TMI Blog2014 (1) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... e could not be given to the assessee as the assessment year involved is assessment year 2007-08 - Decided against assessee. - I.T.A. No.4299/Mum/2012 - - - Dated:- 27-12-2013 - Shri B. R. Mittal,(JM) And Sanjay Arora (AM),JJ. For the Appellant : Shri Raj M. Shroff For the Respondent : Shri Sanjeev Jain ORDER Per B. R. Mittal, JM: The assessee has filed this appeal for assessment year 2007-08 against the order of Commissioner of Income Tax (A) dated 26.3.2012. 2. Only effective ground of appeal taken in this appeal is as to whether ld. CIT(A) has erred in confirming the action of Assessing Officer to disallow the claim of interest expenditure of Rs.2,48,500/- on the ground that assessee failed to deduct TDS but the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee which are stated in para 2 of the impugned order has confirmed the action of AO vide para 3 of his order which reads as under : "3. I have carefully gone through the assessment order, the submission of the appellant and the facts of the case. The AO has made the addition on the ground that the appellant had not deducted tax at source on the interest payment of Rs.2,48,500/-. The AO has also mentioned in the assessment order that the ld. AR of the appellant had agreed for this addition during the assessment proceedings. However, still the appellant has filed the appeal and has pleaded before me that since, the recipients of the interest amount have paid taxes on the interest income, there is no need for making any TDS as this will tan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) ..... (b) .... [Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident-- (i) has furnished his return of income under section 139; (ii) has taken into account such sum for computing income in such return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed]" 6. Ld. AR submitted that seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ductee, disallowance u/s 40(a)(ia) can still be made." 8. We have carefully considered the orders of authorities below, submissions of ld. Representatives of the parties as also amendment made by Finance Act, 2012 to section 201(1) as well as section 40(a)(ia) of the Act. 8.1 On perusal of the amendment made by Finance Act, 2012 by inserting the proviso to section 40(a)(ia) of the Act w.e.f.1.7.2013, it is stated that " if the payer fails to deduct the whole or any part of the tax in accordance with the provisions of Chapter XVII-B of the Act on sum paid to a resident or on the sum credited to the account of resident, payer shall not be deemed to be an assessee in default if in respect of on such amount tax has been paid by the payee re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2007-08. There is no dispute to the fact the assessee failed to deduct TDS in respect of interest paid and also admitted before the AO for making the disallowance as per the provisions of section 40(a)(ia) of the Act at the time of assessment proceedings. We are of the considered view that the said amendment made by Finance Act, 2012 to section 40(a)(ia) of the Act cannot benefit the assessee. Hence, the ld. CIT(A) has rightly, on the facts and circumstances of the case, made disallowance of the interest paid by assessee of Rs.2,48,500/- u/s 40(a)(ia) of the Act. Accordingly, we confirm the order of ld. CIT(A) by rejecting the grounds of appeal taken by assessee. 9. In the result, the appeal of the assessee is dismissed. Order pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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