GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (3) TMI 922 - ITAT DELHI

2016 (3) TMI 922 - ITAT DELHI - TMI - Disallowance of interest u/s 40a(ia) - retrospectivity - whether any TDS has been deducted and deposited to the Central Government Account? - Held that:- In view of the dicta valid down in CIT Vs. Ansal Land Mark Township [P] Ltd [2015 (9) TMI 79 - DELHI HIGH COURT]the insertion of second proviso to section 40(a)(ia) of the Act is declaratory and curative in nature and it has retrospective effect from 1.4.2005 being the date from which sub-clause (ia) of sec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ertion of sub-section (ia) of section 40(A) of the Act.

Hence, view taken by the AO for making disallowance and basis on which the same was upheld by the ld. CIT(A) is not sustainable in view of the dicta of Hon'ble Jurisdictional High Court. Thus, we are inclined to hold that the benefit of the proviso to section 40(a)(ia) of the Act is available for the assessee for A.Y 2009-10 as the AO could not controvert the fact supported by the certificate of the payee M/s Kotak Mahindra Pvt. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

L, VICE PRESIDENT, AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER For The Appellant : Shri Somil Aggarwal, Adv Shri Abhishek Anand, Adv For The Respondent : Ms. Anima Bernwal, Sr. DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER This appeal filed by the assessee is directed against the order of the CIT(A)-2, Faridabad dated 19/12/2013 for A.Y 2009-10 in appeal No. 391/2011-12. 2. The assessee has raised the following grounds of appeal: 1. That having regard to the facts and circumstances of the ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

law and on the facts in making the impugned addition is bad in law and against the facts and circumstances of the case. 3. Briefly stated, the facts of the case are that during the course of assessment proceedings, it came to the notice of the AO that the assessee has debited an amount of ₹ 2,08,953/- on account of interest payment made to Kotak Mahindra. Further, the ARs of the assessee was asked to ascertain whether any TDS has been deducted and deposited to the Central Government Accoun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e assessee went in appeal before the ld. CIT(A) which was also dismissed and now the empty handed assessee is before this Tribunal in this second appeal with the grounds reproduced hereinabove. 4. After considering the submissions of the rival representatives, the ld. CIT(A) at para 6.7 of his order held as under: 6.7 A careful consideration of various judicial rulings relied upon by the appellant alongwith other relevant judicial pronouncements make it abundantly clear that unless otherwise spe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

8377; 2,08,953/- u/s 40a(ia) of the Act. Ground no. 5 of the appeal is thus dismissed. 5. The ld. AR submitted that the assessee had submitted all details of expenses at the time of appellate proceedings which were submitted before the AO and explained how these expenses were incurred in relation to its business. Per contra the ld. DR supported the orders of the authorities below. 6. We have heard the arguments of both the sides and carefully perused the relevant material placed on record before .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sought to explain the rationale behind its insertion. In particular, the Court would like to refer to para 9 of the said order which reads as under: "On a conceptual note, primary justification for such a disallowance is that such a denial of deduction is to compensate for the loss of revenue by corresponding income not being taken into account in computation of taxable income in the hands of the recipients of the payments. Such a policy motivated deduction restrictions should, therefore, n .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

times mutually exclusive, connotations. When we appreciate the object of scheme of section 40(a)(ia), as on the statute, and to examine whether or not, on a "fair, just and equitable" interpretation of law- as is the guidance from Hon'ble Delhi High Court on interpretation of this legal provision, in our humble understanding, it could not be an "intended consequence" to disallow the expenditure, due to non deduction of tax at source, even in a situation in which correspon .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tax withholding lapse. The penalty for tax withholding lapse per se is separately provided for in Section 271 C, and, section 40(a)(ia) does not add to the same. The provisions of Section 40(a)(ia), as they existed prior to insertion of second proviso thereto, went much beyond the obvious intentions of the lawmakers and created undue hardships even in cases in which the assessee's tax withholding lapses did not result in any loss to the exchequer. Now that the legislature has been compassio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

also for the detailed reasons set out earlier, we cannot subscribe to the view that it could have been an "intended consequence" to punish the assessees for non deduction of tax at source by declining the deduction in respect of related payments, even when the corresponding income is duly brought to tax. That will be going much beyond the obvious intention of the section. Accordingly, we hold that the insertion of second proviso to Section 40(a)(ia) is declaratory and curative in natur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

iew of the matter, the Court is unable to find any legal infirmity in the impugned order of the ITAT in adopting the ratio of the decision of the Agra Bench, ITAT in (Rajiv Kumar Agarwal v. ACIT). 16. No substantial question of law arises in the facts and circumstances of the present case. The appeal is dismissed. In view of the dicta valid down by the Hon'ble Jurisdictional High Court [supra] the insertion of second proviso to section 40(a)(ia) of the Act is declaratory and curative in natu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version