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2019 (9) TMI 1226 - AT - Income TaxRectification u/s 154 - TDS u/s 194H - Disallowance u/s.40(a)(ia) - one time premium paid by the assessee to the bank - HELD THAT:- We find from the submissions made by the assessee before the lower authorities, which had been completely ignored by the AO and by the ld. CIT(A) that assessee has made payment of one time non-refundable premium to bank of Nova Scotia for purchase of gold for the purpose of his business in order to ensure continuous and uninterrupted supply of gold by the bank to the assessee. We find the bank had also confirmed the receipt of said sum of ₹ 20 lakhs towards one time non-refundable premium from the assessee. Hence, this transaction of payment of one time premium would effectively go to add to the purchase cost of the gold and cannot be categorised as commission. Accordingly, there is no requirement of deduction of tax at source on the part of the assessee in terms of Section 194H of the Act and consequently, no disallowance u/s.40(a)(ia) of the Act would come into operation thereon. CIT(A) had completely shifted the stand taken by the AO by considering that the said payment of one time premium is capital expenditure as against the claim of revenue expenditure made by the assessee. It is well settled that the issue of capital vs revenue expenditure is always a debatable issue. Hence, we hold that the debatable issue cannot be the subject matter of rectification proceedings u/s.154 of the Act as it would not fall within the ambit of patent, glaring, apparent issue from the records. Reliance in this regard is placed on the decision of Hon’ble Supreme Court in the case of TS Balaram, ITO vs. Valkart Bros [1971 (8) TMI 3 - SUPREME COURT] Hence, we hold that the impugned disallowance of ₹ 20 lakhs could not be done in the proceedings u/s.154 of the Act. In view of the aforesaid submissions, the additional grounds and regular grounds raised by the assessee are allowed.
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