Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 1115 - AT - Income TaxAdmission of additional ground regarding chargeable of interest u/s.234B/C - HELD THAT:- Additional ground is being legal one, hence, same is admitted in the light of decision of Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Vs. CIT [1996 (12) TMI 7 - SUPREME COURT] wherein it was held that the additional ground of appeal can be admitted where the issue involved is pure question of law, not involving any investigation of facts. Interest u/s.234B/C - HELD THAT:- Counsel has placed reliance on the decision in the case of DIT(IT) Vs. G.E.Packaged Power Ink [2015 (1) TMI 1168 - DELHI HIGH COURT] wherein it was held that where the assessee were non-resident companies, entire tax was to be deducted at source of payments made by payer to it then there was no question of payment of advance tax by the assessee, therefore, Revenue could not charge any interest u/s.234B from the assessee. Interest u/s.234B/C is not chargeable, if the entire income of the assessee was subjected to TDS. However, this issue has not been examined by the AO as to whether payer was to deduct TDS or assessee’s income was subjected to TDS. Therefore, we deem it fit to remit back this issue to the file of the AO to verify where the entire income of the assessee was liable to TDS on the payments made from the payer, if so then there was no question of payment of advance tax by the assessee and the Revenue could not charge the interest u/s.234B of the Act. In view of this, additional ground is set-aside for limited purpose to the file of the AO. Disallowance being interest debited to the Profit and Loss Account and the balance amount appearing in RA bills - Disallowance u/s.40(a)(ia) in respect of expenses on account of nonpayment of TDS - HELD THAT:- We find that the assessee has debited interest in the Profit and Loss Account which itself states that the interest was paid by the assessee of which TDS was required to be made as per provisions of section 194A r.w. 2(28A) of the Act. We find that the interest is defined u/s.2(28)(A) which says that interest payable on any-money borrowed or that debt incurred this means that the assessee as borrowed and mobilize as mobilization advance and debt was incurred. Therefore, the transactions are duly covered by the provisions of section 2(28A) of the Act, therefore the ld.CIT(A) has rightly held that the interest payment was subjected to TDS. Considering the alternative ground of the assessee, we find that the ITAT in the case of Neena Kaul [2019 (5) TMI 1697 - ITAT MUMBAI] and Tripura State Electricity Corporation Ltd., [2019 (11) TMI 858 - ITAT GUWAHATI] held that the amendment made by Finance Act [2014] w.e.f. 01.04.2015 restricting disallowance made u/s.40(a)(ia) from 100% to 30% is curative in nature and therefore having retrospective effect. We, therefore direct the AO to restrict the impugned disallowance to the extent of 30% only, accordingly the ground no.1 to 4 are partly allowed.
|