M/s. Maljibhai V. Desai, Mehsana V. The Dy.CIT, Mehsana Circle, Mehsana

ITA 3194/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6000 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 04-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P PATHAK
• Assessee Lawyers: ADITI SHETH
• Keywords: Retrospective amendment

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA NO. 3194/AHD/2014 / ASSESSMENT YEAR: 2011-12 M/S.MALJIBHAI V. DESAI 6, ASHOKNAGARSOCIETY RADHANPUR ROAD MEHSANA 384 001. PAN : AAIFM 6257 D. VS DCIT, MEHSANA CIRCLE MEHSANA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : MS.ADITI SHETH, AR REVENUE BY : SHRI O.P. PATHAK, SR.DR / DATE OF HEARING : 23/02/2018 /DATE OF PRONOUNCEMENT : 01 /03/2018 PER RAJPAL YADAV, JUDICIAL MEMBER: PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF ASSES SEE AGAINST ORDER OF LD.CIT(A), GANDHINAGAR DATED 1.10.2014 FOR THE A SSTT.YEAR 2011-12. 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 NBFC WI TH AID OF SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961. 3. WITH THE ASSISTANCE OF LD.REPRESENTATIVES, WE HA VE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECO RD THAT THE ASSESSEE PAID INTEREST TO MAHINDRA & MAHINDRA FINANCE LTD., AND SUNDRAM FINANCE AMOUNTING TO RS.3,99,000/- AND RS.9,62,850/ - RESPECTIVELY. ITA NO.3194/AHD/2014 - 2 - THESE AMOUNTS HAVE BEEN DISALLOWED TO THE ASSESSEE BY THE AO ON THE GROUND THAT IT FAILED TO DEDUCT TDS ON THE ALLEGED INTEREST PAYMENT. 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, WE ARE OF THE VIEW THAT HONBLE DELHI HIGH COURT IN THE CA SE 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, WE DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE TO THE FILE OF THE AO WITH DIRECTION THAT THE LD.AO SH ALL VERIFY FROM THE ALLEGED NON-BANKING FINANCIAL INSTITUTIONS 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 ASSESSEE IS DIRECTED TO FURN ISH COMPLETE ADDRESS OF THESE NON-BANKING FINANCIAL COMPANIES. THE LD.A O SHALL DECIDE THIS ISSUE AFTER PROVIDING 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 1 ST MARCH, 2018. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED, 01/03/2018