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M/s G.B. Brothers And Konda Rajagopal Chetty Beedi Factory Versus Asst. Commissioner of Income-tax

2015 (12) TMI 1029 - ITAT HYDERABAD

Disallowance under S.40(a)(ia) - Held that:- The principle which emerges is that if the expenditure claimed was paid within the relevant previous year, no disallowance can be made under S.40(a)(ia). However, in the present case, assessee has to establish that the expenditure claimed was paid during the relevant previous year and nothing remained payable at the end of the year. We therefore, set aside the impugned orders of the lower authorities on this issue, and direct the Assessing Officer to .....

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Kurmi Naidu ORDER Per: Saktijit Dey, Judicial Member This is an appeal by the assessee against the order dated 30.9.2009 of learned Commissioner of Income-tax (Appeals) Guntur for assessment year 2006-07. 2. Assessee has originally raised six grounds in the Memorandum of appeal. Grounds No.1 and 6 being general in nature do not require any specific adjudication. As far as ground No.5 is concerned, at the outset, the learned Authorised Representative submitted, under the instructions of the asse .....

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e in the original grounds. 3. Briefly stated, assessee is a firm. For the assessment year under consideration, it filed its return of income on 23.10.2006 declaring an income of ₹ 27,14,993. Assessee is engaged in the business of manufacture and sale of beedis. During the assessment proceedings, the Assessing Officer on verification of books of account as well as the financial statements noticed that though the assessee has debited expenditure on printing account of ₹ 5,29,840 and ag .....

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es, so as to construe that the payments made come within the purview of S.194C, thereby casting a liability on the assessee to deduct tax at source, the CIT(A) however, having not found merit in the plea of the assessee, sustained the disallowance. 5. The learned counsel for the assessee, at the time of hearing, confined himself to the issue raised in the additional grounds and submitted before us that during the relevant previous year, the assessee has paid the entire amounts claimed as expendi .....

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ad Bench 'B' in the case of Ushodaya Enterprises Ltd. V/s. DCIT (ITA Nos.676/Hyd/2009 and 411/Hyd/2010 dated 7.1.2015 (c) Order of Mumbai Bench 'A' of ITAT in the case of Arcadia Share & Stock Brokers P. Ltd. V/s. DCIT (ITA No.1871/Mum/2013) dated 22.12.2014 6. The Learned Departmental Representative relied upon the reasoning of the departmental authorities. He also submitted that contrary view has been expressed by the Hon'ble Gujarat High Court in the case of CIT V/s. S .....

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learned Authorised Representative before us that during the relevant previous year, the assessee has paid the entire amount on printing account and agent's sales commission and nothing remained payable at the end of the relevant previous year. In this context, he has referred to the extract of the ledger accounts relating to the agent's sale commission and printing to impress upon the fact that what is claimed as expenditure has been paid during the relevant previous year. As far as the .....

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9;ble jurisdictional High Court by the Department. However, the Hon'ble jurisdictional High Court vide judgment dated 24.6.2014 in the case of Janapriya Properties P. Ltd. (ITA No.352 of 2014), clarified the position observing that since the decision of the Special Bench is binding on the division benches of the Tribunal, it is open to the Tribunal either to follow the decision or not to follow. Keeping in view the clarification of the Hon'ble High Court as aforesaid, the coordinate benc .....

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