Banwari Aromas Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 6100/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 3812 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 29-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MITHUN SETHI
• Keywords: TDS
• Section: 40(a)(ia); 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A NO.6100/DEL/2016 ASSESSMENT YEAR: 2012-13 BANWARI AROMAS PVT. LTD., G-6, ALLIED HOUSE, INDERLOK, DELHI-35 VS. ITO, WARD-4(2), DELHI. TAN/PAN: AAACB 4585G (APPELLANT) (RESPONDENT) APPELLANT BY: MS. RANO JAIN, ADV., SHRI PRANSHU SINGHAL, CA & MS. MANSHI JAIN, CA RESPONDENT BY: SHRI MITHUN SETHI, SR.D.R. DATE OF HEARING: 14 08 2019 DATE OF PRONOUNCEMENT: 14 08 2019 O R D E R PER AMIT SHUKLA, JM THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 21.09.2016 PASSED BY COMMISSIONER OF INCOME TAX (APPEALS)-XXXV, NEW DELH I FOR THE QUANTUM OF ASSESSMENT PASSED U/S.143(3) FOR THE ASSESSMENT YEAR 2012-13. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE MADE U/S.4 0(A)(IA). 2. THE ASSESSEE HAS TAKEN LOAN FROM INDIABULLS FINA NCIAL SERVICES LTD. ON WHICH IT HAS PAID INTEREST AMOUNTI NG TO RS.20,90,804/-. HOWEVER, NO TDS WAS DEDUCTED BY THE ASSESSEE-COMPANY. IN RESPONSE TO THE SHOW CAUSE NOT ICE BY THE ASSESSING OFFICER, THE ASSESSEE SUBMITTED THAT IT WAS NOT I.T.A. NO.6100/DEL/2016 2 REQUIRED TO DEDUCT TDS ON PAYMENT OF INTEREST TO IN DIABULLS FINANCIAL SERVICES LTD. AS IT IS PUBLIC FINANCIAL I NSTITUTION AND IN TERMS OF SECTION 194A, NO TDS WAS REQUIRED TO BE DEDUCTED ON SUCH PAYMENTS. HOWEVER, THE ASSESSING OFFICER AF TER DETAILED DISCUSSION HELD THAT ASSESSEE WAS REQUIRED TO DEDUCT TDS U/S.194A AND ACCORDINGLY MADE THE DISALLOWANCE OF INTEREST U/S.40(A)(IA) WHICH HAS ALSO BEEN CONFIRME D BY THE LD. CIT(A). 3. LD. COUNSEL FOR THE ASSESSEE, MS. RANO JAIN PRAY ED THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF T HE ASSESSING OFFICER TO EXAMINE WHETHER THE PAYEE HAS OFFERED TH IS INTEREST INCOME AS ITS INCOME AND PAY TAX THEREON. THE DISAL LOWANCE SHOULD BE EXEMPTED IN VIEW OF 2 ND PROVISO TO SECTION 40(A)(IA) READ WITH 1 ST PROVISO TO SECTION 201(1). IN SUPPORT, SHE ALSO RELIED UPON THE DECISION OF HONBLE GUJARAT HIGH COU RT IN THE CASE OF PCIT VS. M/S. ARVIND LIFESTYLE BRANDS LTD, (2019) 8 TMI 570 (GUJ.). 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 5. AFTER CONSIDERING THE AFORESAID SUBMISSIONS AND WITHOUT GOING INTO THE MERITS OF THE CASE, WHETHER PAYMENT OF INTEREST TO M/S. INDIABULLS FINANCIAL SERVICES LTD. ENTAILS DEDUCTION U/S.194A OR NOT, WE FEEL THAT THE DISALLOWANCE SHOU LD BE EXAMINED IN VIEW OF SECOND PROVISO TO SECTION 40(A) (IA) AND I.T.A. NO.6100/DEL/2016 3 FIRST PROVISO TO SECTION 201(1) WHICH PROVIDES THAT WHERE ASSESSEE HAS FAILED TO DEDUCT TDS, BUT HE IS NOT DE EMED TO BE ASSESSEE IN DEFAULT UNDER 1 ST PROVISO TO SECTION 201(1); THEN, IT SHALL BE DEEMED THAT ASSESSEE HAD DEDUCTED AND P AID THE SAME ON SUCH SUM. ACCORDINGLY, WE ARE RESTORING THI S ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO SHALL EXAMINE WHETHER THE PAYEE HAS SHOWN THIS PAYMENT IN ITS ACCOUNT FOR COMPUTING THE INCOME IN THE RETURN OF INCOME AND AL SO PAID TAX ON SUCH INCOME. THE ASSESSEE SHALL FURNISH ALL THE REQUISITE DETAILS AND CERTIFICATE BEFORE THE ASSESS ING OFFICER. ACCORDINGLY, THIS ISSUE IS REMANDED BACK TO THE FIL E OF THE ASSESSING OFFICER TO DECIDE IN THE LIGHT OF THE AFO RESAID DIRECTIONS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST, 2019. SD/- SD/- [T.S. KAPOOR] [AMIT SHUKLA] [ACCOUNTANT MEMBER] JUDICIAL MEMBER DATED: 14 TH AUGUST, 2019 PKK: