Gujarat High Court
Principal Commissioner Of Income Tax vs Ase Capital Markets ... on 22 August, 2017
Author: Akil Kureshi
Bench: Akil Kureshi, Biren Vaishnav
O/TAXAP/626/2017 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 626 of 2017
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PRINCIPAL COMMISSIONER OF INCOME TAX-1....Appellant(s)
Versus
ASE CAPITAL MARKETS LTD.....Opponent(s)
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Appearance:
MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 22/08/2017
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Revenue is in appeal against the judgement of the Income Tax Appellate Tribunal dated 23.12.2016 raising the following question for our consideration:
Whether the Appellate Tribunal was right in law and facts in setting aside the issue of disallowance u/s 40(a)(ia) of Rs.59,70,900/- to the file of the Assessing Officer for fresh adjudication in light of the decision in the case of Ansal Land Mark township (P) Ltd reported in (2015) 377 ITR (Delhi)?
2. The issue pertains to disallowance of expenditure under section 40(a)(ia) of the Act for the failure of the assessee to Page 1 of 2 HC-NIC Page 1 of 2 Created On Wed Aug 23 00:15:42 IST 2017 O/TAXAP/626/2017 ORDER deduct the tax at source. Quite apart from the assessee's legal contention that appropriate tax as prescribed under the law was deducted from time to time, the Tribunal in the impugned judgement referred to the decision of the Delhi High Court in case of Commissioner of Income-Tax vs. Ansal Land Mark Township (P) Ltd vs. reported in [2015] 377 ITR 635 (Delhi) and held that if the payee has paid the tax, disallowance under section 40(a)(ia) would not be applicable. For verification of full details in this regard the Tribunal placed the matter back before the Assessing Officer.
3. We notice that Delhi High Court in the said judgement had referred to the newly inserted proviso to section 40(a)(ia) and considered in light of the proviso to sub-section (1) of section 201 of the Act with effect from 01.07.2012. It was noticed that such provisos were added to obviate the difficulties of an assessee who, though may not have deducted tax at source while making certain payments, can establish that the payee had furnished the return of income and also paid the tax due on such income. In such a case, the assessee would not be treated as assessee in default.
4. We see no reason to interfere. No question of law arises. Tax appeal is dismissed.
(AKIL KURESHI, J.) (BIREN VAISHNAV, J.) divya Page 2 of 2 HC-NIC Page 2 of 2 Created On Wed Aug 23 00:15:42 IST 2017