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2016 (6) TMI 253 - ITAT AHMEDABAD

2016 (6) TMI 253 - ITAT AHMEDABAD - TMI - TDS u/s.194C - Disallowance u/s.40(a)(ia) - Held that:- CIT(A) while deciding the issue in favour of assessee had relied on the decision of Special Bench in the case of Merilyn Shipping & Transports(supra) and held that if any amount is payable as on end of the relevant previous year, no deduction u/s.40(a)(ia) can be made. We further find that the ld.CIT(A) has not decide the issue on merits. It is also a fact that the decision of the Special Bench in t .....

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ction 40(a)(ia) of the Act would cover not only amounts which are payable as on 31st March of a particular year, but also which are payable at any time during the year. Before us, the ld. AR has not pointed out any contrary binding decision in his support. We further find that CIT(A) has not decided the issue on merits. In view of the aforesaid facts, we are of the view that the issue needs to be re-examined at the end of the ld.CIT(A) in the light of the judgment of the Hon’ble Jurisdictional H .....

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tent of ₹ 12,354/- as against the disallowance of ₹ 70,830/- made by AO. Before us, assessee has not brought any material to controvert the findings of CIT(A) and, therefore, we find no reason to interfere with the order of CIT(A). - Decided against revenue - I.T.A. No. 1741/Ahd/2012 - Dated:- 11-5-2016 - Shri Anil Chaturvedi, Accountant Member And Shri S. S. Godara, Judicial Member For the Appellant : Mrs. Somugyan Pal, Sr.DR For the Respondent : Shri M.K. Patel ORDER Per Shri Anil .....

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order of the Assessing Officer (AO), the assessee carried the matter before the ld.CIT(A) who dismissed the appeal of the assessee. Aggrieved by the order of the ld.CIT(A), the matter was carried before the Hon ble Tribunal and the Tribunal vide order dated 15/05/2009 in ITA No.3667/Ahd/2008 restored the matter to CIT(A) for disposing the appeal afresh in accordance with law. Pursuant to the directions of the Tribunal, the ld.CIT(A) vide order dated 16/05/2012 (bearing No.CIT(A)-GNR/SET ASIDE/IT .....

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d in law and on facts in deleting the addition made by the AO of ₹ 70,830/- made as notional interest income. 3. Ground No.1 is with reference to disallowance u/s.40(a)(ia) of the Act. 4. During the course of assessment proceedings, the AO noticed that the assessee had made payment of ₹ 23,49,74,106 towards labour charges which also included payment of labour charges which exceeded ₹ 50,000/- and on which the assessee did not deduct TDS u/s.194C of the Act. (The details of paym .....

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e appellant are two fold: i) Once the amount in question relevant to the expenditure claimed are paid during the year, no disallowance u/s.40(a)(ia) can be made. ii) No TDS was deductible on the facts of the case. I have gone through the factual aspects of the first contention. It is seen that the disallowances of expenses had been made based on the vouchers where payment was already made. I have verified this after calling the books of account, which- were duly produced before me (were produced .....

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om 244 is in favour of the appellant and there is no decision of any High Court on the issue in my knowledge; I hold that once the payments are made and no amount is payable as on 31/3 of the relevant previous year, no disallowance u/s 40(a)(ia) can be made. I have also noted that the honorable jurisdictional ITAT, i.e., Ahmedabad D Bench in the case of N K Jewellers, in its recent order dated 27-04-2012 in ITA No 638/Ahd/2005-06 has followed the Special bench order cited above. In the light of .....

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s and whether on the facts of the case there can be said to be oral contract or otherwise with the persons to whom carting expenses had been paid . Neither the facts have been examined it is necessary at the issue has become only academic. Therefore the sub which becomes an alternate contention is not adjudicated. 5. Aggrieved by the order of the ld.CIT(A), the Revenue is now in appeal before us. 5.1. Before us, the ld.Sr.DR submitted that the ld.CIT(A) while deciding the issue in favour of the .....

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lay down correct law. Apart from the aforesaid submissions, she further submitted that the ld.CIT(A) has not decided the issue on merits. She therefore submitted that the matter may be remitted to the file of ld.CIT(A) to decide the issue afresh. 6. The ld.counsel for the assessee did not object to the request of the ld.Sr.DR for restoring the issue back to the file of ld.CIT(A). 7. We have heard the rival submissions, perused the material available on record and gone through the orders of the a .....

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he decision of the Special Bench in the case of Merilyn Shipping & Transports(supra) that was relied upon by the ld.CIT(A) has been overruled by the Hon ble Jurisdictional High Court in the case of CIT vs Sikhandarkhan N. Tunvar & Bros. reported at (2013) 357 ITR 312 (Guj.), wherein the Hon ble Jurisdictional High Court has held that the decision of the Special Bench of the Tribunal in the case of Merilyn Shipping & Transports does not laid down correct law. It has further held that .....

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High Court and in accordance with law and, accordingly, remit the issue back to the file of ld.CIT(A) to decide it afresh. Needless to state that the ld.CIT(A) shall grant reasonable opportunities of hearing to both the sides. The assessee is also directed to promptly furnish all the details called for by the Authorities. Thus, this ground of appeal is allowed for statistical purposes. 8. So far as the second ground with respect to deletion of addition an amount of notional interest income is c .....

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rieved by the order of AO, assessee carried the matter before CIT(A) who decided the appeal by holding as under:- 6.2. I have gone through the accounts of the appellant, the assessment order and the submissions. The appellant has not disputed the allegation that ₹ 10,62,000/- as discussed in the assessment order in para.5 have been advanced interest-free without any business purpose. It is true that the appellant has certain non-interest bearing funds. However, there is no direct nexus of .....

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