TMI Blog2015 (10) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the bank was not required to deduct tax from the payments made to SBI and therefore provisions of Sec. 40(a)(ia) are not attracted? - CIT(A) allowed the claim - Held that:- We have carefully perused the orders of the authorities below. We have also the benefit of the order made u/s. 201 (1) & 201(1A) of the Act dated 23.3.2011. We have also the benefit of the copy of notification No. 56/2012(F.No. 275/53/2012-IT(B) dated 31.3.2012 wherein the CBDT has notified that no deduction of tax under Chapter XVII of the said Act shall be made on the payments being clearance charges (MICR charges). In our considered opinion, since it has been admittedly proved that the recipient of the MICR charges i.e. State Bank of India has included the sum while making tax payment by it. The ratio laid down by the Hon'ble Supreme Court in the case of Hindustan Coco Cola (2007 (8) TMI 12 - SUPREME COURT OF INDIA) squarely apply. Considering the facts in totality as mentioned above, we decline to interfere with the findings of the Ld. CIT(A). - Decided in favour of assessee. Disallowance u/s 14A - CIT(A) confirming the expenditure u/s. 14A being the amount of interest allocated on a proportionate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining to A.Y. 1991-92. 2. The sole grievance of the assessee is that the Ld. CIT(A) erred in denying interest due to the assessee u/s. 244A of the Act for the time taken for curing the defects in TDS certificate. 3. The facts of the case are that the credit for the TDS amounting to ₹ 47,19,73,313 was given to the assessee for the year under consideration. However, credit of ₹ 88,07,960/- was given on 29.4.1998. It is the claim of the assessee that interest on TDS of ₹ 88,07,960/- should be granted from April, 1991 instead of April, 1998. 4. The Ld. CIT(A) declined the allow the grievance of the assessee holding that provisions of Sec. 244(2) clearly apply on the facts of the case because there was delay in curing the defects in TDS certificate. Therefore, the assessee is not entitled to interest u/s. 244A for the period starting with 1.4.1991 and ending with 31.3.1998. 5. Aggrieved by this finding of the Ld. CIT(A), the assessee is before us. 6. The Ld. Counsel for the assessee reiterated what has been claimed before the lower authorities. Strong reliance was placed on the decision of the Hon'ble High Court of Bombay in the case of Larsen Tou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained that the bank was not required to deduct tax from the payments made to SBI and therefore provisions of Sec. 40(a)(ia) are not attracted. The explanation of the assessee was not accepted by the AO and accordingly disallowed the amount of ₹ 16,96,032/- 13. The assessee carried the matter before the Ld. CIT(A) and reiterated its stand. It was brought to the notice of the Ld. CIT(A) that SBI has confirmed that the said amount received by it was duly accounted for in its tax computation. The Ld. CIT(A) was convinced that the ratio laid down by the Hon'ble Supreme Court in the case of Hindustan Coco cola Vs CIT 293 ITR 226 squarely apply on the facts of the case and accordingly deleted the said disallowance. 14. Aggrieved by this, the Revenue is before us. 15. The Ld. DR strongly supported the assessment order. 16. Per contra, the Ld. Counsel for the assessee reiterated what has been stated before the First Appellate Authority. The Ld. Counsel also drew our attention to the order made u/s. 201(1) and 201(1A) of the Act wherein the AO has admitted that the State Bank of India has confirmed that MICR charges were duly accounted while making tax payment by SBI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied the matter before the Ld. CIT(A) but without any success. 24. Before us, the Ld. Counsel for the assessee vehemently submitted that once the interest free funds of the assessee are considered qua the average investments in assets earning tax free income, it would be clear that the assessee is having sufficient own funds for making the investments therefore the ratio laid down by the Hon'ble Bombay High Court in the case ofHDFC Bank in 366 ITR 505 squarely apply. Therefore, there cannot be any allocation of interest in so far as the computation of disallowance is concerned. The Ld. Counsel also placed reliance upon the decision of the Tribunal in assessee's own case for A.Yrs. 2002-03 to 2004-05 in ITA Nos. 6982 to 6984/M/2013. 25. The DR relied upon the findings of the AO. 26. We have carefully perused the orders of the authorities below. Undoubtedly, in the first round of litigation, the Tribunal has clearly held that Rule 8D is not applicable for the year under consideration, therefore, directed the AO to make some reasonable disallowance. However, we find that the AO has once again computed the disallowance as per the formula given in Rule 8D. We also find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y. 2007-08. 31. We have carefully perused the orders of the authorities below and the decision of the Tribunal in assessee's own case for A.Y. 2007-08. The Tribunal has considered this issue at para-39 of its order and at para-42, the Tribunal has held that the assessee is entitled to a deduction, which is quantified not with reference to the amount provided for in the account but with respect to certain percentage of the total income and also certain percentage of aggregate advances. 31.1. With our utmost respect to the aforementioned decision of the Coordinate bench, we have to say that the decision of the Hon'ble Punjab Haryana High Court in the case of State Bank of Patiala 272 ITR 54 was neither brought to the notice of the Tribunal nor it was considered by the Tribunal. On identical set of facts, the Hon'ble Punjab Haryana High Court after considering the following facts has held accordingly:- The deduction allowable under section 36(1)(viia) of the Income-tax Act, 1961, is in respect of the provision made. Therefore, making of a provision for bad and doubtful debt equal to the amount mentioned in this section is a must for claiming such deduction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round No. 4 of that appeal and at para-22 the Tribunal has held as under: Thus, respectfully following the earlier years precedence, we hold that the provisions of Sec. 115JB are not applicable in the case of the assessee and accordingly ground taken by the assessee is allowed. Respectfully following the findings of the co-ordinate bench, ground No. 2 is dismissed. 35. In the result, the appeal filed by the Revenue is partly allowed. ITA No. 6979/M/2013 - A.Y. 2006-07 - Assessee's appeal. 36. This appeal by the assessee is preferred against the order of the Ld. CIT(A)-24, Mumbai dt. 14.8.2013. 37. The first grievance of the assessee relates to the disallowance of expenditure u/s. 14A being the interest allocated on a proportionate basis. 37.1. An identical issue has been considered by us in ITA No.6978/M/13 for A.Y. 2005-06. For the same set of facts, we hold accordingly. Ground No. 1 is allowed. 38. The second ground relates to denying interest due to the assessee u/s. 244A of the Act. 38.1. An identical issue has been considered by us in ITA No. 6981/M/13 for A.Y. 1991-92, on the same set of facts we hold accordingly. Ground No. 2 is allowed. App ..... X X X X Extracts X X X X X X X X Extracts X X X X
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