TMI Blog2014 (12) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... Special Bench ITAT in the case of Merilyn Shipping (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) in the case of M/s. Vector Shipping Services Pvt. Ltd. (2013 (7) TMI 622 - ALLAHABAD HIGH COURT) Thus there are two views on the issue, one in favour of the assessee expressed by the Hon’ble Allahabad High Court and the other against the assessee expressed by the Hon’ble Gujarat & Calcutta High Courts. - following the decision of the Hon’ble Supreme Court in the case of Vegetable Products Ltd. (1973 (1) TMI 1 - SUPREME Court), we hold that where two views are possible on an issue, the view in favour of the assessee has to be preferred. - Decided in favour of assessee. - ITA No. 280/Bang/2014 - - - Dated:- 21-11-2014 - Shri Rajpal Yadav And Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace of Air Deccan. She has to pay 20% of the gross sales as a license fee and further 10% towards the services provided by the cabin crew inside the aircraft for providing services to sell those food items. The Assessing Officer construed the payment as a commission and observed that the assessee failed to deduct the TDS u/s 194H of the Income Tax Act on the commission payment, therefore, the expenses so claimed are to be disallowed u/s 40(a)(ia) of the I.T. Act. 3. Appeal to the CIT (A) did not bring any relief to the assessee. 4. Before us the learned Counsel for the assessee submited that the assessee has already made the payment. The Sepcial Bench of the ITAT in the case of Merilyn Shipping (2012) 16 ITR (Trib.) 1, Visakhapatnam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court in the case of Alom Extrusions Ltd(supra) will equally to the amendment to Sec.40(a)(ia) of the Act whereby a second proviso was inserted in sub-clause (ia) of clause (a) of Section 40 by the Finance Act, 2012, w.e.f. 1-4-2013. The provisions are intended to remove hardship. It was argued on behalf of the revenue that the existing provisions allow deduction in the year of payment and to that extent there is no hardship. We are of the view that the hardship in such an event would be taxing an Assessee on a higher income in one year and taxing him on lower income in a subsequent year. To the extent the Assessee is made to pay tax on a higher income in one year, there would still be hardship. 27. As far as the appeal of the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision from the words amount credited or paid to payable has held that it has to be concluded that provisions of Section 40(a)(ia) are applicable only to the amounts of expenditure which are payable as on the date 31st March of every year and it cannot be invoked to disallow expenditure which has been actually paid during the previous year, without deduction of TDS. 28. In CIT Vs. Sikandarkhan N.Tunvar Others, TAX APPEAL NO. 905 of 2012 others Dated02/05/2013, the Hon ble Gujarat High Court held that in Merilyn Shipping 146 TTJ 1 (Viz) (SB,) the majority held that as the Finance Bill proposed the words amount credited or paid and as the Finance Act used the words amounts payable , s. 40(a)(ia) could only apply to amounts that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct law is that s. 40(a)(ia) covers not only to the amounts which are payable as on 31st March of a particular year but also which are payable at any time during the year. The Hon ble Kolkatta High Court in CIT Vs. Md.Jakir Hossai Mondal (supra) did not agree with the view of the Special Bench in the case of Merilyn Shipping following its judgment on 3rd April, 2013 in ITAT No. 20 of 2013, G.A. No. 190 of 2013 (CIT, Kolkata-XI Vs. Crescent Export Syndicates) holding that the views expressed in the case of Merilyn Shipping Transports (ITA.477/Viz./2008 dated 20.3.2012) were not acceptable. 29. However, we find that the Hon ble Allahabad High Court has however upheld the view taken by the Special Bench ITAT in the case of Merilyn Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd thus the question of law as framed does not arise for consideration in the appeal. The income tax appeal is dismissed. 30. Thus there are two views on the issue, one in favour of the assessee expressed by the Hon ble Allahabad High Court and the other against the assessee expressed by the Hon ble Gujarat Calcutta High Courts. Admittedly, there is no decision rendered by the jurisdictional High Court on this issue. In the given circumstances, following the decision of the Hon ble Supreme Court in the case of Vegetable Products Ltd. (supra), we hold that where two views are possible on an issue, the view in favour of the assessee has to be preferred. Following the decision of the Hon ble Allahabad High Court, we uphold the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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