TMI Blog2011 (8) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... f the revenue is against the order of CIT(A) deleting the addition made by Assessing Officer by invoking provisions of section 40(a)(ia) read with section 194C(3) sub-clause (i) of the Act inspite of non-filing of Form No. 15J under Rule 29D of I. T. Rules, 1962. For this, revenue has raised following ground no.1: 1) That on the facts and circumstances of the case, the Ld. CIT(A) erred in law in deleting addition of Rs.28,01,585/- u/s. 40(a)(ia) of the I. T. Act, 1961 in spite of non filing of Form No. 15J as required under third proviso to clause (i) of sub-section (3) of section 194C of the I. T. Act, 1961, read with Rule 29D of I T Rules, 1962. 3. Brief facts leading to the above issue are that assessee in the business of transportation of goods through hired vehicles, whom payment was made aggregating to Rs.28,01,588/- in respect of 42 vehicles and actual payment is exceeding Rs.50,000/- per vehicle. The assessee before Assessing Officer claimed that he has received Form 15-I from vehicle owners for non-deduction of tax, hence he has not deducted TDS in view of provisions of section 194C(3)(i) of the Act. Assessing Officer did not accept the claim of the assessee as he has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Form 15-I and filed during the course of assessment proceedings but only failed to file before the concerned Assessing Officer. As the issue is covered in favour of assessee by the decision of ITAT, Mumbai F Bench in the case of Shri Vipin P. Mehta (supra), wherein the Tribunal vide paras 6, 7 and 8 has observed as under: 6. We have carefully considered the facts and the rival contentions. Section 194A provides for deduction of tax from the interest paid by the assessee, at the appropriate rate. Section 197A(1A) provides that notwithstanding anything contained in section 194A no deduction of tax shall be made under the section if the payee of the interest furnished to the person responsible for paying the interest, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which the interest is to be included will be nil. Sub-section (2) provides that the person responsible for paying interest shall deliver or cause to be delivered to the CCIT or CIT one copy of the declaration submitted by the payee of the interest to the assessee on or before the seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect evidence, we are unable to reject the assessee s claim. The Assessing Officer has stated in para 4.4 of the assessment order that he found that some of the loan creditors were having taxable income but still the assessee had submitted declarations from them in form no. 15G. Unless it is proved that these forms were not in fact submitted by the loan creditors, the assessee cannot be blamed because at the time of paying the interest to the loan creditors, he has to perforce rely upon the declarations filed by the loan creditors and he was not expected to embark upon an enquiry as to whether the loan creditors really and in truth have no taxable income on which tax is payable. That would be putting an impossible burden on the assessee. That apart sub-section 1A of Section 197A merely requires a declaration to be filed by the payee of the interest and once it is filed the payer of the interest has no choice except to desist from deducting tax from the interest. The sub-section uses the word shall which leaves no choice to the assessee in the matter. In the case of payment of leave travel concession and conveyance allowance to employees who are liable to deduct tax from the salar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not liable to deduct tax therefrom under section 194A. If he was not liable to deduct tax, section 40(a)(ia) is not attracted. There is no other ground taken by the income tax authorities to disallow the interest. We therefore accept the ssessee s appeal and delete the disallowance of interest of Rs.7,87,291/-. Since the issue is squarely covered in favour of the assessee by the decision in the case of Vipin P. Mehta (supra), we confirm the order of CIT(A) and this issue of revenue s appeal is dismissed. 6. The next issue in this appeal of the revenue is against the order of CIT(A) deleting the addition made by Assessing Officer by invoking provisions of section 40A(3) of the Act. For this, the revenue has raised following ground no.2: 2. That on the facts and circumstances of the case the Ld. CIT(A) erred in law deleting addition of Rs.16,82,066/- made by A.o. u/s. 40A(3) in violation of extant provisions of law. 7. We have heard rival contentions and gone through facts and circumstances of the case. We find that Assessing Officer made disallowance u/s. 40A(3) of the Act for payments made to drivers/sub-contractors, who are agents of assessee. The Assessing Officer d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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