Income Tax Appellate Tribunal - Rajkot
Navubha J. Chavda,, Jamnagar vs Income Tax Officer, Ward-2(2),, ... on 20 February, 2017
आयकर अपील य अ
धकरण, राजकोट यायपीठ, राजकोट ।
IN THE INCOME TAX APPELLATE TRIBUNAL
RAJKOT BENCH, RAJKOT
[ Conducted through E-Court at Ahmedabad ]
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER And
SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A. No.592/RJT/2014
( नधा रण वष / Assessment Year : 2009-10)
Shri Navubha J.Chavda बनाम/ Income Tax Officer,
Chavda & Co. Vs. Ward-2(2)
Nr.Panchvati Society Jamnagar
Jamnagar
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. ABWPC 8135B
(अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से / Appellant by : Shri Chetan L. Agarwal, AR
यथ क! ओर से/Respondent by : Shri C.P. Bhatia, Sr.DR
ु वाई क! तार ख /
सन Date of Hearing 10/02/2017
घोषणा क! तार ख /Date of Pronounce ment 20/02/2017
आदे श / O R D E R
PER PRADIP KUMAR KEDIA, AM :
In the present appeal, the assessee is aggrieved by the action of the Commissioner of Income Tax (Appeals)-Jamnagar [CIT(A)- in short] in confirming the addition of Rs.3,25,528/- made by the Assessing Officer (AO) under s.40(a)(ia) of the Income Tax Act, 1961 (hereinafter referred to as "the Act").
ITA No.592 /RJT/2014Shri Navubha J. Chavda Vs. J.P. Meena Asst.Year - 2009-10 -2-
2. Briefly stated, the assessee is engaged in the business of transportation and contract. The return of income for Assessment Year (AY) 2009-10 was filed declaring income at Rs.5,23,080/-. The assessment was made under s.143(3) of the Act and total income of Rs.5,33,620/- was determined. Subsequently, case was reopened and assessment under s.143(3) r.w.s.147 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") was passed after making additions towards interest expenses of Rs.3,25,528/- paid to non-financial institutions on the ground that TDS on interest payment has not been not deducted in terms of 194A of the Act. It was observed by the AO that on verification of the details of interest expenditure, it was noticed that the assessee has paid interest of Rs.29,127/- to M/s.Tata Motors Ltd. and Tata Capitals Ltd. aggregating to Rs.3,25,528/-. It was asserted by the AO that as per the provisions of section 194A of the Act, when the aggregate sum payable during the Financial Year (FY) towards interest exceeds Rs.20,000/-, the assessee is under statutory obligation to deduct TDS thereon. The assessee having faulted in the deduction of TDS in terms of section 194A, the expenditure is required to be disallowed in terms of provisions of section 40(a)(ia) of the Act while computing the taxable income. The disallowance was accordingly made invoking the section 40(a)(ia) of the Act which was confirmed by the CIT(A).
ITA No.592 /RJT/2014Shri Navubha J. Chavda Vs. J.P. Meena Asst.Year - 2009-10 -3-
3. We have carefully considered the submissions made on behalf of the respective parties. It is the case of the assessee that in view of the second proviso to section 40(a)(ia) of the Act introduced by the Finance Act, 2012 w.e.f. 01/07/2012 r.w.s. 201, despite failure to deduct TDS, disallowance of expenditure ought not to have been made if the recipients payee, namely Tata Motors Ltd. and Tata Capitals Ltd. have taken into account the aforesaid sum of interest while computing income in their hands and paid taxes thereon. It is a case of the assessee that the aforesaid amendment is retrospective in nature and therefore apply to the present case. It was claimed by the assessee that recipients of the interest are reputed financial institutions have duly paid the taxes. We find that the issue is fairly settled by long line of judicial precedents on the issue. The latest decision of the issue is in the case of CIT vs. Ansol Land Mark Township Pvt.Ltd. reported in 377 ITR 635 (Delhi). The Revenue has not been able to rebut the assertions of the assessee on factual position that the recipients have duly paid the taxes on the aforesaid amount. The recipients are reputed companies. The amount involved is meager. Thus, there is no reason to doubt the claim of the Assessee. Thus, in the backdrop of the aforesaid decision of the Hon'ble Delhi High Court, we hold that disallowance under s.40(a)(ia) cannot be fastened on the assessee in such circumstances. We thus find merit in the case of the assessee and direct the AO to delete the disallowance.
ITA No.592 /RJT/2014Shri Navubha J. Chavda Vs. J.P. Meena Asst.Year - 2009-10 -4-
4. In the result, appeal of the assessee is allowed.
Order pronounced in the Court on 20/02/2017 at Ahmedabad.
Sd/- Sd/-
( RAJPAL YADAV) ( PRADIP KUMAR KEDIA )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad ; Dated 20/02/2017
ट .सी.नायर, व.,न.स./T.C. NAIR, Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं
धत आयकर आयु.त / Concerned CIT
4. आयकर आय.
ु त(अपील) / The CIT(A)-Jamnagar
5. 2वभागीय ,त,न
ध, आयकर अपील य अ
धकरण,राजोकट/DR,ITAT, Rajkot
6. गाड@ फाईल / Guard file.
आदे शानुसार/ BY ORDER,
स या2पत ,त //True Copy//
उप/सहायक पंजीकार (Dy./Asstt.Registrar)
आयकर अपील%य अ&धकरण, राजोकट / ITAT, Rajkot
1. Date of dictation .. 13.2.17(dictation-pad 6- pages attached at the end of this File)
2. Date on which the typed draft is placed before the Dictating Member .. 14.2.17
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S....... 20.2.17
7. Date on which the file goes to the Bench Clerk..................... 20.2.17
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................