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2017 (12) TMI 184 - ITAT DELHIAddition on account of non deduction of TDS from interest paid to NBFCs - disallowance u/s 40(a)(ia) - Held that:- In view of the amended provisions brought by the Finance Act 2012, we are of the opinion that in the interest of justice this matter needs to be re-examined by the AO in light of the second proviso of section 40(a)(ia) read with proviso of section 201(1) which envisages that, the assessee cannot deemed to be the ‘assessee in default’, firstly, if such resident payee has furnished return of income u/s 139; secondly, has taken into account such sum for computing the income in such return of income; thirdly, has paid tax due on the income declared by him in such return of income; and lastly, the person furnishes a certificate to this effect from an accountant any such form as may be prescribed, i.e., Form No. 26A, then in such situation neither the assessee can be treated as the assessee in default nor there can be any disallowance u/s 40(1)(ia). Now it is a settled proposition of law under the jurisdiction of Hon'ble Delhi High Court that amendment brought by Finance Act 2012 in section 40(1)(ia) and 201(1) is declaratory and curative and therefore, such an amendment shall have retrospective effect from 1.4.2005. Accordingly, we are setting aside the entire matter to the file of the Assessing Officer who shall examine the matter in view of the amended provisos and the onus would be upon the assessee to produce the certificates in respect of interest paid to other NBFCs also and Assessing Officer shall examine all the certificates and decide the issue in accordance with the law. Thus, the assessee’s appeal is treated as allowed for statistical purposes. Allowance of business expenditure - prove that the expenses incurred is purely for business purpose and or for commercial expediency - Held that:- CIT(Appeals) merely by comparing the net profit of the earlier years has deleted the said disallowance which according to us may not be the correct approach while dealing with the issue of disallowances of expenses debited and claimed as revenue expenditure. Expenses debited and claimed qua that year needs to be proven. If bills and vouchers are not available for some reasons, then other corroborative evidences like, the payments made through accounts payee cheques or through banking channels or the third party/ vendor duly confirming the transactions with evidences available with him etc. Here in this case, Ld. AR has contended that such kind of details along with the regular books of accounts have been produced, but none of the authorities have examined the same from this perspective. Accordingly, we are the opinion that the issue of disallowances of expenses should go back to the file of Assessing Officer to be examined afresh Disallowance being pre-paid expenses - Held that:- As relying on assessee’s own case for earlier year which admittedly is applicable on the facts of this year also, we uphold the deletion of the said disallowance by the Ld. CIT (Appeals) and accordingly the said ground no. 3 raised by the revenue is dismissed.
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