M/s. G.M. Agro Industries , Ahmedabad V. DCIT, Circle-3(2), Ahmedabad

ITA 1303/AHD/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5105 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 21-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Retrospective amendment

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 1303/AHD/2018 / ASSESSMENT YEAR: 2014-15 M/S.G.M. AGRO INDUSTRIES C/O. M.S. CHHAJED & CO. KAMAL SHANTI BESIDES BANK OF BARODA NR.SARDAR PATEL UNDER BRIDGE NARANPURA, AHMEDABAD 380 014. PAN : AAIFG 7253 R VS DCIT, CIR.3(2) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI V.K. SINGH, SR.DR / DATE OF HEARING : 27/06/2018 /DATE OF PRONOUNCEMENT : 01/08/2018 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF ASSESSEE AGAINST ORDER OF LD.CIT(A)-3, AHMEDABAD DATED 21.3.2018 FOR THE ASSTT.YEAR 2014-1 5. 2. SOLITARY ISSUE RAISED IN THIS APPEAL OF THE ASSE SSEE IS THAT THE LD.CIT(A) HAS ERRED IN UPHOLDING ORDER OF THE AO, B Y WHICH, THE LD.AO HAS MADE ADDITION OF RS.9,00,683/- UNDER SECTION 40 (A)(IA) OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF NON-DEDUCTION OF TDS. ITA NO.13030/AHD/2018 - 2 - 3. NONE APPEARED ON BEHALF OF THE ASSESSEE, THEREFO RE, WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE-APPELLANT AFTER HEARING THE LD.DR AND CONSIDERING THE MATERIAL AVAILABLE ON REC ORD. 4. WITH THE ASSISTANCE OF LD.DR, WE HAVE GONE THROU GH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD THAT THE ASSESSEE PAID INTEREST WITHOUT DEDUCTION OF TDS TO THE FOLLOWING PARTIES W HICH ARE NON- BANKING FINANCIAL CORPORATIONS: SR.NO. NAME OF PARTY TO WHOM INTEREST PAID AMOUNT OF INTEREST 1. TATA CAPITAL FINANCIAL SERVICES LTD. 1,56,900/- 2. BAJAJ FINANCE-2 2,19,171 3. BAJAJ FINANCE LEASING 1,14,530 4. MEGMA FINANCE 2,06,052 5. RELIGARE FIN INVEST LTD. 1,64,071 6. LOAN PROCESS FEES TO BAJAJ FINANCE-2 39,959 TOTAL INTEREST 9,00,683 ON QUERY FROM THE AO, THE ASSESSEE EXPLAINED THAT A S PER FORM NO.26A CERTIFIED BY CHARTERED ACCOUNTANTS OF VARIOUS NBFC PARTIES DECLARED INCOME, WHICH WAS DULY RECORDED IN THEIR BOOKS OF A CCOUNTS AND PAID TAXES THEREON, AND THEREFORE, ASSESSEE WAS NOT REQU IRED TO BE PAY TAX. THIS EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED B Y THE AO. THEREFORE, AO DISALLOWED INTEREST EXPENDITURE ON THE GROUND TH AT NO TDS WAS DEDUCTED. APPEAL TO THE LD.CIT(A) DID NOT BRING AN Y RELIEF TO THE ASSESSEE. 5. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIRC UMSTANCES, WE ARE OF THE VIEW THAT HONBLE DELHI HIGH COURT IN THE CA SE OF CIT VS. ANSAL LANDMARK TOWNSHIP P.LTD., 377 ITR 635 (DEL) HAS HE LD THAT SECOND PROVISO TO SECTION 40(A)(IA) INSERTED BY FINANCE AC T, 2014 BE CONSTRUED AS ITA NO.13030/AHD/2018 - 3 - APPLICABLE FROM RETROSPECTIVE EFFECT. ACCORDING TO THIS, IF RECIPIENT HAS ACCOUNTED FOR THESE RECEIPTS IN THEIR TAXABLE INCOM E, DISALLOWANCE WILL NOT BE MADE IN THE HANDS OF PAYER ON ACCOUNT OF NON -DEDUCTION OF TAX. CONSIDERING THIS ASPECT, WE DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE TO THE FILE OF THE AO WITH DIRECTION THAT THE LD.AO SH ALL VERIFY FROM THE ALLEGED LOAN CREDITORS WHETHER THEY HAVE ACCOUNTED INTEREST INCOME RECEIVED FROM THE ASSESSEE IN THEIR TAXABLE INCOME OR NOT. IF THEY HAVE ACCOUNTED FOR THEN, NO DISALLOWANCE IN THE HANDS OF THE ASSESSEE BE MADE. THE LD.AO SHALL DECIDE THIS ISSUE AFTER PRO VIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 1 ST AUGUST, 2018. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER