M/s. Q Mix Industry, CHENNAI V. ITO, CHENNAI

ITA 3047/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4499 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 17-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 28-10-2016
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHIJCIT
• Assessee Lawyers: R J AYARAMAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI ... , , # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A. NO. 3047/MDS/2016 / ASSESSMENT YEAR : 2012-13 M/S. Q MIX INDUSTRY, NO. 8, 3 RD FLOOR, VIGNESHWARA APARTMENT, 9, PERIYAR ROAD, T. NAGAR, CHENNAI 600 017. [PAN: AAAFQ 2474L] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 2(1), NUNGAMBAKKAM, CHENNAI 600 034. ( / APPELLANT) ( / RESPONDENT) % & / APPELLANT BY : SHRI R . J AYARAMAN, FCA )*% & / RESPONDENT BY : SHRI ASHISH TRIPATHI, JCIT & /DATE OF HEARING : 17.05.2017 & /DATE OF PRONOUNCEMENT : 30.05.2017 /O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, CHENNAI DAT ED 31.08.2016. :-2-: I.T.A. N0. 3047/MDS/2016 2. IN THE ASSESSMENT MADE FOR THE ASSESSMENT YEAR 2 012-13 IN M/S. Q MIX INDUSTRY, THE ASSESSEE, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS AVAILED AN UNSECURED LOAN FROM M/S. MAGMA FINCORP L TD., TOWARDS WHICH IT PAID INTEREST OF RS. 6,12,934/- WITHOUT DEDUCTING T DS. INVOKING SECTION 40(A)(IA), THE AO DISALLOWED RS. 6,12,934/-. 3. THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSI ONER OF INCOME TAX (APPEALS)-2, CHENNAI AND PLEADED, INTER ALIA, THAT M/S. MAGMA FINCORP LIMITED IS REGULARLY FILING ITS RETURN, A FINANCING COMPANY AND IT HAS TAKEN INTO ACCOUNT THE INTEREST PAID BY IT IN ITS INCOME AND PAID TAX ON SUCH SUM AND HENCE, THE ADDITION MADE BY THE OFFICER MAY BE DELETED. THE C IT(A) DISMISSED THE APPEAL. 4. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE FILE D AN APPEAL. SEEKING RELIEF, INTER ALIA ON THE GROUND THAT M/S. MAGAM FI NCORP LIMITED IS A NON- BANKING FINANCIAL COMPANY INCORPORATED UNDER COMPAN Y LAW AND REGISTERED WITH RESERVE BANK OF INDIA AS AN ASSET FINANCE COMP ANY WHICH IS ENGAGED IN THE BUSINESS OF FINANCING AND PROVIDING LOANS TO CU STOMERS. THEREFORE, THE ASSESSEE M/S. Q MIX INDUSTRY IS NOT REQUIRED TO DED UCT TAX AT SOURCE FOR THE INTEREST PAYMENT OF RS. 6,12,934/- MADE TO M/S. MAG MA FINCORP LIMITED AND HENCE THE PROVISIONS OF SECTION 40A(IA) IS NOT APPL ICABLE FOR THE ABOVE SAID :-3-: I.T.A. N0. 3047/MDS/2016 INTEREST PAYMENT. HENCE, IT IS SUBMITTED THAT ONLY SECTION 194A SHALL BE CONSIDERED. 5. BEFORE US, THE AR FILED A COPY OF THE CERTIFICAT E FROM KAMAL KHEMKA & CO. CHARTERED ACCOUNTANT, DATED 18.04.2017 CERTIFIE D BY CA, KAMAL KHEMKA, MRN: 056624 WHICH SPECIFIED, INTER ALIA, THAT THE P AYEE I.E., MAGMA FINCORP LTD24, PARK STREET, KOLKATA 700 016 WITH PAN NO. AABCM 9445K FILED ITS RETURN ON 29.03.2014 VIDE ACKNOWLEDGE NO. 154222641 290314, ADMITTING AN INCOME OF RS. 8,69,26,390/- AND THE TAX DUE ON IT I S RS. 17,90,99,574/-. M/S. MAGMA FINCORP LTD. PAID ADVANCE TAX OF RS. 27,65,00 ,000/-, TDS OF RS. 17,34,75,236/- AND THE TOTAL TAX PAID IS OF RS. 44, 99,75,236/-. THE PAYEE HAS ALSO TAKEN INTO ACCOUNT THE IMPUGNED SUM FOR ITS TA XABLE INCOME IN THE RETURN FILED BY IT ETC. BASED ON SUCH CERTIFICATE, THE AR PLEADED THAT SINCE THE PAYEE HAS ADMITTED THE IMPUGNED INTEREST AS INCOME AND PA ID THE TAXES ON SUCH INCOME, THE IMPUGNED DISALLOWANCE MADE BY THE AO AN D SUSTAINED BY THE CIT(A) BE DELETED. 6. WE HEARD THE RIVAL SUBMISSIONS. SINCE, THE PAYE E CLAIMED TO HAVE ADMITTED THE IMPUGNED INTEREST AND PAID THE TAXES, THE AO IS DIRECTED TO VERIFY SUCH CLAIM WITH DUE OPPORTUNITY TO THE ASSES SEE AND IF THE CLAIM MADE IN THIS APPEAL, SUPRA, IS FOUND CORRECT, DELETE THE ADDITION. :-4-: I.T.A. N0. 3047/MDS/2016 7. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED ON TUESDAY, THE 30 TH DAY OF MAY, 2017 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) ! ' /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) ' /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED: 30 TH MAY, 2017 JPV & )12 32 /COPY TO: 1. %/ APPELLANT 2. )*% /RESPONDENT 3. 4 ( )/CIT(A) 4. 4 /CIT 5. 2 ) /DR 6. 7 /GF