Kohinoor Tobacoo Company, Vadodara V. The Income Tax Officer, Ward-1(2)(1), Baroda

ITA 1730/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8263 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 27-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRASSON KABRA
• Assessee Lawyers: T P HEMANI
• Keywords: Retrospective amendment

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO. 1730/AHD/2016 / ASSESSMENT YEAR: 2012-13 KOHINOOR TOBACCO COMPANY NR. POST OFFICE G.J. COMPOUND AT & PO BAJWA, VADODARA. PAN : AABFK 8173 H VS ITO, WARD-1(2)(1) BARODA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI T.P. HEMANI, AR REVENUE BY : SHRI PRASSON KABRA, SR.DR / DATE OF HEARING : 13/04/2018 /DATE OF PRONOUNCEMENT : 10/05/2018 O R D E R PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF ASSES SEE AGAINST ORDER OF LD.CIT(A)-5, VADODARA DATED 11.4.2016 FOR THE AS STT.YEAR 2012-13. 2. THOUGH THE ASSESSEE HAS TAKEN FOUR GROUNDS OF AP PEAL, BUT ITS GRIEVANCES REVOLVES AROUND A SINGLE ISSUE VIZ. THE LD.CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE OF INTEREST PAID TO UNSECUR ED CREDITORS WITH AID OF SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961. 3. WITH THE ASSISTANCE OF LD.REPRESENTATIVES, I HAV E GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD T HAT THE ASSESSEE PAID INTEREST TO SHRI MANOJ PANDEY AND RS.58,800/- TO SM T. TRUPTI PANDEY WITHOUT DEDUCTION OF TAX UNDER SECTION 194A OF THE ACT. ON QUERY FROM ITA NO.1730/AHD/2016 - 2 - THE AO, THE ASSESSEE EXPLAINED THAT PAYEES HAD SUBM ITTED FORM NO.15G, AND THEREFORE, NO TAX WAS DEDUCTED AT SOURCE. THIS EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO. THEREFORE, AO DISALLOWED INTEREST EXPENDITURE ON THE GROUND THAT NO TDS WAS DEDUCTED. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIRC UMSTANCES, I AM OF THE VIEW THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LANDMARK TOWNSHIP P.LTD., 377 ITR 635 (DEL) HAS HELD THAT SECOND PROVISO TO SECTION 40(A)(IA) INSERTED BY FINANCE ACT, 2014 BE CONSTRUED AS 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, I DEEM IT APPROPRIATE TO S ET 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. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 10 TH MAY, 2018. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED, 10/04/2018