Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (12) TMI 1199 - AT - Income TaxAddition u/s 36(1)(iii) - diversion of interest bearing loan into interest free advances - Held that:- This issue requires a fresh examination at the end of the ld. CIT(A). Hence, we direct the ld. CIT(A) to take proper remand report from the AO to examine the agreement of loan, Maintenance contract and ‘receiving rent-free office accommodation as per agreement to establish the commercial expediency. Therefore, in all fairness we set aside order of the ld CIT(A) and direct the ld. CIT(A) to take the proper remand report from the AO and then go through the loans documents, business contract to receive rent free office and maintenance contract to establish the commercial expediency. Therefore, we allow this ground for statistical purposes Disallowance u/s 40(a)(ia) - non deduction of tax at source u/s 194A - assessee failed to produce the copies of declaration in Form no.15G/H from the parties - Held that:- Coordinate Bench Hyderabad, in the case of Malineni Babulu Vs. ITO [2015 (8) TMI 705 - ITAT HYDERABAD] wherein it has been held that declaration of the payees in the prescribed form with it at the time when the interest was paid to the respective customers, in this position, the assessee cannot be held to be liable to deduct tax therefrom u/s 194A of the Act. We further hold that if the assessee bank was not liable to deduct tax at the time of payment of interest, then section 40(a)(ia) of the Act is not attracted and the assessee cannot be held liable to pay tax. Therefore, we are of the view that section 40(a)(ia) cannot be invoked by the AO in a situation when the assessee has filed Form 15G/15H before the Appropriate Authority. Non deduction of tax at source by the assessee to the parties against payment on account of repairs and maintenance - Held that:- Assessee was rendering different types of service to the customers. Firstly, it was rendering service directly and secondly he was undertaking repairs and service on behalf of the companies for whom products were sold. It is seen that the assessee had deducted TDS when services were on behalf but has not deducted any TDS when the payments was made by way of any reimbursement to the services. We are of the view that the payment was by nature of reimbursement for repair costs met by the customers. Therefore, there is no requirement to make the TDS, when the payments were made on cost-to-cost basis. Therefore, based on the factual position explained above, we confirm the order passed by the ld. CIT(A).
|