Shivam Industrial Corporation, Gurgaon V. ITO, Ward-4(2), Gurgaon

ITA 4999/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5807 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 16-07-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY
• Keywords: TDS
• Section: 201; 40a(ia); 194A

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND S H R I K . N . C H A R Y , JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 4 9 9 9 / DEL / 2 0 1 8 (ASSESSMENT YEAR: 2 0 1 4 - 1 5 ) SHIVAM INDUSTRIAL CORPORATION, H. NO. 1668,SECTOR - 10A, GURGAON, HARYANA PAN: AALFS5502Q VS . ITO, HSIIDC BUILDING, UDYOG VIHAR - V, GURGAON (APPELLANT) (RESPONDENT) ASSESSEE BY : S H R I L A L I T M O H A N , C A REVENUE BY: S H R I P R A K A S H D U B E Y , S R . D R DATE OF HEARING 2 5 / 0 8 / 2021 DATE OF PRONOUNCEMENT 1 5 / 0 9 / 2021 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS APPEAL IS FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2014 - 15 AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1, GURGAON DATED 6TH MARCH 2018 RAISING FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED ASSESSING OFFICER GROSSLY ERRED TO DISALLOW RS. 77,53,340/ - ON ACCOUNT OF INTEREST ON LOAN FOR THE REASO N OF NON - DEDUCTION OF TAX AT SOURCE. THE DISALLOWANCES OF INTEREST EXPENSES OF RS. 77,53,340/ - IS UNFOUNDED, UNCALLED FOR AND IN ANY CASE EXTREMELY EXORBITANT. 2. THE FOLLOWING OBSERVATIONS/ FINDINGS OF THE LEARNED ASSESSING OFFICER ARE MISCONCEIVED AND IN CORRECT. (A) THE APPELLANT PAID INTEREST OF RS. 7426351/ - TO M/S. FUTURE CAPITAL HOLDING LTD (NBC) WITHOUT DEDUCTION OF TDS AS REQUIRED U/S 194 A OF THE INCOME TAX ACT, 1961. (B) THE ISSUE WAS CONFRONTED WITH THE AR BUT NO SATISFACTORY EXPLANATION WAS FURNI SHED ON BEHALF OF THE ASSESSEE. (C) THE INTEREST PAID WITHOUT DEDUCTION OF TDS IS DISALLOWED U/S 40A(IA) OF THE INCOME TAX ACT, 1961. 2. THE BRIEF FACTS OF THE CASE SHOWS THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF INDUSTRIAL AND GE NERAL SUPPLIES OF ENGINEERING AND OFFICE EQUIPMENT AND CONSUMABLES. IT FILED ITS RETURN OF INCOME ON 28/11/2014 DECLARING AN INCOME OF R S . 2,26,990/ - . DURING THE COURSE OF ASSESSMENT PROCEEDING IT WAS NOTED BY THE LEARNED ASSESSING OFFICER THAT ASSESSEE HAS PAID INTEREST TO M/S. FUTURE CAPITAL HOLDINGS LTD PAGE | 2 WHICH IS AN NBFC OF R S . 7,426,351/ - ON WHICH TAX SHOULD HAVE BEEN REQUIRED TO BE DEDUCTED U/S 194A OF THE ACT. THE LEARNED ASSESSING OFFICER NOTED THAT THERE IS NO EXEMPTION TO THE ABOVE RECIPIENT AND THE ASS ESSEE ALSO DID NOT EXPLAIN THE SAME, THEREFORE, THE INTEREST AMOUNTING TO R S . 7,426,351/ - PAID WITHOUT DEDUCTION OF TAX DEDUCTION AT SOURCE WAS DISALLOWED U/S 40 (A)(IA) OF THE INCOME TAX ACT. CONSEQUENTLY, THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED AT R S . 7,753,341 / - AGAIN THE RETURNED INCOME OF R S . 226,990. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) WHO ALSO DISMISS THE APPEAL OF THE ASSESSEE. THEREFORE THE ASSESSEE IS IN APPEAL BEFORE US. * 4. THE LEARNED THAT AR MR. ALIT MOHAN, CHARTERED ACCOUN TANT AND SHERI PARKAS DUBAI, SENIOR DEPARTMENTAL REPRESENTATIVE ARE HEARD ON THIS ISSUE. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. ADMITTEDLY, THE ASSESSEE HAS PAID INTEREST TO A NONBANKING FINANCIAL COMPANY FUTURE CAPITAL HOLDINGS LTD OF? 7,426,351/ - WITHOUT DEDUCTION OF TAX AT SOURCE AS REQUIRED UNDER THE PROVISIONS OF SECTION 194A OF THE INCOME TAX ACT. THIS IS THE SOLITARY ISSUE RAISED IN THIS APPEAL AS PER GROUND NUMBER 2 OF THE APPEAL. DURING TH E COURSE OF HEARING BEFORE US THE ASSESSEE HAS SUBMITTED ANNEXURE A BEING A CERTIFICATE OF ACCOUNT AND UNDER THE FIRST PROVISO TO SUBSECTION (1) OF SECTION 201 OF THE INCOME TAX ACT, 1961 FOR CERTIFYING THE FURNISHING OF RETURN OF INCOME, PAYMENT OF TAX ET CETERA BY THE PAYEE. SUCH CERTIFICATE IS DATED 21 JANUARY 2017. THE ANNEXURE A CERTIFIED BY A CHARTERED ACCOUNTANT CLEARLY SHOWS THAT THE INCOME PAID TO THE RECIPIENT OF THE INTEREST HAS ALREADY BEEN SHOWN BY IT IN ITS BOOKS OF ACCOUNT AS INCOME AND ALSO THE PAYEE HAS FURNISHED THE RETURN OF INCOME. THE ABOVE ANNEXURE A WAS NOT BEFORE THE LOWER AUTHORITIES. EVEN FORM NUMBER 26A TO WHICH THIS ANNEXURE A IS REQUIRED TO BE ATTACHED IS ALSO NOT AVAILABLE BEFORE US. NATURALLY WHEN THE ASSESSEE HAS COMPLIED WITH THE RULE 31ACB IN TERMS OF THE FIRST PROVISO TO SUBSECTION (1) OF SECTION 201 OF THE INCOME TAX ACT, 1961 THERE SHOULD NOT HAVE BEEN ANY DISALLOWANCES MADE. HOWEVER, AS THE ASSESSEE HAS NOT FILED FORM NUMBER 26A EITHER BEFORE US OR BEFORE THE LOWER AUTHOR ITIES. THEREFORE, WE SET - ASIDE THE WHOLE ISSUE BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER WITH A DIRECTION TO THE ASSESSEE TO SUBMIT FORM NO. 26A ALONG WITH THE ANNEXURE A PRESCRIBED IN TERMS OF THE PROVISIONS OF RULE 31ACB AS PROVIDED UNDER THE FIR ST PROVISO TO SUBSECTION (1) OF SECTION 201 OF THE INCOME TAX ACT 1961. IF, ON EXAMINATION THE LEARNED ASSESSING OFFICER FINDS THAT THE ASSESSEE HAS COMPLIED WITH THE ABOVE PROVISIONS OF THE LAW, THE DISALLOWANCE DESERVES TO BE DELETED. IN VIEW OF THIS, TH E GROUND NUMBER 2 OF THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PAGE | 3 6. G R O U N D N O . 1 I S G E N E R A L I N N A T U R E A N D THEREFORE , I T I S D I S M I S S E D . ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 / 0 9 / 2021 . - SD/ - - SD/ - ( K . N . C H A R Y ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 5 / 0 9 / 2021 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI