Balaji Transline Pvt. Ltd., Vadodara V. ITO, Ward-1(1)(1), Vadoadara

ITA 35/AHD/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8005 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 08-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.S. SHUKLA
• Keywords: Non-deduction of tax; TDS
• Section: 139; 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD (through web-based video conferencing platform) BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT ITA Nos. 33 & 35/Ahd/2019 Assessment Year : 2010-11 & 2011-12 Balaji Transline Pvt. Ltd., C-27, Shreeji Market, 2 nd Floor, Harni Road, Vadodara, Gujarat – 390022 PAN : AABCB 9429 J Vs. Income Tax Officer, Ward-1(1)(1), Vadodara अपीलाथ牸 अपीलाथ牸अपीलाथ牸 अपीलाथ牸/ (Appellant) 灹त् 灹त् 灹त् 灹त् यथ牸 यथ牸यथ牸 यथ牸/ (Respondent) Assessee by : Shri Ankit Chokshi, CA Revenue by : Shri S.S. Shukla, Sr DR सुनवाई सुनवाईसुनवाई सुनवाई क琉 क琉क琉 क琉 तारीख तारीखतारीख तारीख/Date of Hearing : 22/11/2021 घोषणा क琉 तारीख /Date of Pronouncement: 23/11/2021 आदेश आदेशआदेश आदेश/O R D E R The present appeals are directed at the instance of the assessee against separate orders of the learned Commissioner of Income-Tax (Appeals-1), Vadodara [“CIT(A) in short], both dated 18.12.2018, passed for Assessment Years 2010-11 and 2011-12. 2. The solitary grievance of the assessee is that the learned CIT(A) has erred in confirming the disallowance of Rs.1,78,244/- and Rs.2,00,700/- which were made by the Assessing Officer with the aid of Section 40(a)(ia) of the Income-Tax Act, 1961 (“the Act” in short) in Assessment Years 2010- 11 and 2011-12 respectively. 3. With the assistance of learned representatives, I have gone through the record carefully. The learned Counsel for the assessee submitted that the disallowance under Section 40(a)(ia) of the Act has been made by the Assessing Officer on the ground that the assessee failed to deduct the TDS SMC-ITA Nos. 33 & 35/Ahd/2019 Balaji Transline Pvt Ltd Vs. ITO For AY: 2010-11& 2011-12 2 on interest payment made to Citi Corp Finance Limited. However, during the assessment proceedings, assessee has submitted a certificate from the Chartered Accountant mentioning that the Citi Corp Finance Limited has furnished its return of income under Section 139 and has considered this interest income from the assessee in its computation of income. In other words, the recipient has recognized this interest receipt from the assessee in both the years as its income. Therefore, putting reliance upon the decision of Hon’ble Delhi High Court in the case of CIT vs. Ansal Land Mark Township (P) Ltd, rendered in ITA No.160/2015, which has thereafter been upheld by the Hon’ble Supreme Court also, it was contended that if the recipient has recognized the income in its computation of income, then no disallowance be made in the hands of the payer under Section 40(a)(ia) of the Act on account of non-deduction of taxes at source. Learned Counsel for the assessee also placed reliance upon the order of ITAT in the case of DCIT Vs. Esaote India (NS) Ltd, reported in [2018] 172 ITD 299 (Ahmd. Trib.). He placed on record copies of both these decisions on record. 4. The learned Departmental Representative, on the other hand, relied upon the orders of the Revenue Authorities. 5. We have duly considered the rival contentions and gone through the record carefully. From the perusal of both the judgments it would reveal that if the recipient has recognized the interest receipt as its income, then the payer of such interest amount, without deduction of taxes, ought not be penalized. In other words, even if the assessee failed to deduct the TDS, but the payments made by him has been recognized as income by the recipient, then the disallowance under Section 40(a)(ia) of the Act is not required to be made. The only aspect required to be made is to verify as to whether the SMC-ITA Nos. 33 & 35/Ahd/2019 Balaji Transline Pvt Ltd Vs. ITO For AY: 2010-11& 2011-12 3 recipient has recognized such payments as income or not. In the present case, according to the assessee, it has complied with all the necessary requirements by submitting a certificate from the Chartered Accountant exhibiting the fact that Citi Corp Finance Limited has recognized these receipts in its income. However, to keep abundant caution, I would observe that the learned Assessing Officer shall call for the details from the Citi Corp Finance Limited and verify these facts. The Assessing Officer shall exercise his statutory powers for calling the details instead of asking the assessee to submit the certificate again. In case he is satisfied that Citi Corp Finance Limited has recognized the interest receipts from the assessee as its income, then no disallowance under Section 40(a)(ia) of the Act is to be made. Otherwise, the Assessing Officer is at liberty to re-adjudicate this issue in accordance with law. 6. In the result, both these appeals are allowed for statistical purposes. Order pronounced in the Court on 23 rd November, 2021 at Ahmedabad. Sd/- (RAJPAL YADAV) VICE PRESIDENT Ahmedabad; Dated 23/11/2021 *Bt आदेश आदेशआदेश आदेश क琉 क琉क琉 क琉 灹ितिलिप 灹ितिलिप灹ितिलिप 灹ितिलिप अ灡ेिषत अ灡ेिषतअ灡ेिषत अ灡ेिषत/Copy of the Order forwarded to : 1. अपीलाथ牸 / The Appellant 2. 灹瀄यथ牸 / The Respondent. 3. संबंिधत आयकर आयु猴 / Concerned CIT 4. आयकर आयु猴(अपील) / The CIT(A) 5. िवभागीय 灹ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड榁 फाईल / Guard file. आ आआ आदेशानुसार देशानुसारदेशानुसार देशानुसार/BY ORDER, TRUE COPY उप उपउप उप/सहायक सहायकसहायक सहायक पंजीकार पंजीकारपंजीकार पंजीकार (Dy./Asstt. Registrar) आयकर आयकरआयकर आयकर अपीलीय अपीलीयअपीलीय अपीलीय अिधकरण अिधकरणअिधकरण अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद / ITAT, Ahmedabad SMC-ITA Nos. 33 & 35/Ahd/2019 Balaji Transline Pvt Ltd Vs. ITO For AY: 2010-11& 2011-12 4 1. Date of dictation- .....22.11.2021.......... 2. Date on which the typed draft is placed before the Dictating Member ....22.11.2021..... Other member ................... 3. Date on which the approved draft comes to the Sr.P.S./P.S. - ........... 4. Date on which the fair order is placed before the Dictating Member for Pronouncement ... 5. Date on which the file goes to the Bench Clerk..................... 6. Date on which the file goes to the Head Clerk...................................... 7. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 8. Date of Despatch of the Order..................