M/s. Ratilal Virjibhai & Company, Sangli V. ITO, Sangli

ITA 210/PUN/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3317 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 05-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY DAMLE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, PUNE SINGLE MEMBER CASE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER I.T.A. NO.210/PN/2010: A.Y. 2006-07 M/S. RATILAL VIRJIBHAI & CO. D-2 TRADERS COMPLEX MARKET YARD, SANGLI PAN AADFR 2885 F APPELLANT VS. I.T.O. WARD 1(2) PUNE RESPONDENT APPELLANT BY : NONE RESPONDENT BY: SHRI ABHAY DAMLE ORDER THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) KOLHAPUR DATED 26-11-2009 ON TH E GROUND THAT THE CIT(A) HAS ERRED IN CONFIRMING THE DISALLO WANCE U/S 40(A)(IA) OF THE ACT. 2. THE A.O FOUND THAT INTEREST OF RS. 3,04,659/- O N BORROWINGS WAS PAID TO NEMINATH NAGARI SAHAKARI PAT SANSTHA (RS. 2,45,505/-) AND VYANKATESH NAGARI SAHA KARI PAT SANSTHA (RS. 59,154/-). IT WAS ALSO FOUND THAT NO TDS WAS MADE U/S 194A ON THESE INTEREST PAYMENTS. THE A.O I NVOKING THE PROVISIONS OF SECTION 40(A)(IA) DISALLOWED THE INTEREST PAYMENT OF RS. 3,04,659/-, WHICH WAS CONFIRMED BY T HE CIT(A). THE SAME IS OPPOSED BEFORE THE TRIBUNAL. ITA NO. 210/PN/2010 RATILAL VIRJIBHAI & CO. A.Y. 2006-07 , 2 3. HAVING CONSIDERED THE SUBMISSIONS OF THE LEARNED DR AND GOING THROUGH THE MATERIAL ON RECORD, I FIND TH AT THE ISSUE RAISED IN THIS APPEAL IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF JAIPUR VIDYUT VITRAN NIGAM LTD. VS. DY. CIT IN (2009) 26 DTR 79 (JPR) WHEREIN IT HAS BEEN HELD THA T THE PROVISIONS OF DEDUCTION OF TAX AT SOURCE DOES NOT A PPLY ON ACTUAL REIMBURSEMENT, THEREFORE, THERE IS NO LIABIL ITY TO DEDUCT TAX AT SOURCE ON PAYMENT OF TRANSMISSION/WHEELING/S LDC CHARGES U/S 194-J OR FOR THAT MATTER U/S 194-C. IT WAS HELD FURTHER THAT SECTION 40(A)(IA) APPLIES ONLY WHEN TH E AMOUNT IS PAYABLE AND NOT WHETHER THE EXPENDITURE IS PAID. T HE WORD PAYABLE IS NOT DEFINED BUT THE WORD PAID IS DEF INED IN SECTION 43(2) TO MEAN ACTUALLY PAID OR INCURRED. H ENCE BY IMPLICATION THE WORD PAYABLE DOES NOT INCLUDE PA ID. 4. SO, FOLLOWING THE AFORESAID DECISION OF JAIPUR B ENCH OF THE TRIBUNAL IN THE CASE OF JAIPUR VIDYUT VITRAN NI GAM LTD. VS. DY. CIT (SUPRA), THE DISALLOWANCE MADE BY THE A UTHORITIES BELOW U/S 40(A)(IA) IS DIRECTED TO BE DELETED. 5. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER 2010. SD/- (SHAILENDRAKUMAR YADAV) JUDICIAL MEMBER PUNE,DATED THE 21 ST SEPTEMBER 2010 ANKAM ITA NO. 210/PN/2010 RATILAL VIRJIBHAI & CO. A.Y. 2006-07 , 3 COPY FORWARDED TO: (1) ASSESSEE (2) DEPARTMENT (3) CIT- KOLHAPUR (4) CIT(A)- KOLHAPUR (5) THE D.R. ITAT PUNE, PUNE TRUE COPY BY ORDER, ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, PUNE BENCHES, PUNE