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2017 (12) TMI 749 - AT - Income TaxDisallowance under section 40(a)(ia) - proof of recipient as offered the finance charges as income - assessee in default - Held that:- Commissioner of Income-tax in the impugned revisional order has recorded a finding of fact that neither the certificate from Chartered Accountant nor any other documentary evidence indicating the fact that the recipient of finance charges has offered it as income has not been produced by the assessee either before the Assessing Officer or before him. In view of the aforesaid factual position, while, we hold that the assessee cannot be treated as assessee in default in terms of second proviso to section 40(a)(ia) of the Act in case the recipient has offered the payment received as income, however, the onus is on the assessee to demonstrate with supporting documentary evidence as required under the first proviso to section 201(1) of the Act that the recipient has offered the finance charges as income in the relevant assessment year. Therefore, we direct the Assessing Officer to verify this aspect and in case it is found that the recipient has offered the finance charges of ₹ 7,91,49,028 as income in the return of income filed for the impugned assessment year no disallowance under section 40(a)(ia) of the Act is required to be made. The impugned order is modified to this extent only.
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