9911796707
TMI Blog2014 (10) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... struction of canals, etc., For assessment year 2005-06, the assessee filed the return of income on 31/10/2005 declaring income of Rs. 1,05,66,787/-. The return was processed u/s 143(1) of the Income-tax Act, 1961[hereinafter referred to as 'the Act'] and the case was subsequently taken up for scrutiny. The assessment was completed u/s 143(3) of the Act by order dated 07/12/2006 wherein the income of the assessee was determined at Rs. 1,16,47,065/-. 2.2 The order of assessment for assessment year 2005-06 dated 7/12/2006 was the subject matter of revisionary proceedings by the CIT(Central), Karnataka. The ld.CIT(Central), by order u/s 263 of the Act dated 31/3/2009 held that the order of assessment passed u/s 143(3) of the Act by ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y order dated 23/12/2011, the assessee preferred an appeal before the CIT(A), Belgaum. Before the ld.CIT(A), the assessee submitted that the amounts in question amounting to Rs. 1,53,78,795/- had already been paid to Shri Uday Kumar Shetty and that no amounts were payable as on 31/3/2005. It was also submitted that Shri Uday Kumar Shetty had accounted for the payments of Rs. 1,53,78,795/- in his books of account; had offered the same in his return of income for assessment year 2005-06 and paid taxes thereon and therefore there was no loss to revenue. The ld.CIT(A), however, was of the view that the contention raised by the assessee that the provisions of section 40(a)(ia) of the Act was applicable only to amounts payable as on 31st March of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s failed to appreciate the fact that the provisions of section 40(a)(ia) of the Act is not applicable to the facts of the instant case since the recipient/payee i.e. Sri.Uday Kumar Shetty has already declared the payments made by the appellant in his respective returns and also he is maintaining his books of account as per the scheme of the Act and is further subject to audit under the provisions of section 44-AB of the Act and hence no disallowance is warranted under the provisions of section 40(a)(ia) of the Act under the facts and circumstances of the case. 5. The learned authorities below are not justified in law in not appreciating that the deduction of tax is only one mode of recovery of tax and once the tax is recovered by any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le and are wrong on the facts of the case. 9. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above. 10. In view of the above and other grounds that may be urged at the time of the hearing of the appeal, the appellant prays that the appeal may be allowed in the interest of justice and equity. 4. The grounds at Sl.Nos.1, 2, 9 and 10 are general in nature and therefore no adjudication is called for thereon. 5. Disallowance u/s 40(a)(ia) of the Act: 5.1 The grounds at Sl.No.3 to 7 are in respect of the only issue of dispute before us. They challenge the order of the ld.CIT(A) in confirming the disallowance of Rs. 1,53,78,795/- made by the Assessing Officer by invoking the provisions of sec.40(a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA NO.1831/Bang/2013 dated 21/2/2014 The ld.AR prayed that, in view of the above submissions, the assessee's appeal be allowed. 5.3 Per contra, the ld. DR supported the orders of the authorities below. 5.4.1 We have heard the rival submissions and perused and carefully considered the material on record, including the judicial decisions cited. Admittedly, the undisputed fact is that the assessee in the case on hand, has not deducted tax at source on the payments made to Shri Uday Kumar Shetty amounting to Rs. 1,53,78,795/-. As submitted by the ld.AR, as far as the payments made by the assessee to Shri Uday Kumar Shetty, the fact that the payee has accounted for these payments in his books of account, financial statements and the same hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts received from the assessee in his hands. 5.4.2 Earlier, we have held that the second proviso to section 40(a)(ia) of the Act is retrospective in operation w.e.f. 1/4/2005. As per this newly inserted proviso, the assessee is required to file Form No.26A as per rule 31ACB of the IT Rules,1962 so as not to be held as an assessee in default as per the proviso to section 201 of the Act. As held in the decision of the co-ordinate bench in the case of S.M.Anand vs. ACIT (supra), since the assessee in the period under consideration i.e. assessment year 2005-06, could not have contemplated that such a compliance was to be made, we also in the case on hand, remit the matter to the file of the Assessing Officer. The Assessing Officer is directed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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