Jonson Tapes Ltd., New Delhi V. ITO, Ward- 13(4), New Delhi

ITA 4683/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3333 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 20-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Retrospective amendment; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO. 4 683 /DEL/201 7 [A.Y. 20 1 2 - 1 3 ] JONSON TAPES LTD VS. THE I . T . O 1809, BHAGIRATH PLACE WARD 13(4) CHANDI CHOWK. NEW DELHI NEW DELHI PAN : AABCJ 9215 E [ ASSESSEE ] [RESPONDENT] DATE OF HEARING : 2 2 . 0 2 .201 8 DATE OF PRONOUNCEMENT : 09. 0 3 .201 8 ASSESSEE B Y : NONE REVENUE BY : SHRI V.K. JIWANI , SR. DR ORDER THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF LD. CIT(A) - 5, DELHI VIDE ORDER DATED 11.01.2017 FOR THE ASSESSMENT YEAR 2012 - 13. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. BECAUSE THE ACTION IS UNDER CHALLENGE ON FACTS AND LAW SINCE THE FINDINGS RECORDED QUA APPEAL DISMISSAL IS IN VIOLATION TO THE PRINCIPLES OF NATURAL AND SUBSTANTIAL JUSTICE FOR A DECISION IN ACCORDANCE WITH LAW. 2 ITA NO. 4683 /DEL/201 7 2. BE CAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW, FOR DISALLOWANCE OF INTEREST PAYMENT OF RS.21,47,540/ - U/S 40(A)(IA) AS THE ASSESSEE FAILED TO COMPLY THE PROVISIONS OF SECTION 194A. 3. BECAUSE THE ACTION IS BEING CHALLENGE ON THE FACTS AND LAW, FOR DISALLOWING PROFESSIONAL CHARGES OF RS.1,20,936/ - U/S 40(A)(IA) AS THE ASSESSEE FAILED TO COMPLY THE PROVISIONS OF SECTION 194J. 3. AS REGARDS GROUND NO.2 THE BRIEF FACTS OF THE CASE AS REPRODUCED IN LD. CIT(A)S ORDER AS FOLLOWS. 4. GROUND NO.2 CHALL ENGES THE INTEREST OF PAYMENT ON SECURED LOANS U/S 40(A)(IA). ACCORDING TO THE AO, DURING SCRUTINY PROCEEDINGS, IT WAS FOUND THAT THE MAIN ISSUE INVOLVED IN THIS CASE WAS APPLICABILITY OF SECTION 40(A)(IA) OF I.T. ACT, 1961. THE AR OF ASSESSEE WAS ASKED TO PRODUCE DETAILS AND SUPPORTING EVIDENCE OF SECURED LOANS. IT WAS FOUND THAT THE ASSESSEE HAS TAKEN LOAN FROM M/S. FUTURE MONEY OF TOTAL AMOUNT OF RS.1,48,37,245/ - . WHEN ASKED TO FURNISH DETAIL OF TDS DEDUCTED ON INTEREST PAYMENT TO M/S. FUTURE MONEY, 3 ITA NO. 4683 /DEL/201 7 WHICH IS A NON BANKING COMPANY, THE AR WAS NOT IN A POSITION TO PRODUCE THE CHALLAN FOR PAYMENT OF TAX DEDUCTED ON PAYMENT OF INTEREST TO M/S. FUTURE MONEY WHICH HAS BEEN SHOWN AS PAYABLE IN OTHER CURRENT LIABILITIES. THEREFORE, THE AMOUNT OF RS.21,47,540 / - BEING INTEREST PAID ON LOAN WAS NOT ALLOWABLE AS EXPENSE IN THE HANDS OF ASSESSEE ON ACCOUNT OF INTEREST PAID TO M/S. FUTURE MONEY WITHOUT TAX DEDUCTION AT SOURCE, AS PER THE PROVISION OF SECTION 40(A)(IA) OF THE INCOME TAX ACT. ACCORDINGLY THE SAME WA S DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 5. THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO. 6. I HAVE HEARD THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. NO ONE APPEARED ON BEHALF OF THE ASSESSEE AND THE ASSESSEE THROUGH HIS AUTHORIZED REPRESENTATIVE HAS FILED THE WRITTEN SUBMISSIONS WHICH HAS BEEN TAKEN ON RECORD. ON PERUSAL OF THE SAME AND THE RECORD OF THE ASSESSEE AND ARGUMENTS OF THE LD. DR, I FIND THAT THE ASSESSEE HAS MADE PAYMENT OF RS.21,47,540/ - TO M/S. CAPITAL FIRS T LIMITED A NON 4 ITA NO. 4683 /DEL/201 7 BANKING FINANCIAL CORPORATION (NBFC) ON ACCOUNT OF INTEREST ON BORROWED LOAN THE DETAILS OF INTEREST ALONG WITH THE CONFIRMATION FROM THE PAYEE THAT THEY HAVE PAID THE TAXES ON THE AMOUNT RECEIVED FROM THE ASSESSEE WAS PLACED ON RECORD. TH EREFORE IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS ANSAL LAND MARK TOWNSHIP (P) LTD. IN ITA NO.160/2015 VIDE ORDER DATED 26.08.2015 , NO DISALLOWANCE U/S 40(A)(IA) CAN BE MADE WHERE IT HAS BEEN HELD THAT SECOND PROVISO TO SECT ION 40(A)(IA) OF THE ACT IS DECLARATORY & CURATIVE & HAS RETROSPECTIVE EFFECT FROM 1 ST APRIL, 2005. IN THE CIRCUMSTANCES AND FACTS OF THE CASE THE DISALLOWANCE SO MADE U/S 40(A)(IA) AND CONFIRMED BY THE LD. CIT(A) IS DIRECTED TO BE DELETED. THUS GROUND N O.2 OF THE ASSESSEE IS ALLOWED. 7. AS REGARDS GROUND NO.3, THE AO MADE A DISALLOWANCE OF RS.4,45,396/ - ON ACCOUNT OF PROFESSIONAL CHARGES U/S 40(A)(IA) OF THE ACT WHICH WAS CONFIRMED BY THE LD. CIT(A). 8. I HAVE HEARD THE LD. DR AND FIND THAT THE LD. CIT (A) HAS ADMITTED IN PARA 3.4.1 THAT THERE IS NO DISPUTE THAT THE 5 ITA NO. 4683 /DEL/201 7 ASSESSEE HAS INCURRED PROFESSIONAL CHARGES. THE ASSESSEE HAS FILED THE DETAILS IS NOT UNDER DISPUTE. UNDER SUCH CIRCUMSTANCES AND FACTS OF THE CASE WHEN THERE IS NO DISPUTE TO THE RECIPIENT OF THE INCOME OF THE SAID AMOUNT, NO DISALLOWANCE U/S 40(A)(IA) CAN BE MADE AND DISALLOWANCE SO MADE IS DIRECTED TO BE DELETED. THUS GROUND NO.3 OF THE ASSESSEE IS ALLOWED. 9. AS REGARDS GROUND NO.1, NO SUBMISSIONS WERE MADE ON ACCOUNT OF VIOLATION OF P RINCIPLES OF NATURAL JUSTICE AND ACCORDINGLY THE SAME IS DISMISSED. 10. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO.4683/DEL/2017 IS PARTLY ALLOWED. THE ORDER IS PRO NOUNCED IN THE OPEN COURT ON 09 . 0 3 .201 8 . SD/ - [B.P. JAIN] ACCOUNTANT MEMBER DATED: 09 TH MARCH, 2018 VL/ 6 ITA NO. 4683 /DEL/201 7 COPY FORWARDED TO: 1 . ASSESSEE 2 . RESPONDENT 3 . CIT ASSISTANT REGISTRAR 4 . CIT(A) ITAT, NEW DELHI 5 . DR