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2018 (9) TMI 70 - AT - Income TaxTDS u/s 194A - disallowance u/s 40(a)(ia) - assessee has paid the amount to Tata Finance Ltd. towards interest on loan availed for purchasing a vehicle - Held that:- Merely because the amount in question was debited from the account of the assessee through ECS it does not absolve the assessee from deducting tax at source as the nature of payment made clearly comes within the ambit of section 194A of the Act. The claim of the assessee that the amount in dispute was paid in the relevant previous year and nothing remained outstanding at the end of the year is of no relevance as the provisions contained under section 40(a)(ia)does not make any distinction between the amount paid or payable. Therefore, disallowance under section 40(a)(ia) has to be made even in respect of amount paid in the relevant previous year without deduction of tax at source under section 194A. Therefore, reversing the order of the learned Commissioner (Appeals) on this issue, we sustain the addition made by the Assessing Officer. Ground raised is allowed. Disallowance under section 14A r/w rule 8D - Held that:- Assessing Officer has treated the dividend income earned by the assessee as exempt for the purpose of making disallowance under section 14A, however, while computing the income of the assessee he has not excluded the exempt income. AO is directed to exclude the exempt income, if any, while determining the total income of the assessee. Further, in case it is found that the dividend income earned by the assessee or any part of it is exempt as per the provisions of the Act, then, the disallowance under section 14A r/w rule 8D, if warranted, is to be restricted to the quantum of exempt income earned during the relevant previous year. We, therefore, restore this issue to the Assessing Officer for adjudicating afresh. Addition on account of non–payment of Employees’ Contribution to Provident Fund and Employees State Insurance Corporation - Held that:- Decisions of the Hon'ble jurisdictional High Court in case of CIT v/s Hindustan Organics Ltd. [2014 (7) TMI 477 - BOMBAY HIGH COURT] and CIT v/s Ghatge Patil Transport Ltd.[2014 (10) TMI 402 - BOMBAY HIGH COURT] clearly apply to the facts of the assessee’s case. As regards disallowance of employer’s contribution to ESIC, undisputedly, such payment is covered by the proviso to section 43B - DR has not controverted the factual finding of the learned Commissioner (Appeals) that the aforesaid payments were made by the assessee before the due date of filing of return of income for the relevant assessment year. In view of the aforesaid, we do not find any infirmity in the decision of the learned Commissioner (Appeals) on the issue.
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