KAVYA TRAVEL PRIVATE LIMITED, CHENNAI V. ITO CORPORATE WARD 4 (4), CHENNAI

ITA 1790/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6547 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 25-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R ANITHA
• Assessee Lawyers: M KARUNAKARAN
• Keywords: Principle of natural justice; Non compliance; TDS; Set aside
• Section: 143(3); 40(a)(ia); 194C; 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI . . . , ' , ' BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ ITA NOS.1790 & 1791/CHNY/2018 ( ( /ASSESSMENT YEARS: 2013-14 & 2014-15 M/S.KAVYA TRAVEL PVT. LTD., NO.9, EZHIL NAGAR, CHURCH STREET, POONAMALLEE, CHENNAI-600 056. [PAN: AAECK 5254 D] V . THE INCOME TAX OFFICER, CORPORATE WARD-4(4), CHENNAI-34. ( + /APPELLANT) ( ,-+ /RESPONDENT) + . / APPELLANT BY : MR. M.KARUNAKARAN, ADV. ,-+ . /RESPONDENT BY : MS.R.ANITHA, JCIT . /DATE OF HEARING : 17.09.2019 . /DATE OF PRONOUNCEMENT : 22.10.2019 / O R D E R PER RAMIT KOCHAR , ACCOUNTANT MEMBER : THESE TWO APPEALS, FILED BY THE ASSESSEE, BEING IT A NOS.1790 & 1791/CHNY/2018, ARE DIRECTED AGAINST COMMON APPELL ATE ORDER DATED 15 TH MARCH, 2018 PASSED BY THE LEARNED COMMISSIONER OF I NCOME TAX (APPEALS)-8, CHENNAI (HEREINAFTER CALLED THE CIT(A )) IN ITA NO. 90 & 265/16-17, FOR ASSESSMENT YEARS(AYS) 2013-14 & 201 4-15 RESPECTIVELY, THE APPELLATE PROCEEDINGS BEFORE LEARNED CIT(A) HAD ARISEN FROM SEPARATE ASSESSMENT ORDER(S) DATED 09 TH MARCH, 2016 AND 21 ST NOVEMBER 2016 ITA NOS.1790 & 1791/CHNY/2018 :- 2 -: RESPECTIVELY PASSED BY LEARNED ASSESSING OFFICER (H EREINAFTER CALLED THE AO) U/S. 143(3) OF THE INCOME-TAX ACT,1961 (HEREIN AFTER CALLED THE ACT). 2. THE GROUNDS OF APPEAL RAISED BY ASSESSEE IN MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, CHENNAI (HEREINA FTER CALLED THE TRIBUNAL) FOR BOTH THE AYS READ AS UNDER:- IN ITA NO.1790/CHNY/2018 FOR THE AY 2013-14 : THE APPELLANT SUBMIT THE FOLLOWING GROUNDS OF APPEA L IN ADDITION TO VARIOUS OTHERS WHICH WILL BE PUT FORTH AT THE TIME OF HEARING:- 1. THE AUTHORITIES BELOW ERRED IN DISALLOWING RS.53 ,18,606/- BEING INTEREST PAID TO NON BANKING FINANCIAL INSTITUTIONS (NBF) UNDER SECTION 4 0(A)(IA) FOR WANT OF TDS. 2. THE APPELLANT SUBMITS THAT THESE NON BANKING FIN ANCIAL INSTITUTIONS ARE REPUTED COMPANIES WHO WOULD HAVE DISCHARGED THEIR TAX OBLIG ATIONS BY OFFERING THE INTEREST RECEIVED FROM THE APPELLANT AND THEREFORE THE APPEL LANT IS NOT REQUIRED TO DEDUCT TDS ON SUCH PAYMENTS IN THE LIGHT OF THE DECISION OF THE S UPREME COURT IN THE CASE OF HINDUSTAN COCO COLA AND ALSO IN VIEW OF THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT. 3. THE AUTHORITIES BELOW ERRED IN DISALLOWING RS.1, 06,20,450/- BEING PAYMENTS MADE TO OTHER TRAVELS U/S.40(A)(IA) FOR WANT OF TDS. 4. THE APPELLANT SUBMITS THAT THE OTHER TRAVELS AR E EMPLOYED WHENEVER THE APPELLANT COULD NOT HONOUR ITS COMMITMENT TO THE CUSTOMERS IN PROVI DING THE BUS AND ON SUCH EMERGENCY CIRCUMSTANCES THE OTHER TRAVELS ARE CALLED UPON TO PROVIDE THE BUS TO THE APPELLANT'S CUSTOMERS. THE APPELLANT THEREFORE SUBMITS THAT THE RE WAS NO CONTRACT AS SUCH BETWEEN THE APPELLANT AND OTHER TRAVELS AND THEREFORE THERE IS NO REQUIREMENT TO DEDUCT ANY TDS U/S.194C OF THE ACT. 5. THE ASSESSING OFFICER ERRED IN DISALLOWING RS.1 ,34,677/- BEING AUDIT FEES AND RS.67,000/- AS PROFESSIONAL FEE FOR NON DEDUCTION O F TDS. 6. THE APPELLANT SUBMITS THAT THE AUDITOR HAS PROV IDED CERTIFICATE TO SHOW THAT HE HAS ACCOUNTED FOR THE AUDIT/PROFESSIONAL FEE RECEIVED I N HIS RETURN OF INCOME AND THUS HE HAS DISCHARGED HIS TAX OBLIGATION BY OFFERING THE AUDIT FEES RECEIVED FROM THE APPELLANT. THE APPELLANT THEREFORE IS NOT REQUIRED TO DEDUCT TDS O N THE AUDIT FEES AND THE DISALLOWANCE IS LIABLE TO BE DELETED. 7. THE AUTHORITIES BELOW ERRED IN INVOKING THE PROV ISIONS OF SECTION 40(A)(IA) ON VEHICLE MAINTENANCE EXPENSES OF RS.57,84,247/-. 8. THE APPELLANT SUBMITS THAT THE VEHICLE MAINTENAN CE EXPENSES ARE NORMAL REPAIRS AND MAINTENANCE EXPENSES AND THERE ARE NO CONTRACT AS S UCH ENTERED INTO BY THE APPELLANT WITH THE PERSONS CARRYING THE REPAIRS AND THEREFORE THE PROVISIONS OF SECTION 194C HAS NO APPLICATION AND THE APPELLANT IS NOT REQUIRED TO DE DUCT ANY TDS ON SUCH VEHICLE MAINTENANCE EXPENSES. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS THEREFORE LIABLE TO BE DELETED. 9. THE APPELLANT THEREFORE PRAYS THAT THE DISALLOWA NCE MADE U/S.40(A)(IA) ON INTEREST PAID TO NBFCS (RS.53,18,606), PAYMENTS TO OTHER TRAVELS (RS.1,06,20,450), AUDITORS ITA NOS.1790 & 1791/CHNY/2018 :- 3 -: (RS.2,01,677) AND ON VEHICLE MAINTENANCE EXPENSES (R S.57,84,247) MAY BE DELETED AND RENDER JUSTICE. IN ITA NO.1791/CHNY/2018 FOR THE AY 2014-15 : THE APPELLANT SUBMIT THE FOLLOWING GROUNDS OF APPEA L IN ADDITION TO VARIOUS OTHERS WHICH WILL BE PUT FORTH AT THE TIME OF HEARING:- 1. THE AUTHORITIES BELOW ERRED IN DISALLOWING RS.5 7,64,891/- BEING INTEREST PAID TO NON BANKING FINANCIAL INSTITUTIONS (NBF) UNDER SECTION 4 0(A)(IA) FOR WANT OF TDS. 2. THE APPELLANT SUBMITS THAT THESE NON BANKING FIN ANCIAL INSTITUTIONS ARE REPUTED COMPANIES WHO WOULD HAVE DISCHARGED THEIR TAX OBLIG ATIONS BY OFFERING THE INTEREST RECEIVED FROM THE APPELLANT AND THEREFORE THE APPEL LANT IS NOT REQUIRED TO DEDUCT TDS ON SUCH PAYMENTS IN THE LIGHT OF THE DECISION OF THE S UPREME COURT IN THE CASE OF HINDUSTAN COCO COLA AND ALSO IN VIEW OF THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT. 3. THE AUTHORITIES BELOW ERRED IN DISALLOWING RS.1, 45,68,958/- BEING PAYMENTS MADE TO OTHER TRAVELS U/S.40(A)(IA) FOR WANT OF TDS. 4. THE APPELLANT SUBMITS THAT THE OTHER TRAVELS ARE EMPLOYED WHENEVER THE APPELLANT COULD NOT HONOUR ITS COMMITMENT TO THE CUSTOMERS IN PROVI DING THE BUS AND ON SUCH EMERGENCY CIRCUMSTANCES THE OTHER TRAVELS ARE CALLED UPON TO PROVIDE THE BUS TO THE APPELLANT'S CUSTOMERS. THE APPELLANT THEREFORE SUBMITS THAT THE RE WAS NO CONTRACT AS SUCH BETWEEN THE APPELLANT AND OTHER TRAVELS AND THEREFORE THERE IS NO REQUIREMENT TO DEDUCT ANY TDS U/S.194C OF THE ACT. 5. THE ASSESSING OFFICER ERRED IN DISALLOWING RS.1 ,80,000/- BEING AUDIT FEES FOR NON DEDUCTION OF TDS. 6. THE APPELLANT SUBMITS THAT THE AUDITOR HAS PROV IDED CERTIFICATE TO SHOW THAT HE HAS ACCOUNTED FOR THE AUDIT/PROFESSIONAL FEE RECEIVED I N HIS RETURN OF INCOME AND THUS HE HAS DISCHARGED HIS TAX OBLIGATION BY OFFERING THE AUDIT FEES RECEIVED FROM THE APPELLANT. THE APPELLANT THEREFORE IS NOT REQUIRED TO DEDUCT TDS O N THE AUDIT FEES AND THE DISALLOWANCE IS LIABLE TO BE DELETED. 7. THE AUTHORITIES BELOW ERRED IN INVOKING THE PRO VISIONS OF SECTION 40(A)(IA) ON VEHICLE MAINTENANCE EXPENSES OF RS.94,83,080/-. 8. THE APPELLANT SUBMITS THAT THE VEHICLE MAINTENA NCE EXPENSES ARE NORMAL REPAIRS AND MAINTENANCE EXPENSES AND THERE ARE NO CONTRACT AS S UCH ENTERED INTO BY THE APPELLANT WITH THE PERSONS CARRYING THE REPAIRS AND THEREFORE THE PROVISIONS OF SECTION 194C HAS NO APPLICATION AND THE APPELLANT IS NOT REQUIRED TO DE DUCT ANY TDS ON SUCH VEHICLE MAINTENANCE EXPENSES. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS THEREFORE LIABLE TO BE DELETED. 9. THE APPELLANT THEREFORE PRAYS THAT THE DISALLOW ANCE MADE U/S.40(A)(IA) ON INTEREST PAID TO NBFCS (RS.57,64,891), PAYMENTS TO OTHER TRAVELS (RS.1,45,68,958), AUDITORS (RS.1,80,000) AND ON VEHICLE MAINTENANCE EXPENSES (R S.94,83,080) MAY BE DELETED AND RENDER JUSTICE. 3. FIRST WE WILL TAKE UP ASSESSEES APPEAL FOR AY:2 013-14 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN BUSINESS OF TRAVEL AGENCY RUNNING AND PLYING BUSES TO VARIOUS ROUTES F OR PICKING AND DROPPING OF THEIR EMPLOYEES FOR VARIOUS ORGANIZATIO NS AND COMPANIES ON ITA NOS.1790 & 1791/CHNY/2018 :- 4 -: CONTRACT BASIS. THE ASSESSEE HAD MADE PAYMENTS TOW ARDS INTEREST TO THE TUNE OF RS 76,15,294/- DURING PREVIOUS YEAR RELEVAN T TO AY: 2013-14 TO VARIOUS FINANCIAL INSTITUTIONS AND BANKS ON VEHICLE HIRE PURCHASE LOANS AVAILED BY IT FOR CARRYING OUT ITS BUSINESS. THE T OTAL AMOUNT BORROWED TOWARDS VEHICLE HIRE PURCHASE LOANS WAS TO THE TUNE OF RS.6,09,97,869/-, AND THE ASSESSEE HAD PAID INTEREST TO THE TUNE OF R S.53,18,606/- TO VARIOUS FINANCIAL INSTITUTIONS DURING PREVIOUS YEA R RELEVANT TO AY: 2013- 14, AS DETAILED BELOW: NAME OF THE FINANCIAL INSTITUTIONS AMOUNT BORROWED CLOSING BALANCE AS ON 31.03.2013 AMOUNT OF INTEREST PAID CHOLAMANDALAM DBS FINANCE LTD. 13,73,050/- 3,94,164/- HDB FINANCE LTD. 51,30,989/- 2,25,131/- INDIA BULLS LTD. 77,72,456/- 9,02,249/- L&T FINANCE LTD. 19,13,280/- 11,27,773/- MAHINDRA FINANCE LTD. 72,68,060/- 6,50,533/- RELIANCE CAPITAL 73,50,033/- 8,56,347/- SUNDARAM FINANCE LTD. 65,41,526/- 5,00,372/- TATA FINANCE LTD. 64,23,139/- 6,62,037/- TOTAL 4,37,72,533/- 53,18,606/- THE AO OBSERVED THAT THE ASSESSEE HAS NOT DEDUCTED INCOME-TAX AT SOURCE ON THE AFORESAID INTEREST PAYMENTS U/S.194A OF THE 1961 ACT. 3.2 THE AO ALSO OBSERVED THAT THE ASSESSEE HAS MADE OTHER PAYMENTS DURING PREVIOUS YEAR RELEVANT TO AY: 2013-14 AS DET AILED HEREUNDER, AGAINST WHICH NO INCOME-TAX WAS DEDUCTED AT SOURCE UNDER CHAPTER XVII- B OF THE 1961 ACT : EXPENSES AMOUNT CLAIMED TDS NOT DEDUCTED U/S. INTEREST PAID TO FINANCIAL INSTITUTIONS 53,18,606/- 194A PAYMENT TO OTHER TRAVELS 1,06,20,450/- 194C AUDIT FEE 1,34,677/- 194J PROFESSIONAL FEE 67,000/- 194J VEHICLE MAINTENANCE EXPENSES 57,84,247/- 194C ITA NOS.1790 & 1791/CHNY/2018 :- 5 -: TOTAL 2,19,24,980/- 3.3 THE AO SHOW-CAUSED ASSESSEE AS TO WHY THE ADDIT IONS BE NOT MADE FOR NON COMPLIANCE OF PROVISIONS OF SECTION 40(A)(I A) READ WITH CHAPTER XVII-B OF THE 1961 ACT . AS PER AO, THE ASSESSEE DI D NOT FILED PROPER REPLY, WHICH LED THE AO TO INVOKE PROVISIONS OF SEC .40(A)(IA) OF THE 1961 ACT AND MADE ADDITIONS TO THE TUNE OF ` 2,19,24,980/- BY DISALLOWING EXPENSES FOR NON-DEDUCTION OF INCOME-TAX AT SOURCE UNDER RELEVANT PROVISIONS OF CHAPTER-XVIIB OF THE 1961 ACT, VIDE A SSESSMENT ORDER DATED 09.03.2016 PASSED BY THE AO U/S. 143(3) OF THE 1961 ACT. 4. AGGRIEVED BY AN ASSESSMENT FRAMED BY THE AO VIDE ASSESSMENT ORDER DATED 09.03.2016 PASSED U/S 143(3) OF THE 196 1 ACT, THE ASSESSEE FILED FIRST APPEAL WITH LEARNED CIT(A) WHO WAS PLE ASED TO GRANT RELIEF W.R.T.DISALLOWANCE MADE TOWARDS INTEREST PAYMENTS TO THE TUNE OF ` 23,94,552/- MADE BY ASSESSEE TO FIVE BANKS WHICH WA S EARLIER DISALLOWED BY THE AO FOR AY: 2014-15 , KEEPING IN VIEW EXEMPTI ON PROVIDED U/S 194A(3)(III)(A) READ WITH SECTION 40(A)(IA) OF THE 1961 ACT , WHILE REST OF THE ADDITIONS AS WERE MADE BY THE AO FOR AY: 2014-1 5 WERE CONFIRMED BY LD.CIT(A) VIDE COMMON APPELLATE ORDER DATED 15.03.2 018 PASSED BY LEARNED CIT(A). THE LEARNED CIT(A) PROVIDED RELIEF TO THE ASSESSEE FOR INTEREST PAYMENTS MADE TO BANKS FOR AY: 2014-15, AS DETAILED HEREUNDER:- INTEREST ON LOAN PAID TO DHANALAXMI BANK RS. 1,88,5 13/- INTEREST ON LOAN PAID TO ICIC1 BANK RS. 7,57,048/- INTEREST ON LOAN PAID TO ING VYSYA BANK RS. 75,189/ - ITA NOS.1790 & 1791/CHNY/2018 :- 6 -: INTEREST ON LOAN PAID TO KOTAK MAHINDRA BANK RS. 5, 19,195/- INTEREST ON LOAN PAID TO YES BANK RS. 8,54,607/- TOTAL RS. 23,94,552/- 4.2 WHILE FOR AY: 2013-14, THE ENTIRE ADDITIONS AS WERE MADE BY THE AO STOOD CONFIRMED BY LEARNED CIT(A) VIDE COMMON APPEL LATE ORDER DATED 15.03.2018 PASSED BY LEARNED CIT(A). 5. AGGRIEVED BY COMMON APPELLATE ORDER DATED 15.03. 2018 PASSED BY LEARNED CIT(A), THE ASSESSEE HAS FILED THESE TWO AP PEALS FOR AY(S): 2013- 14 AND 2014-15 RESPECTIVELY BEFORE THE TRIBUNAL. AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE PRAYED THAT ONE MORE O PPORTUNITY BE GRANTED TO THE ASSESSEE AND THE ASSESSEE WILL PRODUCE ALL R ELEVANT EVIDENCES/PRESCRIBED CERTIFICATES FROM THE AUDITORS OF THE PAYEES TO PROVE THAT ALL THESE PAYEES TO WHOM PAYMENTS UNDER VARIOU S HEADS WERE MADE BY THE ASSESSEE HAD INCLUDED AFORESAID INCOME IN T HEIR RETURN OF INCOME FILED WITH REVENUE AND PAID DUE INCOME-TAX TO THE D EPARTMENT. THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT NO DIS ALLOWANCE U/S 40(A)(IA) OF THE 1961 ACT IS WARRANTED KEEPING IN VIEW RATIO OF DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. ANSAL LAND M ARK TOWNSHIP PRIVATE LIMITED REPORTED IN (2015) 377 ITR 635(DELHI). IT W AS SUBMITTED THAT SECOND PROVISO TO SECTION 40(A)(IA) OF THE 1961 ACT WHICH WAS INSERTED BY FINANCE ACT, 2012 W.E.F. 01.04.2013 SHALL COME INTO PLAY FOR RESCUE OF THE ASSESSEE, WHICH WAS HELD TO BE RETROSPECTIVE BY HON BLE DELHI HIGH COURT W.E.F. 01.04.2005. IT WAS SUBMITTED THAT IN LIGHT O F DECISION IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE PRIVATE LIMITED V. CIT REPORTED IN (2007) 293 ITR 226(SC) , THE REVENUE CAN AT BEST RECOVER INTEREST AS PER RATIO OF ITA NOS.1790 & 1791/CHNY/2018 :- 7 -: DECISION IN THE CASE OF HINDUSTAN COCA COLA(SUPRA) AND IT WAS PRAYED THAT ISSUE MAY ACCORDINGLY BE RESTORED BACK FOR READJUDI CATION. 5.2 THE LD.DR OBJECTED TO THE GRANT OF ONE MORE OPP ORTUNITY TO THE ASSESSEE AND SUBMITTED THAT THE ASSESSEE HAS NOT F ILED EVIDENCES/CERTIFICATES AS ARE REQUIRED TO EVIDENCE THAT THESE PAYEES HAVE INCLUDED AFORESAID PAYMENTS MADE BY THE ASSESSEE TO THEM UNDER VARIOUS HEADS IN THEIR RETURN OF INCOME FILED WITH REVENUE AND PAID DUE TAXES TO THE CREDIT OF CENTRAL GOVERNMENT. 5.3 SO FAR AS THE PAYMENT MADE FOR VEHICLE MAINTENA NCE IS CONCERNED, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE PA YMENTS WERE MADE UNDER AN ORAL CONTRACT AND THERE IS NO WRITTEN CONT RACT SIGNED BY THE ASSESSEE WITH SAID PARTIES/PAYEES AND SECTION 194C OF THE 1961 ACT HAS NO APPLICABILITY TO ORAL CONTRACTS. ON THE OTHER H AND, THE LD.DR SUBMITTED THAT THESE ARE IN ANY CASE CONTRACTS AND PROVISIONS OF SECTION 194C GETS ATTRACTED AND THE ASSESSEE IS LIABLE TO DEDUCT INCO ME-TAX AT SOURCE UNDER THE PROVISIONS OF SECTION 194C OF THE 1961 ACT. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD INCLUDING CITED CASE LAWS. WE HAVE OBSERVED THAT THE ASSESSEE IS ENGAGED IN BUSINESS OF TRAVEL AGENCY RUNNING AND PL YING BUSES TO VARIOUS ROUTES FOR PICKING AND DROPPING OF THEIR EMPLOYEES FOR VARIOUS ORGANIZATIONS AND COMPANIES ON CONTRACT BASIS. WE H AVE OBSERVED THAT THE ASSESSEE HAD MADE PAYMENTS UNDER VARIOUS HEADS TO PAYEES WITHOUT DEDUCTION OF INCOME-TAX AT SOURCE WITHIN PROVISIONS OF CHAPTER XVII-B OF THE 1961 ACT, FOR PREVIOUS YEARS RELEVANT TO AYS: 2013-14 AND 2014-15. ITA NOS.1790 & 1791/CHNY/2018 :- 8 -: THE PAYMENTS WERE MADE BY ASSESSEE FOR PREVIOUS YEA R RELEVANT TO AY: 2013-14 UNDER FOLLOWING HEADS ON WHICH NO INCOME-TA X WAS DEDUCTED BY ASSESSEE WHILE MAKING PAYMENTS WITHIN CHAPTER XVII- B OF THE 1961 ACT:- EXPENSES AMOUNT CLAIMED TDS NOT DEDUCTED U/S. INTEREST PAID TO FINANCIAL INSTITUTIONS 53,18,606/- 194A PAYMENT TO OTHER TRAVELS 1,06,20,450/- 194C AUDIT FEE 1,34,677/- 194J PROFESSIONAL FEE 67,000/- 194J VEHICLE MAINTENANCE EXPENSES 57,84,247/- 194C TOTAL 2,19,24,980/- THE PROVISIONS OF SECTION 40(A)(IA) OF THE 1961 ACT WERE CLEARLY HIT ON AFORESAID PAYMENTS MADE FOR AY: 2013-14 AND THE AO HAS RIGHTLY INVOKED PROVISIONS OF SECTION 40(A)(IA) FOR MAKING DISALLOW ANCE OF EXPENSES TO THE TUNE OF ` 2,19,24,980/- , WHICH STOOD LATER CONFIRMED BY LEA RNED CIT(A). SO FAR AS AY: 2014-15 IS CONCERNED, THE LEARNED CIT (A) HAS RIGHTLY EXCLUDED INTEREST PAYMENTS MADE BY ASSESSEE TO BANK S KEEPING IN VIEW EXEMPTION PROVIDED U/S 194A(3)(III)(A) READ WITH SE CTION 40(A)(IA) OF THE 1961 ACT. THE CONTENTION OF THE ASSESSEE THAT PAYME NTS MADE FOR VEHICLE MAINTENANCE ARE NOT HIT BY SECTION 194C OF THE 1961 AS THE PAYMENTS ARE MADE UNDER ORAL CONTACT CANNOT BE ACCEPTED AS PROVI SIONS OF SECTION 194C OF THE 1961 ACT STIPULATES THAT PAYMENTS TO CONTRAC TORS/SUB-CONTRACTORS ARE COVERED BY SECTION 194C OF THE 1961 ACT . IT DI D NOT DISTINGUISH BETWEEN ORAL AND WRITTEN CONTRACTS. THE INDIAN CONT RACT ACT, 1872 ALSO RECOGNIZED ORAL AS WELL WRITTEN CONTRACT AS AN AGRE EMENTS WHICH ARE ENFORCEABLE AT LAW. THERE IS NO DISTINCTION MADE BY INDIAN CONTRACT ACT, 1872 BETWEEN ORAL AND WRITTEN CONTRACT SO FAR AS EN FORCEABILITY OF THESE CONTRACTS AT LAW IS CONCERNED. THUS, WE DONOT ACCEP T THIS CONTENTION OF THE ITA NOS.1790 & 1791/CHNY/2018 :- 9 -: ASSESSEE THAT PAYMENTS MADE FOR VEHICLE MAINTENANCE IS TO BE EXCLUDED FROM THE AMBIT OF SECTION 194C READ WITH SECTION 40 (A)(IA) OF THE 1961 ACT. THE DECISION OF ITAT, MUMBAI IN THE CASE OF IT O V GOPAL S. RAJPUT (2016) 156 ITD 827(MUM-TRIB) , IN WHICH ONE OF US BEING LD. ACCOUNTANT MEMBER WAS PART OF THE DIVISION BENCH WHO PRONOUNCE D THE AFORESAID ORDER. THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF SMT. J. RAMA V. CIT (2012) 344 ITR 608(KAR. HC) IS RELEVANT . NOW, COMING BACK , WE ARE OF THE CONSIDERED VIEW TH AT THE ISSUE OF DISALLOWANCE OF EXPENSES BY INVOKING PROVISIONS OF SECTION 40(A)(IA) READ WITH PROVISIONS OF CHAPTER XVII-B FOR BOTH THE AYS : 2013-14 AND 2014-15 NEEDS TO BE RESTORED TO THE FILE OF LD.CIT(A) FOR F RESH ADJUDICATION . THE LD.COUNSEL FOR THE ASSESSEE HAS MADE STATEMENT BEFO RE US THAT IF GIVEN ONE MORE OPPORTUNITY, THE ASSESSEE WILL PRODUCE ALL THE NECESSARY AND RELEVANT EVIDENCES/ CERTIFICATES AS REQUIRED UNDER THE STATUTE/RULES TO SUBSTANTIATE THAT THE PAYEES HAVE DULY INCLUDED THE AFORESAID AMOUNTS AS INCOME IN THEIR RETURN OF INCOME FILED WITH REVENUE AND PAID DUE TAXES TO THE CREDIT OF CENTRAL GOVERNMENT. NOW, THE ONUS IS ENTIRELY ON THE ASSESSEE TO PRODUCE ALL RELEVANT EVIDENCES/ CERTIFI CATES AS ARE REQUIRED UNDER THE LAW BEFORE LEARNED CIT(A) IN SET ASIDE PR OCEEDINGS FOR BOTH THE AYS TO JUSTIFY THAT NO ADDITIONS ARE WARRANTED IN THE CASE OF THE ASSESSEE U/S 40(A)(IA) OF THE 1961 AS THESE PAYEES HAVE INCL UDED AFORESAID AMOUNTS PAID BY THE ASSESSEE IN RETURN OF INCOME FI LED WITH REVENUE AS THEIR INCOME AND PAID DUE TAXES TO THE CREDIT OF CE NTRAL GOVERNMENT. THE LD.CIT(A) IS DIRECTED TO VERIFY THESE EVIDENCES/CER TIFICATES AND ACCORDINGLY ITA NOS.1790 & 1791/CHNY/2018 :- 10 -: ADJUDICATE THE ISSUE ON MERITS IN ACCORDANCE WITH L AW , KEEPING IN VIEW RATIO OF DECISION OF HONBLE DELHI HIGH COURT IN TH E CASE OF ANSAL LAND MARK TOWNSHIP(SUPRA) AND DECISION OF HONBLE SUPREM E COURT IN THE CASE OF HINDUSTAN COCA COLA(SUPRA). NEEDLESS TO SAY THAT THE POWERS OF THE LD.CIT(A) ARE CO-TERMINUS WITH POWERS OF THE AO. TH E ASSESSEE IS DIRECTED TO APPEAR BEFORE LD.CIT(A) AND PRODUCE ALL THE RELE VANT AND APPLICABLE EVIDENCES/ CERTIFICATES IN SUPPORT OF ITS CONTENTIO NS. NEEDLESS TO SAY THAT LEARNED CIT(A) SHALL PROVIDE PROPER AND ADEQUATE OP PORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW. OUR AFORESAID DECISION SHALL B E APPLICABLE FOR BOTH THE AYS :2013-14 AND 2014-15 RESPECTIVELY . WE ORD ER ACCORDINGLY. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE FOR AY: 2013-14 AND 2014-15 RESPECTIVELY ARE ALLOWED FOR STATISTICA L PURPOSES. ORDER PRONOUNCED ON THE 22 ND OCTOBER, 2019, IN CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ' ) ( RAMIT KOCHAR ) /ACCOUNTANT MEMBER /CHENNAI, 2 /DATED: 22 ND OCTOBER, 2019. TLN . ,'3 43 /COPY TO: 1. + /APPELLANT 4. 5 /CIT 2. ,-+ /RESPONDENT 5. 3 , /DR 3. 5 ( ) /CIT(A) 6. ( /GF