TMI Blog2014 (12) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid decision of Agra Tribunal and we therefore set aside the issue to the file of A.O for him to decide the issue in the light of decision of Agra Tribunal and in accordance with law. - Decided in favour of assessee for statistical purpose. - ITA No. 2066/Ahd/2014 - - - Dated:- 12-12-2014 - Shri Anil Chaturvedi, Accountant Member And Shri Kul Bharat Judicial Member For the Petitioner : Sri V.K Singh, Sr. D.R. For the Petitioner : Sri Rasesh Shah, A.R. ORDER PER : ANIL CHATURVEDI, ACCOUNTANT MEMBER:- This is the assessee s appeal against the order of Ld. CIT(A)-I, Baroda dated 23-05-2014 for A.Y. 2010-11. 2. Facts as culled out from the material on record are as under. 3. Assessee is a company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to India Bull. AO was of the view that since the loan was from a Non-Banking Company, the interest payment was liable for TDS. AO noticed that since Assessee had not deducted TDS, the interest expense of ₹ 41,60,384/- was liable to be for disallowance u/s. 40(a)(ia) of the Act and accordingly disallowed the same. Aggrieved by the order of AO, Assessee carried the matter before Ld. CIT(A) who dismissed the appeal of the assessee by holding as under:- 5. The reasons for making disallowance of ₹ 41,60,384/- u/s. 40(a)(ia) of the Act as mentioned by the AO in the assessment order u/s. 143(3) as well as above submission of the appellant have been considered. The first ground of appeal of the appellant is that the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowed while computing the income. 5.1 It is further submitted by the appellant that though the decision of ITAT in case of M/s. Merilyn Shipping Transport has been suspended from operation but it Is still pending before the High Court for final decision. As per the appellant in this case, it has been held that the provisions is applicable to the payable services only which appears to be correct when someone goes by the words used in the section in absence of any clarification or amendment by parliament and in view of the principle of interpretation, in the normal course, the words used in the statute should be taken into consideration for interpretation of the clause. As per the appellant although, Hon ble Gujarat High Court has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rat if the Interpretation as advanced by the assessee is accepted, it would lead to a situation where the assessee who, though was required to deduct the tax at source but no such deduction was made or more flagrantly deduction though made is not paid to the Government, would escape the consequence only because the amount was already paid over before the end of the year in contrast to another assessee who would otherwise be in similar situation but in whose case the amount remained payable till the end of the year. As per the Hon'ble High Court of Gujarat there is no logic why the legislature would have desire to bring about such irreconcilable and diverse consequences. As per the Hon'ble High Court of Gujarat High Court in the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have deducted and paid TDS on the date of furnishing the return of income by the payee if the assessee is not deemed to be in fault as per first proviso to section 201(1). As per proviso to section 201(1) if the payee has furnished the return of income u/s. 139(1) and has taken into account such sum for computing the income in its return of income and if it has paid the tax due on the income declared then Assessee shall not be deemed to be in default. He therefore submitted that if India Bulls has filed the return of income for A.Y. 2010-11 u/s. 139(1) and has paid the tax on declared income by taking into account assessee s payments to him, no disallowance be made in case of Assessee. He therefore submitted that the matter may be remitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion to punish the lapses of non deduction of tax at source from payments for expenditure-particularly when the recipients have taken into account income embedded in these payments, paid due taxes thereon and filed income tax returns in accordance with the law. As a corollary to this proposition, in our considered view, declining deduction in respect of expenditure relating to the payments of this nature cannot be treated as an intended consequence of Section 40(a)(ia). 8.1. In the present case before us, the Id. A.R, has not placed any material on record to demonstrate that the India Bulls has filed return of income u/s. 139(1), had offered the amounts received from Assessee as its income and has paid the tax on such income. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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