EMAK GLASS FIBRE & ACCESSORIES PVT LTD, CHENNAI V. ITO,Corporate Ward, Chennai

ITA 52/CHNY/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 4290 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 08-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 143(3); 40(a)(ia); 139(1)

Judgement Text

आयकर अपीलीय अिधकरण ’डी ’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI माननीय ,ी वी. द ु गा2 राव, ाियक सद4 एवं माननीय ,ी मनोज कु मार अ9वाल ,लेखा सद4 के सम;। BEFORE HON’BLE SHRI V. DURGA RAO, JUDICIAL MEMBER AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.52/Chny/2021 (िनधा2रणवष2 / Assessment Year: 2014-15) Emak Glass Fibre & Accessories Pvt. Ltd. 11, Casa Major Road, Chennai – 600 008. बनाम/ V s . ITO Corporate Ward-2(1), Chennai. थायीलेखासं. /जीआइआरसं. /P AN / G I R N o . AAAC E - 6 4 9 3 - N (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri N. Arjunraj (CA) for Shri. S. Sridhar (Advocate) – Ld. ARs थ कीओरसे/Respondent by : Shri D. Hema Bhupal (JCIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 22-09-2022 घोषणाकीतारीख /Date of Pronouncement : 22-09-2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2014-15 arises out of the order of learned Commissioner of Income Tax (Appeals)-6, Chennai [CIT(A)] dated 30.01.2020 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 27.12.2017. The grievance of the assessee is two-folds i.e., (i) Disallowance of expenses; (ii) Disallowance u/s 40(a)(ia). ITA No.52/Chny/2021 - 2 - 2. The Registry has noted delay of 316 days in the appeal, the condonation of which has been sought by Ld. AR. Considering the fact that the stipulated time limit as available to assessee to file the appeal fall during lockdown situation arising out of Covid-19 Pandemic, we condone the delay and admit the appeal for adjudication on merits. Having heard rival submissions, the appeal is disposed-off as under. The assessee being resident corporate assessee is stated to be engaged in the business of glass. 3. The assessee claimed various expenditure towards travelling, repair etc. which were not fully vouched. Accordingly, Ld. AO made disallowance of Rs.3.30 Lacs. The assessee paid interest to certain NBFC for Rs.10.89 Lacs. The same was disallowed u/s 40(a)(ia) for want of TDS u/s 194A. 4. The Ld. CIT(A) confirmed the disallowance of expenditure. The disallowance u/s 40(a)(ia) was also confirmed since the payees filed their return of income during November, 2015 whereas the assessee filed return of income on 29.09.2015. As per second proviso to Sec.40(a)(ia), the date of filing of return of income by the payee shall be considered as the date of deduction and payment of tax. Since the deduction of tax is post the filing of return of income by the assessee, the deduction of the expenses should be allowed in the subsequent year. Aggrieved, the assessee is in further appeal before us. 5. So far as the disallowance of expenses is concerned, we find that the assessee is a corporate entity and its accounts are subjected to audit. Therefore, full disallowance of expenses is not justified. We direct Ld. AO to restrict the disallowance to the extent of 20% of impugned expenditure. This ground stand partly allowed. ITA No.52/Chny/2021 - 3 - 6. So far as the disallowance u/s 40(a)(ia) is concerned, it is undisputed fact that the payees have included this income in their respective return of income and paid due taxes. In such a case, in terms of proviso to sub-section (1) of Section 201, the assessee shall not be deemed to be assessee-in-default. As per second proviso to Sec.40(a)(ia), it shall be deemed that the assessee has deducted and paid tax on such sum on the date of furnishing of return of income by the payee. The payees have filed return of income u/s 139(1) and accordingly, it shall be deemed that the TDS has been paid u/s 139(1). Therefore, this disallowance is not sustainable in law. We order so. 7. The appeal stands partly allowed. Order pronounced on 22 nd September, 2022. Sd/- (V. DURGA RAO) ाियकसद4 /JUDICIAL MEMBER Sd/- (MANOJ KUMAR AGGARWAL) लेखासद4 /ACCOUNTANT MEMBER चे)ई/ Chennai; िदनांक/ Dated : 22-09-2022 JPV आदेशकीVितिलिपअ9ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकरआयु (अपील)/CIT(A)4. आयकरआयु /CIT 5. िवभागीय ितिनिध/DR6. गाड फाईल/GF