KARWAT STEEL TRADERS, MUMBAI V. ITO 13(3)(4), MUMBAI

ITA 6822/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4287 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K S CHOKSI
• Keywords: Non-deduction of tax
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 6822/MUM/2011 ASSESSMENT YEAR : 2008-09 KARWAT STEEL TRADERS 410, GIRIRAJ, 73 SANT TUKARAMROAD, IRON MARKET MUMBAI-400 009. PAN NO.AAEFK 2295 B VS. INCOME TAX OFFICER 13(3)(4) MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.S. CHOKSI REVENUE BY : SHRI MANOJ KUMAR DATE OF HEAR ING : 26.06.2013 DATE OF PRONOUNCEMENT : 10 .07.2013 O R D E R PER B. RAMAKOTAIAH, AM: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A)-24, MUMBAI DATED 18.7.2011. ASSESSEE HAS RAISED THE FOL LOWING GROUNDS :- 1.A) THE LD. CIT(A) HAS ERRED IN PASSING AN ORDER BY NOT ALLOWING INTEREST PAID TO VARIOUS PARTIES AMOUNTING TO RS.53 0425/- U/S. 40(A)(IA) ON THE GROUND THAT FILING OF NON-DEDUCTIO N FORMS UNDER RULE 29C BELATEDLY WITHOUT CONSIDERING THE FACTS THAT TH E FORMS HAVE BEEN FILED TO THE STATUTORY AUTHORITIES. B) THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE FORMS HAS BEEN FILED TO THE CORRECT AUTHORITY BASED ON THE RECEIPT ISSUED BY THEM AND HAS MADE A WRONG PRESUMPTION WITHOUT ANY EVIDENCE T HAT THE FORMS HAVE BEEN OBTAINED LATER ON AND FILED. ITA NO.6822/MUM/11 A.Y.08-09 KARWAT STEEL TRADERS 2 C) THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT LAT E FILING IS MERELY A PROCEDURAL DELAY AND HAS BEEN ACCEPTED IN THE PRE CEDING YEAR BY CIT(A). 2. BRIEFLY STATED, AO NOTICED THAT THE ASSESSEE CLA IMED AN AMOUNT OF RS.5,30,425/- AS DEDUCTION ON ACCOUNT OF INTEREST E XPENDITURE. AO ASKED THE ASSESSEE TO EXPLAIN WHY THE SAID EXPENDITURE SH OULD NOT BE DISALLOWED U/S. 40(A)(IA) ON FAILURE TO DEDUCT TAX AT SOURCE. WHILE FURNISHING THE DETAILS THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD TAKEN LOANS FROM VARIOUS PARTIES IN THE BUSINESS OF TRADING IN IRON & STEEL AND THOSE PARTIES WERE PAID INTEREST ON REGUL AR BASIS AND TDS WAS ALSO DEDUCTED ON INTEREST PAID TO THEM EXCEPT IN 17 PARTIES FROM WHOM FORM-15G /15H WERE RECEIVED. THE DETAILS WERE FURNI SHED AS UNDER :- S.NO. NAME OF THE PARTY INTEREST ( RS.) 1. AARTIBEN GHIYA 22,876 2. ARCHNA DARIA 22,876 3. ASHOK GHIYA 22,876 4. BISHAN S. AGARWAL (HUF) 48,667 5. DEVYANI SANGHVI 44,144 6. DHIRAJLAL KOTHARI 14,083 7. HANSA SANGHAVI 18,250 8. ILA A. SHAH 36,500 9. KALAWATI MAVJI SHAH 36,500 10. KARUBHA JADEJA 48,667 11. MANSUKHLAL S. SHAH(HUF) 48,667 12. MEENA PALAV VALIA 23,567 13. MIRA MEHTA 23,999 14. PRAKASH A, AGARWAL (HUF) 24,334 15. RASILA INDULAL MODI 22,876 16. RUPA NAISAD MODI 48, 667 17. SHANTI NANJI SAVLA 48,667 TOTAL 5,30,425 ITA NO.6822/MUM/11 A.Y.08-09 KARWAT STEEL TRADERS 3 2.1 ON THE REASON THAT THE ASSESSEE HAS NOT FILED F ORM 15H/15G TO THE CIT AS PRESCRIBED U/R. 29C, AO INVOKED PROVISI ONS OF SECTION40(A)(IA) AND DISALLOWED ENTIRE AMOUNT OF RS.5,30,429/-. 3. THE MATTER WAS CONTESTED BEFORE THE CIT(A) THAT DISALLOWANCE U/S. 40(A)(IA) IS ENTIRELY DIFFERENT AND THOSE PROVISION S CAN NOT BE INVOKED FOR NOT FILING THE FORMS BEFORE CIT AS PRESCRIBED. IT W AS FURTHER SUBMITTED THAT MERE TECHNICAL FAILURE CAN NOT LEAD TO DISALLO WANCE, WHEN THE ASSESSEE HAD TAKEN RELEVANT FORMS FROM VARIOUS PERS ONS. INCIDENTALLY, IT WAS POINTED OUT THAT THE ASSESSEE WAS NOT AWARE ABO UT THE CORRECT JURISDICTION WITH WHOM THOSE FORMS WERE TO BE FILED . THE LD. CIT(A) HOWEVER REJECTED THE CLAIMS AND UPHELD THE DISALLOW ANCE. 4. THE LD. COUNSEL REITERATED THE SUBMISSIONS MA DE BEFORE THE LD. CIT(A) AND FURTHER POINTED OUT THAT THE ASSESSEE HA S ASKED THE DEPARTMENT ABOUT THE JURISDICTION OF CIT TO WHOM TH E FORMS ARE TO BE CORRECTLY FILED AND REPLY IS STILL AWAITED. HE SUBM ITTED THAT NON- SUBMISSION OF FORM-15H DOES NOT LEAD TO DISALLOWANC E UNDER SECTION 40(A)(IA). HE RELIED ON VARIOUS CASE LAWS. 1) VIPIN P. MEHTA VS. INCOME TAX OFFICER (2011) 11 TA XMANN.COM 342(MUM). 2) CIT VS. LARSEN & TOUBRO LTD. (2009) 181 TAXMANN 71 (SC); 3) VALIBHAI KHANDELAL MANKAD VS. DCIT (OSD) (2011) 12 TAXMANN.COM 160 (AHD.); 4) SHRAM RESOURCES PVT. LTD. VS. ITO (ITA NO.5393/MUM /2010 (AY: 2006-07) DT. 28.03.2012; 5) VIJAY HEMANT FINANCE & ESTATE LTD. VS. INCOME TAX OFFICER (1999) 105 TAXMANN 519 (MAD.); 6) CIT VS. STATE BANK OF PATIALA (2005) 277 ITR 315 ( P & H); 7) ESCORTS EMPLOYEES ANCILLARIES LTD. VS. CIT (2000) 74 ITD 1(DEL.); 8) SUDERSHAN AUTO & GENERAL FINANCE VS. CIT (1997) 60 ITD 177(DEL.); AND 9) GOBINDER SINGH, JIWAN SINGH VS. INCOME TAX OFFICER (2006) 154 TAXMANN 159 (CHD.)(MAG.) ITA NO.6822/MUM/11 A.Y.08-09 KARWAT STEEL TRADERS 4 3.1 THE LD. DR HOWEVER SUBMITTED THAT BY NOT FILING THE DECLARATIONS IN TIME, THE ASSESSEE HAS COMMITTED DEFAULT. THEREFORE DISALLOWANCE U/S. 40(A)(IA) IS WARRANTED. 4. WE HAVE CONSIDERED THE ISSUE. THE PROVISIONS OF SECTION 40(A)(IA) ARE AS UNDER :- 40. AMOUNTS NOT DEDUCTIBLE NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTION S 30 TO 38, THE FOLLOWING AMOUNTS SHALL NOT BE DEDUCTED IN COMPUTIN G THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUS INESS OR PROFESSION,- (A) IN THE CASE OF ANY ASSESSEE (I). (IA) ANY INTEREST, COMMISSION OR BROKERAGE, [RENT, ROYALTY,] FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB -CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDING SUPP LY OF LABOUR FOR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDU CTED OR, AFTER DEDUCTION, [HAS NOT BEEN PAID, ( REST NOT EXTRACTED.) ( EMPHASIS SUPPLIED) 4.1 AS CAN BE SEEN FROM ABOVE PROVISION, THE AMOUNT CAN NOT BE ALLOWED AS DEDUCTION ONLY IN THE EVENT WHEN TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER-XVII-B AND SUCH TAX HAS NOT BEEN DEDU CTED OR, AFTER DEDUCTION HAS NOT BEEN PAID. IN THIS CASE, THE ASSE SSEE WAS TO DEDUCT TAX UNDER PROVISIONS OF SECTION 194A. SECTION 194A IS F URTHER QUALIFIED BY THE PROVISIONS OF SECTION 197A(1A) WHEREIN IF A PERSON FURNISHES A DECLARATION IN WRITING IN PRESCRIBED FORM AND VERIF IED IN THE PRESCRIBED MANNER TO THE EFFECT THAT TAX ON HIS ESTIMATED TOTA L INCOME IS TO BE INCLUDED IN COMPUTING HIS TOTAL INCOME WILL BE NIL, THERE IS NO NEED TO DEDUCT TAX THE ASSESSEE HAS RECEIVED SUCH FORMS AS PRESCRIBED FROM THOSE PERSONS TO WHOM INTEREST WAS PAID/BEING PAID AND ACCORDINGLY NO ITA NO.6822/MUM/11 A.Y.08-09 KARWAT STEEL TRADERS 5 DEDUCTION OF TAX WAS TO BE MADE IN SUCH CASES. THE DEFAULT FOR NON- FURNISHING OF THE DECLARATIONS TO THE CIT AS PRESC RIBED MAY RESULT IN INVOKING PENALTY PROVISIONS U/S. 272A(2)(F), FOR W HICH SEPARATE PROVISION/ PROCEDURE WAS PRESCRIBED UNDER THE ACT. HOWEVER, ONCE FORM 15G/FORM 15H WAS RECEIVED BY THE PERSON RESPONSIBLE FOR DEDUCTING TAX, THERE IS NO LIABILITY TO DEDUCT TAX. ONCE THERE IS NO LIABILITY TO DEDUCT TAX, IT CAN NOT BE CONSIDERED THAT TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AS PRESCRIBED U/S. 40(A)(IA). THE PROVISIONS OF SECTION 40(A)(IA) CAN ONLY BE INVOKED IN A CASE WHERE TAX IS DEDUCTIBLE A T SOURCE AND SUCH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTION HAS NOT BE EN PAID. NO SUCH DEFAULT OCCURRED IN THIS CASE. ACCORDINGLY, WE ARE OF THE OPINION THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE TO THE FACTS OF THE CASE. BOTH THE ASSESSING OFFICER AND CIT(A) ERRED IN CONS IDERING THAT NON-FILING OF FORM 15H INVITES DISALLOWANCE U/S. 40(A)(IA). 4.2 SIMILAR ISSUE WAS CONSIDERED BY THE CO-ORDINATE BENCH IN THE CASE OF VIPIN P. MEHTA VS. INCOME TAX OFFICER (2011) 11 TAX MANN.COM 342(MUM) WHERE IN IT WAS HELD:. SECTION 194A, READ WITH SECTIONS 197A AND 40(A)(IA ), OF THE INCOME- TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - INTERE ST ) OTHER THAN INTEREST ON SECURITIES - ASSESSMENT YEAR 2006-07 - ASSESSEE WAS CARRYING ON BUSINESS OF MANUFACTURE AND PRINTING OF PACKAGING MATERIALS - HE MADE PAYMENT OF INTEREST TO 34 PARTI ES IN EXCESS OF RS. 5000 WITHOUT DEDUCTING TAX AT SOURCE - IN RESPONSE TO SHOW CAUSE NOTICE, ASSESSEE SUBMITTED THAT ALL PAYEES TO WHOM INTEREST WAS PAID, HAD FURNISHED DECLARATIONS IN FORM NO. 15H/1 5G, AS THE CASE MAY BE, BEFORE DATE ON WHICH TAX OUGHT TO HAVE BEEN DEDUCTED AND, THEREFORE, ASSESSEE WAS NOT LIABLE TO DEDUCT TAX - ASSESSEE ALSO SUBMITTED THAT BY OVERSIGHT HE DID NOT SUBMIT COPIE S OF DECLARATIONS IN FORM NO. 15G/15H TO OFFICE OF COMMISSIONER (TDS) -ASSESSING OFFICER TOOK A VIEW THAT IT WAS ONLY WHEN HE PROPOS ED DISALLOWANCE OF INTEREST BY INVOKING SECTION 40(A)(IA) THEN ASSE SSEE FILED DECLARATIONS CLAIMED TO HAVE BEEN SUBMITTED TO HIM BY PAYEES OF INTEREST, IN OFFICE OF COMMISSIONER (TDS) AS REQUIR ED BY SUB-SECTION (2) OF SECTION 197A - ACCORDINGLY, ASSESSING OFFICER IN VOKED SECTION 40(A)(IA) AND DISALLOWED INTEREST PAYMENTS - COMMIS SIONER (APPEALS) ITA NO.6822/MUM/11 A.Y.08-09 KARWAT STEEL TRADERS 6 CONFIRMED DISALLOWANCE MADE BY ASSESSING OFFICER - ON INSTANT APPEAL, IT WAS SEEN THAT APART FROM AFORESAID INFER ENCE, THERE WAS NO OTHER EVIDENCE IN POSSESSION OF REVENUE AUTHORITIES TO HOLD THAT DECLARATIONS WERE NOT SUBMITTED BY PAYEES OF INTERE ST TO ASSESSEE AT TIME WHEN PAYMENTS WERE MADE - MOREOVER, ASSESSING OFFICER HAD NOT RECORDED ANY STATEMENTS FROM PAYEES OF INTEREST TO EFFECT THAT THEY DID NOT FILE ANY DECLARATIONS WITH ASSESSEE AT APPROPRIATE TIME OR TO EFFECT THAT THEY FILED DECLARATIONS ONLY AT R EQUEST OF ASSESSEE - WHETHER IN ABSENCE OF ANY DIRECT EVIDENCE PRODUCED BY REVENUE AUTHORITIES, ASSESSEES CLAIM THAT HE HAD DECLARATI ONS OF PAYEES IN PRESCRIBED FORM BEFORE HIM AT TIME WHEN INTEREST WA S PAID, AND, THUS, HE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE UNDER SEC TION 194A, WAS TO BE ACCEPTED - HELD, YES- WHETHER, CONSEQUENTLY, IMP UGNED DISALLOWANCE MADE BY AUTHORITIES BELOW WAS TO BE D ELETED - HELD, YES IN THE INSTANT CASE, THE CLAIM OF THE ASSESSEE WAS THAT AT THE TIME OF PAYING THE INTEREST TO THE 34 PERSONS MENTIONED IN THE ASSESSMENT ORDER, HE HAD BEFORE HIM THE APPROPRIATE DECLARATIO NS IN THE PRESCRIBED FORM FROM THE PAYEES STATING THAT NO TAX WAS PAYABLE BY THEM IN RESPECT OF THEIR TOTAL INCOME AND THEREFORE , TAX NEED NOT BE DEDUCTED FROM INTEREST UNDER SECTION 194A, AND IN T HE LIGHT OF THESE DECLARATIONS HE HAD NO OPTION BUT TO MAKE THE PAYME NT OF INTEREST WITHOUT ANY FAX DEDUCTION. IF THE CLAIM WAS TRUE TH EN THE CONTENTION MUST BE ACCEPTED BECAUSE UNDER SUB-SECTION (IA) OF SECTION 197A, IF SUCH A DECLARATION IS FILED BY THE PAYEE OF INTERES T, NO DEDUCTION OF TAX BE MADE BY THE ASSESSEE. THE REVENUE AUTHORITIE S HAD DOUBTED THE ASSESSEES VERSION BECAUSE ACCORDING TO THEM IT WAS ONLY WHEN THE ASSESSING OFFICER PROPOSED THE DISALLOWANCE OF THE INTEREST BY INVOKING THE SECTION 40(A )(IA) IN THE COURSE OF TH E ASSESSMENT PROCEEDINGS THAT THE ASSESSEE FILED THE DECLARATION S CLAIMED TO HAVE BEEN SUBMITTED TO HIM BY THE PAYEES OF THE INTEREST , IN THE OFFICE OF THE COMMISSIONER (TDS) AS REQUIRED BY SUB-SECTION ( 2) OF SECTION 197A. APART FROM THIS INFERENCE, THERE WAS NO OTHER EVIDENCE IN THEIR POSSESSION TO HOLD THAT THE DECLARATIONS WERE NOT S UBMITTED BY THE PAYEES OF THE INTEREST TO THE ASSESSEE AT THE TIME WHEN THE PAYMENTS WERE MADE. WITHOUT DISPROVING THE ASSESSEES CLAIM ON THE BASIS OF OTHER EVIDENCE, EXCEPT BY WAY OF INFERENCE, IT WOUL D NOT BE FAIR OR PROPER TO DISCARD THE CLAIM. THE ASSESSING OFFICER HAD NOT RECORDED ANY STATEMENTS FROM THE PAYEES OF THE INTEREST TO T HE EFFECT THAT THEY DID NOT FILE ANY DECLARATIONS WITH THE ASSESSEE AT THE APPROPRIATE TIME OR TO THE EFFECT THAT THEY FILED THE DECLARATIONS O NLY AT THE REQUEST OF THE ASSESSEE IN SEPTEMBER/OCTOBER, 2008. IN THE ABS ENCE OF ANY SUCH DIRECT EVIDENCE, THE ASSESSEES CLAIM COULD NOT BE REJECTED. THE ASSESSING OFFICER HAD STATED IN THE ASSESSMENT ORDE R THAT HE FOUND THAT SOME OF THE LOAN CREDITORS WERE HAVING TAXABLE INCOME BUT STILL ITA NO.6822/MUM/11 A.Y.08-09 KARWAT STEEL TRADERS 7 THE ASSESSEE HAD SUBMITTED DECLARATIONS FROM THEM I N FORM NO. 15G. UNLESS IT WAS PROVED THAT THESE FORMS WERE NOT IN FACT SUBMITTED BY THE LOAN CREDITORS, THE ASSESSEE COULD NOT BE BLAME D BECAUSE AT THE TIME OF PAYING THE INTEREST TO THE LOAN CREDITORS, HE HAD TO PERFORCE RELY UPON THE DECLARATIONS FILED BY THE LOAN CREDIT ORS AND HE WAS NOT EXPECTED TO EMBARK UPON AN ENQUIRY AS TO WHETHER TH E LOAN CREDITORS REALLY AND IN TRUTH HAD NO TAXABLE INCOME ON WHICH TAX WAS PAYABLE. THAT WOULD BE PUTTING AN IMPOSSIBLE BURDEN ON THE A SSESSEE. THAT APART SECTION (1A) OF SECTION 197A MERELY REQUIRES A DECLARATION TO BE FILED BY THE PAYEE OF THE INTEREST AND ONCE IT IS F ILED THE PAYEE OF THE INTEREST HAS NO CHOICE EXCEPT TO DESIST FROM DEDUCT ING TAX FROM THE INTEREST. THE SUB-SECTION USES THE WORD SHALL WHICH LEAVES NO CHOICE TO THE ASSESSEE IN THE MATTER. THE SUB-SECTION DOE S NOT IMPOSE ANY OBLIGATION ON THE PAYER TO FIND OUT THE TRUTH OF T HE DECLARATIONS FILED BY THE PAYEE. EVEN IF THE ASSESSEE HAD DELAYED THE FILING OF THE DECLARATIONS WITH THE OFFICE OF THE COMMISSIONER /C HIEF COMMISSIONER (TDS) WITHIN THE TIME-LIMIT SPECIFIED IN SUB-SECTIO N (2) OF SECTION 197A, THAT WAS A DISTINCT OMISSION OR DEFAULT FOR WHICH A PENALTY IS PRESCRIBED SECTION 273B PROVIDES THAT NO PENALTY S HALL BE IMPOSED UNDER ANY OF THE CLAUSES OF SUB-SECTION (2) OF SECT ION 272A FOR THE DELAY, IF THE ASSESSEE PROVES THAT THERE WAS REASON ABLE CAUSE FOR THE SAME. FURTHER, UNDER SUB-SECTION (4) OF SECTION 272 A, NO PENALTY CAN BE IMPOSED UNLESS THE ASSESSEE IS GIVEN AN OPPORTUN ITY OF BEING HEARD. ALL THESE PROVISIONS INDICATE THAT THE FAILU RE ON THE PART OF THE ASSESSEE, WHO WAS THE PAYER OF THE INTEREST, TO FIL E THE DECLARATIONS GIVEN TO HIM BY THE PAYEES OF THE INTEREST, WITHIN THE TIME-LIMIT SPECIFIED IN SUB-SECTION (2) TO SECTION 197A WAS DI STINCT AND SEPARATE AND MERELY BECAUSE THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO SUBMIT THE DECLARATIONS TO THE INCOME-TAX DEPART MENT WITHIN THE TIME-LIMIT, IT COULD NOT BE SAID THAT THE ASSESSEE DID NOT HAVE DECLARATIONS WITH HIM AT THE TIME WHEN HE PAID THE INTEREST TO THE PAYEES. THAT WOULD BE A SEPARATE MATTER AND SEPARAT E PROOF AND EVIDENCE WAS REQUIRED TO SHOW THAT EVEN WHEN THE AS SESSEE PAID THE INTEREST, HE DID NOT HAVE THE DECLARATIONS FROM THE PAYEES WITH HIM AND THEREFORE HE OUGHT TO HAVE DEDUCTED THE TAX FRO M THE PAYMENT. NO SUCH EVIDENCE OR PROOF HAD BEEN BROUGHT ON RECOR D BY THE DEPARTMENT. [PARA 7] FOR THE AFORESAID REASONS, THE ASSESSEES CLAIM WAS TO BE ACCEPTED THAT SINCE HE HAD THE DECLARATIONS OF THE PAYEES IN THE PRESCRIBED FORM BEFORE HIM AT THE TIME WHEN THE INTEREST WAS P AID, HE WAS NOT LIABLE TO DEDUCT TAX THERE FROM UNDER SECTION 194A. IF HE WAS NOT LIABLE TO DEDUCT TAX, SECTION 40(A)(IA) WAS NOT ATT RACTED. THERE WAS NO OTHER GROUND TAKEN BY THE INCOME-TAX AUTHORITIES TO DISALLOW THE INTEREST. THEREFORE, THE ASSESSEES APPEAL WAS TO B E ALLOWED AND THE DISALLOWANCE OF INTEREST WAS TO BE DELETED. (PARA 8 ] ITA NO.6822/MUM/11 A.Y.08-09 KARWAT STEEL TRADERS 8 4.3 SIMILAR FINDING WAS ALSO HELD IN OTHER CASES RE LIED UPON BY THE ASSESSEE, WHICH WE DO NOT INTEND TO EXTRACT HERE. S UFFICE TO SAY THAT ON THE FACTS OF THE CASE, THERE IS NO NEED TO DEDUCT T AX AT SOURCE IN THE ABOVE 17 CASES AND THUS, THERE IS NO DEFAULT COMMIT TED BY THE ASSESSEE. ACCORDINGLY, DISALLOWANCE UNDER SECTION 40(A)(IA) D OES NOT ARISE. NON FILING OR DELAYED FILING OF SUCH FORMS CAN NOT RESU LT IN DISALLOWANCE U/S 40(A)(IA). THE GROUNDS RAISED BY ASSESSEE ARE ALLO WED. AO IS DIRECTED TO MODIFY THE ORDER ACCORDINGLY. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JULY 2013. SD/- SD/- (VIVEK VARMA ) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 10 TH JULY 2013. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.