Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (8) TMI 716 - AT - Income TaxDisallowance of interest component on EMI paid to Non-Banking Financial Companies (“NBFCs”) u/s 40(a)(ia) - HELD THAT:- As assessee though has taken the plea on the basis of the second proviso to section 40(a)(ia) of the Act, however, failed to establish or prove that NBFCs had paid income tax on interest received from the assessee. Now, in the present appeal, the assessee by way of additional evidence has produced a copy of Form No. 26A issued by the Chartered Accountant under the first proviso to sub-section (1) of section 201 of the Act in respect of interest paid by the assessee to Reliance Capital Ltd., wherein it has been certified that Reliance Capital Ltd. has taken into account the sum received as interest from the assessee while computing its taxable income in the return of income filed. We deem it appropriate to admit the additional evidence filed by the assessee before us. We are further of the view that in the interest of justice, this issue be remanded to the Assessing Officer for de novo adjudication as per law after necessary verification of details as submitted by way of additional evidence before us. Before concluding on this issue, we may add that in respect of interest paid to the other NBFCs, i.e, Tata Capital, Kotak Mahindra P. Ltd., and Shagun Corporation, if the assessee is able to furnish similar details before the Assessing Officer, same shall be taken into consideration while deciding the issue as per law. Accordingly, ground no. 1 raised in assessee’s appeal is allowed for statistical purposes. Admission of additional ground of appeal - disallowance if any has to be restricted to 30% of the amount on which TDS has not been deducted due to amendment made in section 40(a)(ia), which has been introduced to avoid undue hardship and therefore is applicable retrospectively - HELD THAT:- CBDT, while explaining the provisions of the Finance (No. 2) Act, 2014, vide Circular No. 1 of 2015 dated 21/01/2015 clarified that the amendment by the Finance (No. 2) Act, 2014 to the provisions of section 40(a)(ia) of the Act takes effect from 1st April 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent years. We further find that in Shree Choudhary Transport Company [2020 (8) TMI 23 - SUPREME COURT] held that the amendment by the Finance (No. 2) Act, 2014 is with effect from 01/04/2015 and shall be applicable from the assessment year 2015-16. Since the amendment to section 40(a)(ia) of the Act by the Finance (No. 2) Act, 2014 is with effect from the assessment year 2015-16, therefore, the said amendment is not applicable to the year under consideration. As a result, the additional ground raised by the assessee is dismissed.
|