SHRI SATNAM SINGH WADHAWA, PROP M/S PALI TRANSPORT & M/S COAL MOVERS,H.NO. 20,BEEDPARA, WARD NO.10,DIST: RAIGARH(CG) V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), MAHIMA COMPLEX, VYAPAR VIHAR, BILASPUR

ITA 177/RPR/2017

AI Insights

The case involves Shri Satnam Singh Wadhawa, who appealed against the order of the CIT(Appeals), Bilaspur, which confirmed the disallowances made by the Assessing Officer (A.O) under Section 143(3) of the Income-tax Act, 1961 for the assessment year 2012-13. The primary issues in the appeal were the disallowance of Rs.10,68,591 for interest paid to a non-banking financial company (NBFC) without deduction of tax at source as required under Section 194A, and an ad-hoc disallowance of Rs.1,00,000 from truck repair and maintenance expenses. The Tribunal, after considering the arguments and the legal provisions, upheld the decisions of the lower authorities.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 128080 (ITAT-RAIPUR)
• Duration Of Justice: 5 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 31-08-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 11-06-2017
• Other Referred Cases: M/s Palam Gas Service vs Commissioner Of Income Tax, P.M.S. Diesels & Ors. Vs. Commissioner of Income Tax \\u2013 2, Jalandhar & Ors.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Non-deduction of tax
• Section: 143(3); 40(a)(ia); 194A

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायप ु र मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPURBENCH “SMC”, RAIPUR Įी रवीश स ू द, ÛयाǓयक सदèय के सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकरअपीलसं./ ITA No. 177/RPR/2017 Ǔनधा[रणवष[ / Assessment Year : 2012-13 Shri Satnam Singh Wadhawa Prop. M/s. Patil Transport & M/s. Coal Movers, H. No.20, Beedpara, Ward No.10, Dist. Raigarh (C.G.) PAN :AAHPW1157H .......अपीलाथȸ / Appellant बनाम / V/s. The Deputy Commissioner of Income Tax, Circle-1(1), Bilaspur (C.G.) ......Ĥ×यथȸ / Respondent Assessee by : None Revenue by : Shri Gitesh Kumar, Sr. DR स ु नवाई कȧ तारȣख / Date of Hearing :01.09.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 23.11.2022 2 Shri Satnam Singh Wadhawa Vs. DCIT, Circle-1(1) ITA No.177/RPR/2017 आदेश / ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the CIT(Appeal), Bilaspur (C.G.) dated 30.03.2017, which in turn arises from the order passed by the A.O under Sec. 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 23.03.2015 for the assessment year 2012-13.The assessee has assailed the impugned order on the following grounds of appeal: “1. That under facts and the law, Ld. Commissioner of Income Tax (Appeals) erred in confirming the disallowance of Rs.10,68,591/- made by the learned Assessing Officer U/s.40(a)(ia) for non-deduction of tax at source u/s.194A on interest paid to NBFC, by rejecting the explanations filed. Prayed that addition of Rs.10,68,591/- is unjustified and be deleted. 2. That the learned Commissioner of Income Tax (Appeals) further erred in confirming the adhoc disallowance of Rs.1,00,000/- made by the Ld. AO out of “Truck repair & maintenance expense” rejecting the explanation. Prayed that addition be deleted.” 2. Succinctly stated, the assessee who is engaged in the business of transportation had filed his return of income for the A.Y.2012-13 on 31.03.2013, declaring an income of Rs.20,35,760/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s.143(2) of the Act. 3 Shri Satnam Singh Wadhawa Vs. DCIT, Circle-1(1) ITA No.177/RPR/2017 3. During the course of the assessment proceedings, it was observed by the A.O that the assessee had claimed deduction of interest expenditure of Rs. 10,68,591/- that was claimed to have been paid on a secured loan raised from Tata Motors Finance Ltd. (NBFC). As the assessee had failed to deduct tax at source on the aforesaid interest, therefore, the A.O called upon the assessee to explain as to why the same may not be disallowed u/s.40(a)(ia) of the Act. In reply, it was claim of the assessee that as the aforesaid interest expenditure as on the date of the “balance sheet” on 31.03.2012 had been “paid” and was not “payable”, therefore, the provisions of section 40(a)(ia) of the Act could not be triggered for making the said disallowance. However, the A.O not finding favor with the claim of the assessee disallowed the aforesaid interest expenditure of Rs.10,68,591/- u/s.40(a)(ia) of the Act. Also, the A.O taking note of the fact that the vouchers maintained by the assessee did not support his claim for deduction of expenses booked under the head “Truck repair & maintenance”, therefore, on an ad hoc basis disallowed an amount of Rs.1 lac. Accordingly, the A.O vide his order passed u/s.143(3) dated 23.03.2015 determined the income of the assessee at Rs.32,04,351/-. 4. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without any success. 4 Shri Satnam Singh Wadhawa Vs. DCIT, Circle-1(1) ITA No.177/RPR/2017 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before me. As the assessee appellant despite having been intimated about the hearing of appeal had failed to put up an appearance, therefore, I am constrained to proceed with and dispose off the appeal as per Rule 24 of the Appellate Tribunal Rules, 1963, i.e, after hearing the respondent revenue and perusing the orders of the lower authorities. 6. The Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. It was submitted by the Ld. DR that as the assessee as per mandate of Section 194A of the Act had failed to deduct tax at source on the interest paid to Tata Motors Finance Ltd. (NBFC), therefore, the A.O had rightly disallowed u/s 40(a)(ia) its claim for deduction of the interest expenditure of Rs.10,68,591/-. Apropos the asesssee’s claim for deduction of “Truck repair & maintenance” of Rs.1 lacs, it was submitted by the Ld. DR that as the internal vouchers maintained by the assessee in support of his claim of expenditure did neither bear complete name and address of the recipients nor the registration numbers of the vehicles which were claimed to have been repaired, therefore, the A.O had already adopted a liberal view and disallowed only an amount of Rs.1 lacs ( out of Rs.30,82,813/-). 5 Shri Satnam Singh Wadhawa Vs. DCIT, Circle-1(1) ITA No.177/RPR/2017 7. Having heard the Ld. DR and perusing the orders of the lower authorities, I finding no infirmity in the view taken by the lower authorities, who had rightly observed that as the assessee as per the mandate of Section 194A of the Act had failed to deduct tax at source on the interest paid to Tata Motors Finance Ltd. (NBFC), therefore, its claim for deduction of the said interest expenditure was liable to be disallowed u/s.40(a)(ia) of the Act. At this stage, I may herein observe that nothing had been placed on record either before the lower authorities or before me which would reveal that the interest expenditure claimed by the assessee had suffered tax in the hands of the payee i.e Tata Motors Finance Ltd. (NBFC). Apropos, the assessee’s claim that as the interest expenditure in question had been “paid” and was not “payable” as on 31.03.2012, therefore, the provisions of section 40(a)(ia) of the Act would not stand triggered, the said contention does no more survive pursuant to the judgment of the Hon’ble Supreme Court in the case of M/s Palam Gas Service vs Commissioner Of Income Tax, Civil Appeal No.5512 of 2017; dated 03.05.2017. In its aforesaid order, the Hon’ble Supreme Court upholding the view taken by the Hon’ble Punjab & Haryana High Court in the case of P.M.S. Diesels & Ors. Vs. Commissioner of Income Tax –2, Jalandhar & Ors., (2015) 374 ITR 562 (P&H) had rejected the claim of the assessee that the term “payable” in Section 6 Shri Satnam Singh Wadhawa Vs. DCIT, Circle-1(1) ITA No.177/RPR/2017 40(a)(ia) would mean only when the amount is payable, and not when it is actually paid. Accordingly, now when the aforesaid issue is no more res-integra pursuant to the judgment of the Hon’ble Supreme Court, therefore, no infirmity does emerge from the view taken by the lower authorities, who had rightly declined the claim of the assessee that no disallowance u/s.40(a)(ia) of the Act was to be made for the reason that the interest expenditure in question was not “payable” as on 31.03.2012. On the basis of the aforesaid deliberations, I uphold the disallowance of the assessee’s claim for deduction of interest expenditure of Rs.10,68,591/- u/s. 40(a)(ia) of the Act. 8. Apropos, the ad-hoc disallowance of Rs.1 lac out of the assessee’s claim of deduction of “Truck repair & maintenance” of Rs.30,82,813/-, I find that the same was made by the A.O, for the reason that the internal vouchers maintained by the assessee in support of his claim of expenses did neither reveal the complete name and address of the recipients nor the registration numbers of the vehicles which were claimed to have been repaired. Apart from that, it was observed by the A.O that some of the vouchers were in a mutilated condition and were beyond recognition. Although, the A.O ought to have specifically pointed out the vouchers which suffered from the aforesaid infirmities, but considering the fact that the A.O had already taken a liberal view and disallowed only an amount of 7 Shri Satnam Singh Wadhawa Vs. DCIT, Circle-1(1) ITA No.177/RPR/2017 Rs.1 lacs out of the assessee’s claim for deduction of “Truck repair & maintenance” of Rs. 30.82 lacs (approx.), therefore, I find no justifiable reason to dislodge the well reasoned observations of the lower authorities on the said issue. Accordingly, the disallowance of Rs.1 lacs made by the A.O is upheld. 9. In the result, appeal of the assessee is dismissed in terms of my aforesaid observations. Order pronounced in open court on day of 23 rd November, 2022. Sd/- (रवीश स ू द/RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायप ु र / Raipur; Ǒदनांक / Dated : 23 rd November, 2022 ***SB आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeal), Bilaspur (C.G.) 4. The Pr. CIT, Bilaspur (C.G.) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, “एक-सदèय” बɅच, रायप ु र / DR, ITAT, “SMC” Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy // Ǔनजी सͬचव /Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र/ ITAT, Raipur