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2016 (4) TMI 28 - ITAT MUMBAI

2016 (4) TMI 28 - ITAT MUMBAI - TMI - Rectification of mistake in the order (ROM) - TDS on interest paid to Head Office (HO) and branches and commission paid to branches - disalllowance u/s 40(a)(ia) - Held that:- Some merit in the assessee's claim that the tribunal, even if it does not consider the claim for commission to correspondents as at par with that allowed to HO/branches, should state its' reason/s for upholding the disallowance, i.e., adjudicate the same. There is no positive or clear .....

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ation as valid. The impugned order is, accordingly, recalled for adjudicating the assessee's Ground in-so-far as it relates to the assessee's claim toward commission paid/allowed to correspondents. We may, it may be emphasized, not be construed as having issued any opinion in the matter; the hearing before us being limited to the 'mistake' attending the impugned order.

Before parting, we may add that there has been clearly also an omission to include the word 'commission' along with t .....

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come Tax Act, 1961 ('the Act' hereinafter) by the Tribunal dated 07.8.2013 = 2013-TII-194-ITAT-MUM-INTL in its case for assessment year (A.Y.) 2001-02. Vide the instant application, the assessee-applicant raises an objection with regard to the disposal of Ground 7 of its appeal, reading as under, by the Tribunal: '7. The CIT(A) erred in holding that the AO was justified in not granting a deduction of ₹ 33,55,026, being interest paid to Head Office (HO) and branches and commissi .....

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t of interest expenditure only, ignoring the claim qua commission expenditure, also raised along with in-as-much as the same stood included in the impugned sum of ₹ 33,55,026/-, the break-up of which is as under: (in INR) Interest paid to HO 19,61,557 Interest paid to branches 420 Commission paid to branches 1,89,562 Commission paid to correspondents 12,03,487 Total 33,55,026 The tribunal has committed a mistake when it states that the Assessing Officer (A.O.) has disallowed a sum of ͅ .....

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ing paras 14 & 15 of the impugned order, deciding the relevant ground, which read as under: '14. Ground no. 7 pertains to disallowance of ₹ 33,55,026/- under section 40(a)(i). 15. In view of our decision on grounds no. 5 and 6, above, taxing the interest income received from HO/Overseas branches, the natural consequence is that the interest paid by the assessee to its HO/Overseas branches would become deductible. However, we find that the amount of interest disallowed has been wron .....

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gard, without doubt, the impugned sum includes both the claim for interest and commission, while para 15 refers only to interest. The claim for interest works only to ₹ 19,61,977/-, and not ₹ 21,51,539/- allowed by the tribunal; which sum is inclusive of ₹ 1,89,562/-, being the commission allowed to branches (refer para 2 of this order). Clearly, therefore, it is incorrect to say that the tribunal has not considered, or has omitted to consider, when it considers the assessee .....

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e, is also apparent. The reason for the same is not far to seek. Para 15, as apparent, is to be read in conjunction with paras 11 to 13, deciding Grounds 5 and 6, which pertain to interest/commission received from HO/branches. The tribunal, in deciding Ground 7, followed its decision qua the said Grounds, stating of interest/commission allowed to HO/branches as being consequential to its' upholding the assessment of interest/commission received from HO/branches as income. The word 'corre .....

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same, however, stands to be decided on the basis of the pleadings by the parties before the appellate authority. A harmonious reading of the impugned order clearly shows that it has accepted the assessee's impugned claim, consistent with its decision in relation to Grounds 5 and 6 (reproduced above), to the extent it relates to commission allowed to HO/branches. In so doing, it follows the co-ordinate bench (in ITA No. 6615/Mum/2003) in the assessee's own case as well as in Sumitomo Mit .....

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mplete identity, except, perhaps, a difference in the taxing jurisdiction. In fact, as explained here-in-before, as also apparent from a reading of Grounds 5 and 6, the interest/commission received from HO/branches, being from self, was pleaded for being ignored in computing the income assessable to tax. The same was not accepted by the tribunal (refer paras 11-13 of the impugned order), allowing, consequently, the assessee's claim for interest/commission paid to self, i.e., HO/branches. The .....

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