9911796707
TMI Blog2015 (8) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the facts brought on record by the A.O. during the course of assessment proceedings. 2. The Ld. Commissioner of Income Tax (Appeals)-II, Kanpur, has erred in law and on facts in deleting the addition of Rs. 25,00,484/- without appreciating the fact that provisions of section 40(a)(ia) are applicable on non-deduction of TDS on commission and service charges whether "paid" or "payable". That the drawing of an over conscientious distinction between "paid" and "payable", to restrict the application of section 40a(ia) only to payable (unpaid) amounts, would defeat the very legislative intent behind section 194H which places obligation, on the person paying commission, to deduct tax at the time of credit or payment of the amount by cash or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges. 3. The facts in brief borne out from the record are that the assessee is doing business of trading of medical equipments and liasoning of medical equipments on commission basis under the name and style of proprietorship concern, M/s MARC Medical Systems. During the course of assessment proceedings, the Assessing Officer has noticed that the assessee has made payment of commission of Rs. 25,00,484/- and no TDS was deducted. He accordingly invoked the provisions of section 40(a)(ia) of the Act and made disallowance of Rs. 25,00,484/-, against which an appeal was filed before the ld. CIT(A) with the submission that whole amount of Rs. 25,00,484/- was paid by the end of the financial year, therefore, nothing was payable. As such, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and have concluded that section 40(a)(ia) of the Act can be invoked on non-deduction of TDS irrespective of the fact that payments were made before the end of the financial year. 5. The ld. counsel for the assessee, Shri. Abhinav Mehrotra has invited our attention to the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Rajinder Kumar [2013] 39 taxmann.com 126 (Delhi), in which their Lordships have held that the expression "said due date" as occurring in item (A) of proviso to section 40(a)(ia) of the Act cannot mean date on which TDS as per Chapter XVIIIB should have been paid; it refers to due date of filing return of income under section 139(1) of the Act. Therefore, provisions of section 40(a)(ia) of the Act can on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the aforesaid receipts, no disallowance under section 40(a)(ia) of the Act can be made on account of non-deduction of TDS on the payment of commission. 7. Having given a thoughtful consideration to the rival submissions and from a careful perusal of the record and the judgments referred to by the parties, we find that there is no dispute with regard to the non-deduction of TDS at the time of payment of commission when it becomes payable. Moreover, it was paid before the end of the financial year. Though it was claimed that since commission was paid before the end of the financial year, section 40(a)(ia) of the Act cannot be invoked in the light of the order of the Special Bench of the Tribunal in the case of Merilyn Shipping and Trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h sum on the date of furnishing the return of income. In the light of this proposition, we are of the view that no disallowance under section 40(a)(ia) of the Act can be made if it is established that the deductee has paid tax on the commission received and for its verification the matter has to be restored back to the file of the Assessing Officer. We accordingly set aside the order of the ld. CIT(A) and restore the matter to the file of the Assessing Officer for making necessary verification and if it is established that the deductees have made payment of tax on the commission received, no disallowance under section 40(a)(ia) of the Act shall be made. 8. In the result, appeal of the Revenue is allowed for statistical purposes. Order was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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