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2015 (6) TMI 876 - ITAT KOLKATA

2015 (6) TMI 876 - ITAT KOLKATA - TMI - Disallowance u/s 40(a)(ia) - TDS on the commission to the director paid after the closure of the financial year but before the due date of filing of return of income - CIT(A) deleted disallowance - Held that:- We concur with the view of the ld. CIT(A) that the assessee has paid the taxes at source before the statutory date of filing of the return of income which is not under dispute and in view of the decision of CIT vs Virgin Creations [2011 (11) TMI 348 .....

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(3) TMI 401 - ITAT KOLKATA] for A.yr.2007-08 where the disallowance has been restricted to 1% of the exempted income. Following the same we find no infirmity in the order of ld. CIT(A) who has rightly restricted the disallowance to 1% of the exempted income - Decided against revenue. - ITA Nos. 377 & 378/Kol/2012, CO Nos. 37 & 38/Kol/2012 - Dated:- 29-4-2015 - Mahavir Singh, JM And B. P. Jain, AM,JJ. For the Appellant : Shri K L Kanak, JCIT For the Respondent : Shri Amit Patni & Shri Nimish .....

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tive directors when it was clearly disallowable u/s 40(a)(ia) of IT Act, 1961. (2) That on the facts and circumstances of the case and in law, the Ld.CIT(A) erred in allowing relief to the assessee u/s 14A of IT Act. Whereas AO was correct in computing disallowance u/s 14A of IT Act, 1961. (3) That the appellant craves leave to add to and/or amend, alter, modify any of the grounds before or at the time of hearing of the appeal." 3. As regards ground no.1 the brief facts of the case are that .....

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rder of AO where as the ld. Counsel for assessee relied upon the submissions made before ld. CIT(A) and the order of ld. CIT(A). 5. We have heard the rival contentions and perused the facts of the case. For the sake of convenience we reproduce the order of the ld. CIT(A) for A.Yr.2006-07 as under :- "I have carefully considered the submission of the appellant along with the case laws relied upon, perused the impugned assessment order and the materials available on records and the facts of t .....

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the case of the appellant seems to have been covered by the Clause (A) of the Section 40(a)(ia) of the Act. Thus, the appellant would be liable to deduct and pay taxes before the statutory date of filing the return of income. There is no dispute in the order of the AO that the TDS had been paid before such date. Under the circumstances, and following the decision of my predecessor in the case of Tata Ryerson Limited in Appeal No.231/CIT(A)VIII/Kol/08-09, I hold that the appellant has not contra .....

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the case of CIT vs Virgin Creations in ITAT No.302 of 2011, GA No.3200/2011 dated 23rd November, 2011 in view of the similar facts of the case. The relevant portion of the decision of the Hon'ble Calcutta High Court in the case CIT vs Virgin Creations (supra) is reproduced herein below :- "The learned Tribunal on fact found that the assessee had deducted tax at source from the paid charges between the period April 1, 2005 and April 28, 2006 and the same were paid by the assessee in July .....

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he remedy to make the provision workable, requires to be treated with retrospective operation so that reasonable deduction can be given to the section as well. In view of the authoritative pronouncement of the Supreme Court, this court cannot decide otherwise. Hence we dismiss the appeal without any order as to costs. " 5.2. In the facts and circumstances of the case we find no infirmity in the order of the ld. CIT(A), who has rightly deleted the addition made by AO. Thus ground No.1 of the .....

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A of the Act. 7. We have heard the rival contentions and perused the facts of the case. The relevant findings of the ld. CIT(A) are reproduced herein below for the sake of convenience :- "I have carefully considered the observation of the assessing officer and the submission of the appellant and the decisions of various case laws as referred by the appellant. I am in agreement with the contention of the AR of the appellant that provision of Rule-8D is not applicable prior to the assessment .....

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t submitted that the interest charged in the P&L Accounts for the relevant year under appeal pertains to those loans which have been taken for the purpose of purchasing fixed assets and the investment in shares or mutual funds on which dividend income was earned were made out of appellant's own surplus funds. In support of his contention the copies of relevant extracts of the accounts and supporting details were furnished. On examination of the accounts and details furnished, the content .....

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earning of exempt income cannot be ruled out. Therefore, following the decisions of the Hon'ble Jurisdictional Tribunal in a number of cases, I restrict the disallowance to ₹ 28,428/- (being 1% of exempt dividend income of ₹ 28,42,805/-) instead of total disallowance made at ₹ 12,92,872/- by the AO u/s 14A of the Act. Thus this ground of appeal is partly allowed." 7.1. There is no dispute to the fact that Rule 8D is not applicable prior to A.Yr.2008-09. The contention .....

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