant) . . (Respondent) अपीलाथ ओर से/Appellant by : Shri Ronak Doshi, A.R. यथ क ओर से/Respondentby: Shri Prathvi Raj Meena, CIT. DR D a t e o f H e a r i n g 02/05/2024 D a t e o f P r o n o u n c e m e n t 07/06/2024 O R D E R PER SHRINARENDRA PRASAD SINHA, AM: The present appeal is filed by the assessee against the order of the Co mmissioner of Income Tax ( Appeals)-2, Vadodara, (in short ‘the CIT(A)’) dated 08.03.2018 for the Assessment Year 2014-15. The brief facts of the case are that the assessee had filed its return of income for A.Y. 2014-15 on 29.11.2014 declaring total inco me of Rs .93,14,45,622/-. The assessment was co mpleted u/s. 143(3) of the Income Tax Act, 1961 ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 2 – (hereinafter refer r ed as ‘the Act ’) o n 30.11.2016 at total income of Rs.1,00,59,92,332/-. The AO had made certain additions in the course of assessment which were contested before the CIT( A) and which has been decided vide the impu gned order. Aggrieved with the order of the C IT( A), the assesse has filed the present appeal. 2. It has been informed b y the assesse vide letter dated 10 t h April, 2024 that Pira mal Finance Ltd. (PF L) had merged into erstwhile Pira ma l Capital & Housing Finance Ltd. w.e .f . 31.03.2018 by or der of the NCLT, Mu mbai dated 06 t h April, 2018. Thereafter, Pira mal Capital & Housing Finance Ltd. had merged into Dewan Housing Finance Corporation Ltd. w.e.f. Septe mber 30, 2 021, which was subsequently re na med as Pira mal Capital & Housing Finance Ltd. having PAN No.AAACD1977A. The original For m No. 36 was filed in this case on 11.05.2018 by Pira mal Finance Pvt. Ltd. As the said entity has finally me rged with Pira mal Capital & Housing Finance Ltd., a re vised Form No .36 was filed b y this co mpan y, which is the ultimate successor to PFL, in the course of the appeal proceeding in order to co mplete the technical co mpliance. 3. The assessee has t aken following grounds of appeal: G R O U N D I A D D I T I O N O F I N C O M E A M O U N T I N G T O R A 1 4 , 8 0 , 2 8 5 / - 1 . O n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e a n d in l a w , t h e C T T (A ) e r r e d i n u p h o l d i n g t h e a c t i o n o f t h e A O o f ad d i n g a s u m o f R s . 1 4 , 0 0 , 2 8 5 ) a l l e g e d t o b e r e c e i v e d m e U r ba n i z e ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 3 – D e v e l o p e r s I n d i a P v t . L a d , m e r e l y o n t h e b a s i s o f mi s m a t c h i n F o r m 2 6 A S . 2 . T h e A p p e l l a n t p r a y s t h a t t h e a d d i t i o n a m o u n t i n g t o R s . 1 4 , 0 0 , 2 8 5 / - w h i c h i s n e v e r r e c e i v e d b y t h e A p p e l l a nt b e d e l e t e d G R O U N D I I : A C T I N G B E Y O N D T H E P O WE R S V E S T E D U S 2 5 1 O F T H E A C T : 1 O n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e a n d i n l a w , t h e C I T ( A ) e r r e d i n s e t t i n g a s i d e t h e i s s u e t o t h e A O wi t h t h e d i r e c t i o n t o m a k e i n q u i r i e s i n r e s p e c t o f a l l e g e d re c e i p t o f a n i n c o m e o f R s . 1 , 3 5 , 6 9 4 / - f r o m V i j a y a B a n k b e y o n d t h e p o w e r s v e s t e d i n h i m u / s 2 5 1 o f t h e A c t 2 H e f u r t h e r f a i l e d t o a p p r e c i a t e a n d o u g h t t o h a v e h e l d t h a t n o a d d i t i o n c a n b e m a d e m e r e l y o n t h e b a s i s o f m i s ma t c h i n F o r m 2 6 A S a n d n o f u r t h e r i n q u i r y i s c a l l e d f o r . 3 T h e A p p e l l a n t p r a y s t h a t i t b e h e l d t h a t t h e a l l eg e d i n c o m e o f R s . 1 , 3 5 , 6 9 4 / - f r o m V i j a y a B a n k w h i c h i s n e i t h e r a c c r u e d n o r r e c e i v e d b y t h e A p p e l l a n t c a n n o t b e a d d e d t o i ts i n c o m e . G R O U N D I I I : P R O P O R T I O N A T E D I S A L L O WA N C E O F D E D U C T I O N C L A I M E D U N D E R S E C T I O N 3 5 A C O F T H E A C T A M O U N T I N G T O R s . 2 , 3 6 , 0 8 , 1 7 3 / - 1 . O n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e a n d in l a w , t h e C I T ( A ) e r r e d i n u p h o l d i n g t h e a c t i o n o f t h e A O o f de n y i n g t h e d e d u c t i o n u / s 3 5 A C o f t h e A c t o n t h e a l l e g e d g ro u n d t h a t t h e a m o u n t c o n t r i b u t e d t o t h e e l i g i b l e i n s t i t u t i o n i s s p e n t f o r n o n - e l i g i b l e p r o j e c t s . 2 . T h e A p p e l l a n t p r a y s t h a t t h e p r o p o r t i o n a t e d i s a ll o w a n c e o f d e d u c t i o n c l a i m e d u / s 3 5 A C o f t h e A c t b e d e l e t e d . WI T H O U T P R E J U D I C E T O G R O U N D I I I , G R O U N D I V : D E N I A L O F D E D U C T I O N U / S 8 0 G O F T H E A C T A M O U N T I N G T O R S 2 , 3 6 , 0 8 , 1 7 3 / - : 1 O n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e a n d i n l a w , t h e C I T ( A ) a f t e r d i s a l l o w i n g t h e d e d u c t i o n u / s 3 5 A C o f t h e A c t e r r e d i n d e n y i n g t h e o t h e r w i s e e l i g i b l e d e d u c t i o n u/ s 8 0 G o f t h e A c t . 2 T h e A p p e l l a n t p r a y s t h a t t h e d e d u c t i o n u / s 8 0 G o f t h e A c t a m o u n t i n g t o R s . 2 , 3 6 , 0 8 , 1 7 3 / - b e a l l o w e d ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 4 – G R O U N D V : D I S A L L O WA N C E O F G U A R A N T E E C O M M I S S I O N A M O U N T I N G T O R s . 3 , 6 6 , 9 7 , 5 5 3 / - P A I D T O P I R A M A L E N T E R P R I S E S L T D (" P E L " ) 1 . O n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e a n d in l a w , t h e C I T ( A ) e r r e d i n u p h o l d i n g t h e a c t i o n o f t h e A O o f d i s a l l o w i n g R s . 3 , 6 6 , 9 7 , 5 5 3 / , b e i n g 5 0 % o f t h e G u a ra n t e e C o m m i s s i o n p a i d t o P E L , b y h o l d i n g t h e s a m e t o b e e x c e s s i v e a s c o m p a r e d t o t h e f a i r m a r k e t v a l u e w h i ch w a s n o t d i s p u t e d b y t h e A O , w i t h o u t p r o v i d i n g a n o p p o r tu n i t y t o t h e a s s e s s e e a s r e q u i r e d u / s 2 5 1 ( 2 ) o f t h e A c t 2 . H e f u r t h e r e r r e d i n n o t a p p r e c i a t i n g t h a t t h e e xp e n s e w a s i n c u r r e d w h o l l y a n d e x c l u s i v e l y f o r t h e p u r p o s e o f b u s i n e s s a n d t h e r e f o r e a l l o w a b l e u / s 3 7 ( 1 ) o f t h e A c t a n d h as b e e n s o a l l o w e d i n t h e e a r l i e r y e a r . 3 . T h e A p p e l l a n t p r a y s t h a t t h e d i s a l l o w a n c e o f 5 0 % o f t h e g u a r a n t e e c o m m i s s i o n p a i d b e d e l e t e d G R O U N D V I G R A N T O F S H O R T C R E D I T O F T D S T O T H E E X T E N T O F R S . 1 , 5 7 , 7 8 . 6 1 5 - : 1 O n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e a n d i n l a w , t h e A O e r r e d i n g r a n t i n g T D S c r e d i t o f R s . 1 2 , 9 8 , 7 8 , 5 9 1) . a s a g a i n s t R s . 1 4 , 5 6 , 5 7 , 2 0 8 / , t h e r e b y g r a n t i n g a s h o r t c r e d i t t o t h e o f R s . 1 , 5 7 , 7 8 , 6 1 5 / - 2 T h e A p p e l l a n t p r a y s t h a t t h e A O b e d i r e c t e d t o g ra n t f u l l c r e d i t o f T D S a s c l a i m e d b y t h e A p p e l l a n t a n d a s a ls o r e f l e c t e d i n F o r m 2 6 A S . G R O U N D V I I : L E V Y O F I N T E R E S T U / S 2 3 4 A O F T H E A C T : 1 O n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e a n d i n l a w , t h e C I T ( A ) e r r e d i n u p h o l d i n g t h e l e v y o f i n t e r e s t u / s 2 3 4 A o f t h e A c t a m o u n t i n g t o R s . 8 9 , 1 6 4 / - 2 T h e A p p e l l a n t p r a y s t h a t t h e i n t e r e s t u / s 2 3 4 A o f t h e A c t a m o u n t i n g t o R s . 8 9 , 1 6 4 Ground No.-1&2: Addition based on For m No. 26AS ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 5 – 4. The first two grounds taken by the assessee are in respect of addition of Rs.14,00,285/- made on the basis of Form No.26AS. Shri RonakDoshi, ld. AR of the assessee explained that certain difference was found between the a mount received and the TDS cred it as per 26AS state ment of the assessee and the a mount as appearing in the books of account. As this difference was no t reconciled in the course of assess ment, the AO had made a ddition of Rs.1,84,17,486/- in respect of 4 parties as under: i. Urbanize Developers India Pvt. Ltd. 14,00,285/- ii. True Value Ho mes (I) Pvt. Ltd. 881,507/- iii. Vija ya Bank 135,694/- iv. True Value Ho mes (I) Pvt. Ltd. 16,000,000/- The ld. CIT(A) had confirmed the addition in respect of difference of Rs.14,00,285/- appearing in the case of Urbanize Developers India Pvt. Ltd. As regarding difference of Rs.1,35,694/- in case of Vija ya Ban k, the CIT(A) had directed the AO to make e nquiry fro m the bank and thereafter decide the matter . The assessee has grievance against the decision of CIT( A) in respect of difference appearing in the name of these two parties only and the decision of the CIT(A) in respect of other two parties has not been contested. 5. The ld. AR submitted that no addition could have been made on the basis of For m No.26AS. He explained that a copy of ledger account of Urbanize Developers India Pvt. Ltd. as appearing in the books of the assessee was filed before the AO and, therefore, the AO was not correct in disregarding the ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 6 – evidence filed by the assessee and in making the addition on the basis of 26AS state ment. The ld. AR relied upon the following decisions in support of the proposition that no addition could have been made on the basis of difference in payment received as per for m 26AS and the books of accounts. i. PCIT v . MBC I nfra Space (P.) Ltd [2023] 153 taxmann.com 108 (Guj. HC) ii. Seal For Life India (P.) Ltd. v. DCI T [2018] 173 ITD 229 (Ahm. Trib) iii. P.K . Rajasekar v. ITO [2016] 161 ITD 189 (Chen. Trib.) iv. M/s. Nozaki Finance & Investment Private Ltd. v. DCIT (IT A No. 61 66/Mum/2012) (Mum. Trib.) v. TUV India (P.) Ltd. v . DCI T [2019] 110 taxmann.com 175 (Mum. Trib.) vi. Kroner Investment v. DCIT ( ITA N o. 5125/M/2013) (Mum. Trib.) 6. Per contra, the ld. CIT-DR sub mitte d that the assessee had mer el y filed a copy of the ledger account of Urbanize Developers India Pvt. Ltd as appearing in its books of account which was not confir med b y the other party. Therefore, the AO was correct in ma king the addition in respect of this difference as the sa me was not reconciled. As regarding difference in the case of Vija ya Ba nk, the ld. DR sub mitted that the direction of the ld. CIT(A) to verif y the transact ion was proper. 7. We have carefully considered the rival submissions and the facts of the case. There is no dispute to the fact that there was difference appearing in the accounts of the assessee vis-à- vis amount of transaction as per 26AS state ment in the case of ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 7 – Urbanize Developers India Pvt. Lt d. As per 26AS state ment, the total receipt fro m Urbanize De velopers India Pvt. Ltd. was Rs.13,55,39,687/- on which TDS of Rs.1,35,57,968/- was deducted. In the return of income, the assessee had clai med credit for TDS of Rs.1,34,14,940/- only and the credit for balance TDS of Rs.1,40,028/- was not claimed and carried forward in the return and corresponding inco me of Rs.14,00,285/- was also not booked. A cop y of the ledger account on Urbanize Developers India Pvt. Ltd. as appearing in the books of accounts of the assesse has been filed fro m which it is seen that there was opening balance of Rs.1,52,43,836/- and there were regular debit and credit transactions during the year . Further, th e account of Urbanize Developers India Pvt. Ltd. was squared off during the yea r and no balance was carried forward to the next yea r. Once, the difference in transactions with Urbanize developers India Pvt. Ltd. was pointed out to the assessee by the AO, the onus was squarely on the assessee to reconcile this difference. 8. The assessee has relied upon the decision of Hon’ble Gujarat High Court in case of MBC Infra Space (P.) Ltd. (supra). In that case, the assessee had claimed that there was double deduction of TDS on the same project on certain bills and the claim of the assessee was not verified by the AO. The addition in that case was deleted after verification of bank account and contract a mount received by the assessee on the basis of running bills which was upheld by the Hon ’ble High Court. In the present case, no such verification has been carried ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 8 – out, neither the assessee has explained the reason for the difference. In the case of Seal For Life India (P.) Ltd.(supra), the assessee had produced reasonable evidence establishing that a particular quantu m of interest i nco me was rec eived in his hands and no fault was found with such evidence. In the present case, no such evidence has been brought on record. The assessee has not filed even the confirmed cop y of ledger account for m the opposite party. In the case of P. K. Rajasekar (supra), the matter was re mitted back to the AO to exa mine the clai m of the assessee that the difference in 26AS and accounts of the assessee wa s due to wrong entr y and wrong credit. In the case of M/s. Nozaki Finance & Inve stment Pvt. Ltd. (s upra), the assessee had denied the a mount as reported in AIR and it was held that once the assessee has objected to the a mount reported in AIR, the AO was duty bound to make further enquiries. In the present case, the assessee has not denied the transaction and the TDS as appearing in 26AS state me nt. Thus facts of all these cases and the other cases as relied upon by the assessee are found to be different. 9. It is apparent from the fa cts as discussed above that the assessee had not denied the quantum of transaction and the TDS of Urbanize Developers India Pvt. Ltd. as reported in For m No. 26AS, rather the difference of TDS of Rs.1,40,028/- was carried forward in the return. Under the circu mstances, the assessee was duty bound to reconcile the difference in the quantum of transaction as per 26AS and as appearing in the books of accounts. The assessee has also not filed any confir mation from ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 9 – Urbanize Developers India Pvt. Ltd. that ledger account appearing in its own account which was filed befor e the AO, was correct. The ledger account as appearing in the books of the assesse is a self-serving docu ment and it does not explain the difference in transaction as noted in the case of Urbanize Developers India Pvt. Ltd. On the other hand, the AO has not made an y enquir y fro m Urbanize Developers India Pvt. Ltd. on the basis of ledger account as filed by the assessee. The matter is, therefore, set aside to the file of the AO to re-exa mine the matter once again b y making necessar y enquir y fro m Urbanize Developers India Pvt. Ltd. The ass essee ma y also be allowed another opportunity to reconcile the difference in respect of Urbanize Developers India Pvt. Ltd. and the AO ma y decide the matter after making a proper enquir y as indicated above. The ground is allowed for statistical purpose. 10. As regard to Ground No.2, we do not find anything wrong with the direction of the CIT(A) to make enquiry fro m Vi ja ya Bank and re-decide the matter i n respect of difference of Rs.1,35,694/- as appearing in 26AS. An y mis match between the accounts of the assessee and Form No.26AS has to be properly explained and enquired into. A d irection to make specific enquiry fro m the bank and to re-decide the matter does not tanta mount to setting aside the order of the AO. In view of discussions in respect of Ground No.1 as above, the direction of the CIT( A) is held as proper and Ground No.2 is dismissed. Ground No.3- P roportionate disallowance u/s.35AC o f the Act ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 10 – 11. The assessee has paid a sum of Rs.11,78,12,000/- to Health Manage ment and Research Institute, Hyderabad (HM RI) which is an eligible institute for the purpose of deduction u/s. 35AC of the Act. The claim of the assessee was exa mined b y t he AO and it was found that contribution of the assessee to HMRI had gone into its corpus. Further, HMRI had spent Rs.21,36,25,000/- on six eligible projects and an amou nt of Rs.5,35,36,000/- was spent on non-eligible projects. As the deduction u/s.35AC of the Act is ad missible in respect of a mount spent on eligible projects, the a mo unt spent by HM RI towardsineligible project was not found eligible for deduction u/s 35AC of the Act. The AO had, theref ore,disallowed proportionate deduction of Rs.2,36,08,173/- in respect of amount spent on ineligible projects. The ad dition made b y the AO was confir med b y the Ld. CI T( A). The assessee’s alternate clai m to allow the deduction u/s.80G of the Act in this respect was also not acceded b y the R e venue. 12. The Ld. AR sub mitted that assessee had made contribution to an approved institution. If HMRI had spent certain a mount for ineligible projects, the assessee had no control over that and the deduction cannot be denied in the hands of the assessee for any wrong done by the Institute. He further sub mitted that if HMRI spent certain a mount on ineligible projects, then the certificate issued by the CB DT s hould have been cancelled, which was not done. The ld. AR has drawn our a ttention to provision of Section 35AC of the Act and contended that for an y ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 11 – wrong done by the institute, no addition can be made in the hands of donor. He has placed relied upon the decision of CIT vs. Gujarat Co-op Milk Marketing Federation Ltd. 43 taxmann.com 398 (Guj.HC ) in this r egard. 13. The Ld. DR , on the other hand, submitted that the contribution made by the assessee to HMRI was f or specific projects only and if the entire amount was not spent on those approved projects, the AO had rightly made the disallowance. He strongly supported the order of t he CIT( A) in this regard. 14. We have car efull y considered the facts of the case. As per provision of Section 35AC of the Act, the assessee is eligible for deduction in respect of payment made to approved institute for carr ying out a ny eligible project or sche me . As long as this condition is satisfied, the donor is eligible to clai m the deduction. The Ld. AR had contended that for wrong application of funds by the recipient institute, no disallowance can be made in the hand of the donor and he has drawn our attention to Explanation to Section 35AC(2) of the Act, which reads as under: “Explanation.—The deduction, to which the assessee is entitled in respect of any sum paid to a public sector company or a local authority or to an association or institution for carrying out the eligible project or scheme referred to in this section applies, shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee,— (a) the approval granted to such association or institution has been withdrawn; or ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 12 – (b) the notification notifying the eligible project or scheme carried out by the public sector company or local authority or association or institution has been withdrawn.” It is apparent from the above explanation that the deduction to the donor cannot be denied even in a case where the approval of the institute is withdrawn after the date of pa yment b y the donor or where the notification in respect of eligible project or scheme is also withdrawn. Thus, the prime require ment for deduction under this section is that the payme nt is made b y an assessee to an approved institute for carrying out any eligible project or sche me. It is found that this condition is fulfilled in the case of the assessee. Merel y because the approved institute has applied the funds towards ineligible project or sche me, this c annot be a ground to deny the deduction in the hands of the assessee. The provision of Section 35AC(6) of the Act further stipulates that where the approval granted to the institute is withdrawn or where the approval for project or sche me is withdrawn then the a mount received by the approved institute will be treated as dee med inco me of such approved institute only. It is, thus, cr ystal clear from this provision that for the default of not spending amount for eligible projects, action can be taken only in the hands of the doneeinstitute and not in the hands of the donor. 15. It was held by Hon’ble Gujarat Hig h Court in the case of Gujarat Co-op Milk Marketing Federation Ltd. (supra) that if the donee trust doesn’t fulfil the conditions as stipulated u/s. 80G of the Act , it will not have any ef fect on the de duction in the hands of the donor. Though, this decision was rendered in ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 13 – the context of deduction u/s. 80G of the Act, the ra tio of this decision is equally applicable in respect of deduction u/s. 35AC of the Act. Considering the provision of Section 35AC of the Act as discussed above and also the decision of the Jurisdictional High Court, we are of the considered opinion that no disallowance of clai m u/s. 35AC of the Act should have been made in the hands of the assessee for the default on the part of the approved institute.Accordingly, the addition made on account of proportionate disallowance of clai m u/s. 3 5AC of the Act is deleted. The ground is allowed. 16. Ground No.4 was only an alternate claim for deduction u/s.80G of the Act, in case the deduction u/s.35AC of the Act was not found eligible. In view of our decision in respect of Ground No.3, th is Ground has beco me infructuous, hence dismissed. Ground No.5 – Disallowance of guarantee co mmission 17. The AO disallowed 50% of corporate guarantee co mmission paid to the associate concern M/s. Pira mal Enterprises Ltd. who had extended guarantee for various loans taken by the assessee fro m HF DC B ank, Kotak Bank, Axis bank, IndusInd Bank & SBICAP Truste e Co. etc. The corporate guarantee commis sion was paid @ 1.5% to 1.8% per annu m. The AO found that the rate of guarantee commi ssion was excessive and, therefore, disallowed 50% of the guarantee co mmission paid, which has been upheld by the Ld. CI T(A). ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 14 – 18. The ld. AR sub mitted that similar guarantee commis sion payment was claimed in the earlier years and there was no disallowance mad e by the depart me nt. Further that the AO did not invoke the provision of Section 40A(2)(b) of the Act to make this disallowance. He sub mi tted that the onus was on the AO to de monstrat e that the expenditure incurred was excessive or unreasonable, which was not discharged while making this disallowance. 19. The ld. DR supported the order of the lower authorities on this issue. 20. We have carefull y considered the facts of the case and the rival submissions. The AO has not disputed the genuineness of the guarantee commission paid. Though it is mentioned in the assessment order that there was no need for pa ying guarantee co mmission to Pira mal Enterprises Ltd., a group compan y, he did not disallow the entire guarantee co mmission. Th e AO has treated the guarantee co mmission as excessive and disallowed 50% of the claim without bringing on record any c o mparable case. As rightly p ointed out by the assessee the onus was on the depart ment to demonstrate that the expenditure incurred was excessive or unreasonable by bri ning on record guarantee co mmission payment in comparable cases. The AO has also not given any reason for disallowing 50% of guarantee co mmission payment. Further, the provision of Section 40A(2)(b) of the Act was not invoked before making adhoc disallowance of 50% of ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 15 – guarantee commis sion. Even in the case where the provision of Section 40A is invoked, the AO has to establish that the expenditure was e xcessive or unreasonable having regard to fair market value of the pa yment made or the legitimate ne eds of the business. The fact that si milar guarantee commi ssion was clai med in the past years which wa s allowed by the depart ment has also not been disputed. The disallowance made by the AO is based on mere as sumption and presumption, which cannot be upheld. Accordingly, 50% disallowance out of corporate guarantee co mmission made b y th e Revenue is deleted. The ground is allowed. Ground No.6 – Sh ort credit of TDS 21. The ld. AR submitted that full credit of tax deducted at source of Rs.14,36,36,876/- as claimed in the return of income was not allowed by the AO. The assessee had filed reconciliation of TDS as per For m 26AS and TDS as claimed in the return. The assessee had also filed a rectification application u/s. 154 of the Act dat ed 12.12.2016 for allowing full credit of TDs clai m. The AO is directed to verify the clai m of TDS as made in Inco me Ta x Return and also the re- conciliation statement filed by the assessee. The credit for TDS clai m should be allowed in accordance with provision of Section 199 of the Act. Th e ground is allowed for statistical purpose. Ground No.7 – Le vy of interest/s.234A of the Act ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 16 – 22. The ld. AR s ubmitted that the due date of filing of Inco me Tax Return for this year was extended by the CB DT. The assessee had paid all the taxes within the original due date of filing of return i.e. before 30 t h Se pte mber, 2017. Under the circu mstances, no interest u/s. 234A of the Act should have been charged. In this regard, reliance was placed on the decision of Hon’ble Gujarat High Court in the case of All Gujarat Federation of Tax Consultants vs. CBDT , [2014] 50 taxmann.com 115 (Guj.HC ). 23. Ld. DR , on the other hand, submitted that charging of interest u/s. 234A of the Act was ma ndatory. 24. We have carefully considered the submissions of the assessee. Hon’ble Gujar at High Court in the case of All Gujarat Federation of Tax Consultants (supra) held as under: “62. Such extension needs to be granted with the qualification that the same may not result into non-charging of interest under section 234A. Simply put, while extending the period of filing of the tax return and granting benefit of such extension for all other provisions, interest charged under section 234A for late filing of return would be still permitted to be levied, if the Board so choses for the period commencing from 1.10.2014 to the actual date of filing of the return of income. Those tax payers covered under these provisions if choose to pay the amount of tax on or before the 30 th September, 2014, no interest in any case would be levied despite their filing of return after the 30th September, 2014.” The due date of filing of return for A.Y. 2014-15 was 30 t h Septe mber, 2014, which was extended by the CBDT. While extending the date of filing of return, interest chargeable u/s. 234A of the Act for late filing of return was still per missible. The Hon’ble Guja rat High Court had directed that in case of tax payers who have paid the entire a mount of tax on or before 30 t h ITA No.1273/Ahd/2018 (PiramalFinance Pvt. Ltd.vs. ACIT) A.Y.– 2014-15 - 17 – Septe mber, 2014, no interest for late filing of return ma y be levied despite their filing of return after 30 t h Septe mber, 2014. As the decision of the Jurisdictional High Court is binding, the depart ment is directed to verify whether the entire a mount of tax was paid b y the assessee by 30 t h Septe mber, 2014 and if yes, then follow the direction of the Hon’ble Court regarding non- charging of interest u/s.234A of the Act.The ground is allowed for statistical purpose. 25. In the result, appeal preferred b y the assessee is partly allowed. This Order pronounced on 07/06/2024 Sd/- Sd/- (T.R. SENTHIL KUMAR) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 07 /06/2024 S. K. SINHA आदेश क ितिलिप अ ेिषत आदेश क ितिलिप अ ेिषतआदेश क ितिलिप अ ेिषत आदेश क ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबंिधत आयकर आयु / Concerned CIT 4. आयकर आयु (अपील) / The CIT(A)- 5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार आदेशानुसारआदेशानुसार आदेशानुसार/ BY ORDER, उप उपउप उप/सहायक पंजीकार सहायक पंजीकारसहायक पंजीकार सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद / ITAT, Ahmedabad