Shri Rajendra K.Patel, Ahmedabad V. The Income Tax Officer, Ward-9(4), Ahmedabad

ITA 1698/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8708 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 02-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: GRISHMA R SONI
• Keywords: Retrospective amendment

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO. 1698/AHD/2014 / ASSESSMENT YEAR: 2009-10 SHRI RAJENDRA K PATEL, 3/B, URMIJIVAN SOCIETY, C/O. LIC STAFF SOCIETY, VINZOL CROSS ROAD, VATVA, AHMEDABAD PAN : AIOPP 9436 H VS. THE ITO, WARD 9(4), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : GRISHMA R. SONI, AR REVENUE BY : V.K. SINGH, SR DR ' / DATE OF HEARING : 28/07/2017 / DATE OF PRONOUNCEMENT: 01/08/2017 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE US AGAINST ORDER OF T HE LD. CIT(A)-XXI, AHMEDABAD DATED 29.04.2014 PASSED FOR THE ASSESSMEN T YEAR 2009-10. 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS TH AT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.12,55,90 2/- WHICH WAS DISALLOWED BY THE ASSESSING OFFICER UNDER SECTION 4 0(A)(IA) OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HIS RETURN OF INCOME ON 24.08.2009 DECLARING TOTAL INCOME AT RS. NIL. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND N OTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AND SERVED UPON THE AS SESSEE. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE ASSESSING OFFICER THAT THE ASSESSEE HAS PAID ITA NO. 1698/AHD/2014 SHRI RAJENDRA K PATEL VS. ITO FOR AY: 2009-10 2 INTEREST EXPENDITURE TO THE FOLLOWING PARTIES AND T HE DETAILS OF THE SAME, AS NOTICED BY THE ASSESSING OFFICER, ARE AS UNDER:- SR. NO. NAME OF COMPANY AMOUNT 1. CHOLA MANDALAM DBS FIN. LTD. 58,844/- 2. GE CAPITAL 5,24,510/- 3. GECTFS FLEXIBLE FIN. 94,312/- 4. MAGMA LEASING LTD. 2,00,904/- 5. RELIANCE FIN. LTD. 10,30,765/- 6. TATA FIN. LTD. 4,36,176/- TOTAL 23,45,511/- 3.1 ACCORDING TO THE ASSESSING OFFICER, THE ASSESSE E FAILED TO DEDUCT TDS UNDER SECTION 194A OF THE INCOME-TAX ACT; THEREFORE , THE EXPENDITURE CLAIMED AT RS.23,45,511/- DESERVES TO BE DISALLOWED WITH THE HELP OF SECTION 40(A)(IA) OF THE ACT. 4. ON APPEAL, THE LD. CIT(A) HAS DELETED THE DISAL LOWANCE OF RS. 58,844/- IN RESPECT OF CHOLA MANDALA DBS FIN. LTD AND RS.10, 30,765/- IN RESPECT OF RELIANCE FIN. LTD. THE LD.CIT(A) HAS CONFIRMED REST OF THE DISALLOWANCES AMOUNTING TO RS.12,55,902/-. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET CONTENDED THAT RECIPIENT OF INTEREST ARE FINANCE CO MPANIES. THEY MUST HAVE INCLUDED THESE AMOUNTS IN THEIR RETURNS OF INCOME, AND THEREFORE, THE ASSESSING OFFICER SHOULD HAVE VERIFIED THIS ASPECT. IN CASE THESE COMPANIES INCLUDED THE INTEREST INCOME IN THEIR RETURNS, THEN IN VIEW OF THE HON'BLE SUPREME COURT DECISION IN THE CASE OF HINDUSTAN COC A COLA BEVERAGE P. LTD. VS. CIT, 163 TAXMANN 355 (SC), DISALLOWANCE DE SERVES TO BE DELETED. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A). 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. WE FIND THAT THE ADDITION OF RS.1 2,55,902/- WAS MADE WITH ITA NO. 1698/AHD/2014 SHRI RAJENDRA K PATEL VS. ITO FOR AY: 2009-10 3 THE AID OF SECTION 40A(IA) ON ACCOUNT OF NON-DEDUCT ION OF TDS. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK T OWNSHIP LTD., 377 ITR 635 HAS OBSERVED THAT SECOND PROVISO TO SEC 40(A)(I A) OF THE INCOME TAX ACT, 1961 IS TO BE READ AS APPLICABLE WITH RETROSPECTIVE EFFECT. ACCORDING TO THIS PROVISO, IF A PAYEE HAS FILED ITS RETURN OF INCOME DISCLOSING THE PAYMENT RECEIVED, THEN THE ASSESSEE WOULD NOT BE CONSIDERED IN DEFAULT. IN THE PRESENT CASE, IT HAS BEEN ALLEGED AGAINST THE ASSES SEE THAT IT MADE PAYMENT OF INTERESTS TO VARIOUS PRIVATE FINANCIAL INSTITUTI ONS BUT THE ASSESSEE FAILED TO DEDUCT TDS. AS PER THE DECISION OF THE HON'BLE DELH I HIGH COURT CITED SUPRA, THIS ASPECT HAS TO BE VERIFIED. THEREFORE, R ESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE DELHI HIGH COURT (SUPRA), WE AR E OF THE VIEW THAT IF RECIPIENTS HAVE INCLUDED THE AMOUNTS OF TAXES EMBED DED IN THE PAYMENT MADE BY THE ASSESSEE IN ITS RETURN, THEN THE ASSESS EE CANNOT BE TREATED IN DEFAULT, AND NO DISALLOWANCE UNDER SECTION 40(A)(IA ) IS TO BE MADE. ACCORDINGLY, WE SET ASIDE THIS ISSUE TO THE FILE OF THE LD. ASSESSING OFFICER FOR VERIFICATION. THE LD. ASSESSING OFFICER SHALL CALL FOR DETAILS FROM PARTIES MENTIONED HEREINABOVE, AND VERIFY WHETHER THEY HAVE ACCOUNTED THESE INTEREST RECEIPTS IN THEIR INCOME TAX RETURNS OR NO T. IF THEY ARE ACCOUNTED, THEN NO DISALLOWANCE SHALL BE MADE. IT IS ALSO OBSE RVED THAT THE ASSESSEE SHOULD ALSO MAKE EFFORT FOR SUBMITTING THESE DETAIL S OF RECIPIENT COMPANIES. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 1 ST AUGUST, 2017 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/08/2017 BIJU T., SR.PS ITA NO. 1698/AHD/2014 SHRI RAJENDRA K PATEL VS. ITO FOR AY: 2009-10 4 ' '() *) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! # / CONCERNED CIT 4. # ( ) / THE CIT(A) 5. & ! , ! , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD