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2022 (2) TMI 1190 - ITAT RAIPURAddition u/s. 40(a)(ia) - interest/finance charges received from the assessee firm in its return of income - HELD THAT:- As matter of fact borne from the record that the assessee firm had failed to deduct tax at source on the interest/finance charges that was paid/credited by it to M/s. Magna Finance Ltd.. However, we find that the aforementioned payee M/s. Magna Finance Ltd. (supra.) had duly accounted for the aforesaid interest/finance charges received from the assessee firm in its return of income for the year under consideration and had paid the corresponding taxes on the same. The aforesaid factual position can safely be gathered from the Certificate of Chartered Accountant, dated 09.06.2016(supra.) that has been filed by the assessee before us. Now when the aforesaid payee, viz. M/s. Magna Finance Ltd. (supra.) had duly accounted for the interest/finance charges in its return of income and had paid the corresponding taxes on the same, therefore, as per the '2nd proviso' to section 40(a)(ia) of the Act, the aforementioned amount could not have been brought within the realm of disallowance as contemplated under the aforesaid statutory provision. Apart from that, as stated by the Ld. AR, and rightly so, we find that in the case of M/s. Hindustan Coca Cola Beverages Pvt. Ltd. Vs. CIT[2007 (8) TMI 12 - SUPREME COURT] had observed, that in case if the payee of the amount in question had paid the taxes on the same, then, the payer i.e. the assessee cannot be held as an assessee-in-default as regards the said amount for the purpose of enforcing the recovery of the corresponding tax liability u/s. 201(1) of the Act. We are unable to subscribe to the disallowance made by the Assessing Officer u/s. 40(a)(ia) of the Act. Accordingly, we herein set-aside the order of the CIT(Appeals) and vacate the disallowance of ₹ 3,95,301/- made by the Assessing Officer. The Ground of appeal No. 1 is allowed.
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