Income Tax Appellate Tribunal - Mumbai
M/S P R Packing Service , Mumbai vs Asst Cit 25 (3), Mumbai on 12 April, 2022
IN THE INCOME TAX APPELLATE TRIBUNAL, 'C' BENCH MUMBAI BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER & MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER ITA No.7490/Mum/2019 (Assessment Year 2014-15:) M/s. P.R. Packing Service Vs. Assistant Commissioner of st 1A, 1 Floor, Pushpam CHS Income Tax-25(3) Ltd., Mumbai K.D.Road, Vile Parle(W) 601, Bld. C-10 Mumbai - 400 056 Pratyakshakar Bhavan, Bandra Kurla Complex Bandra (E), Mumbai-400051 PAN/GIR No.AAEFP6431E (Appellant) .. (Respondent) Assessee by Ms. Neha Paranjpe & Shri Om Kandalkar Revenue by Shri R A Dhyani, Sr. AR Date of Hearing 12/04/2022 Date of Pronouncement 12/04/2022 आदे श / O R D E R PER M. BALAGANESH (A.M):
This appeal in ITA No.7490/Mum/2019 for A.Y.2014-15 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-37, Mumbai in appeal No.CIT(A)37, Mumbai/11406/2016-17 dated 22/10/2019 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 22/12/2016 by the ld. Asst. Commissioner of Income Tax-25(3), Mumbai (hereinafter referred to as ld. AO).
2. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in confirming the disallowance made u/s.40(a)(ia) of 2 ITA No.7490/Mum/2019 M/s. P.R. Packing Service the Act in respect of interest paid on loans to non-banking financial companies without deduction of tax at source.
3. We have heard rival submissions and perused the materials available on record. It is not in dispute that assessee had borrowed loans from Non-Banking Finance Companies (NBFCs). It is not in dispute that interest was paid on such loans by the assessee to NBFCs without deduction of tax at source. The ld. AO disallowed the said interest by applying the provisions of Section 40(a)(ia) of the Act as the payments were made without the deduction of tax at source. Before the ld. CIT(A), the assessee filed additional evidences in the form of certificate from the Chartered Accountant in the prescribed form that the payees i.e. NBFCs had duly included the said interest income in their returns and paid taxes thereon. This request was not accepted by the ld. CIT(A). We find that the facts and documentary evidences stated in the additional evidences before the ld. CIT(A) were not denied or doubted by the revenue before us. Accordingly, we hold that the assessee would be eligible for immunity from disallowance of expenditure under second proviso to Section 201 of the Act. Hence, assessee cannot be treated as assessee in default. Accordingly, no disallowance u/s.40(a)(ia) of the Act could be made in the hands of the assessee payer. Either way, there is no loss to the exchequer in the instant case in respect of tax portion. Accordingly, the grounds raised by the assessee are allowed.
4. In the result, appeal of the assessee is allowed.
Order pronounced in the open Court on 12/04/2022.
Sd/- Sd/-
(KAVITHA RAJAGOPAL) (M.BALAGANESH)
JUDICIAL MEMBER ACCOUNTANT MEMBER
3
ITA No.7490/Mum/2019
M/s. P.R. Packing Service
Mumbai; Dated 12/04/2022
KARUNA, sr.ps
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. The CIT(A), Mumbai.
4. CIT
5. DR, ITAT, Mumbai
6. Guard file.
//True Copy//
BY ORDER,
(Asstt. Registrar)
ITAT, Mumbai