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Vivek Dattatraya Gupte HUF Versus The Income Tax Officer

TDS u/s 194A - Disallowance made under section 40(a)(ia) - interest paid to Chatrapati Sambhaji Maharaj Patasanstha Limited - Held that:- Where the assessee had made payment on account of interest expenditure to which the provisions of section 194A of the Act are applicable, the onus was upon the assessee to deduct TDS and in absence of the same, the said expenditure is liable to the disallowed in the hands of assessee, in view of the provisions of section 40(a)(ia) of the Act. We uphold the ord .....

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4 (supra), the Assessing Officer is directed to adjudicate the issue in accordance with law after affording reasonable opportunity of hearing to the assessee. - ITA Nos.406 & 407/PN/2014 - Dated:- 16-12-2015 - MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM For the Appellant : Shri Nani Wadekar For the Respondent : Shri Sanjay Punglia ORDER PER SUSHMA CHOWLA, JM: Both the appeals filed by the assessee are against the consolidated order of CIT(A)-III, Pune, dated 05.12.2013 relating to asse .....

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earned CIT(A) erred on facts and in law in upholding addition of ₹ 6,21,123/- being interest paid to Chatrapati Sambhaji Maharaj Patasanstha Limited under section 40(a)(ia) of the Act. 2) The appellant craves leave to add, alter, delete or substitute all or any of the above grounds of appeal. 4. The issue raised in both the appeals under consideration is in relation to disallowance made under section 40(a)(ia) of the Act on account of interest paid to Chatrapati Sambhaji Maharaj Patasansth .....

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apati Sambhaji Maharaj Patasanstha Limited, which was a credit co-operative society. The assessee had paid sum of ₹ 6,21,123/- as interest to the said Chatrapati Sambhaji Maharaj Patasanstha Limited, which expenditure was debited to the Profit & Loss Account. The Assessing Officer verified the allowability of the expenses with regard to TDS provisions as the payment of interest to Chatrapati Sambhaji Maharaj Patasanstha Limited attracted the provisions of section 194A of the Act. The a .....

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re not attracted. The CIT(A) however, dismissing both the pleas of the assessee, upheld the addition of ₹ 6,21,123/-, against which the assessee is in appeal. 7. The learned Authorized Representative for the assessee pointed out that Pune Bench of Tribunal have taken a consistency view that the provisions of section 40(a)(ia) of the Act were attracted to an expenditure to which provisions of tax deduction at source are applicable, irrespective of the fact whether the same is paid at any ti .....

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The matter was restored back to the file of Assessing Officer to consider the plea of the assessee based on the second proviso to section 40(a)(ia) of the Act. Reliance in this regard was placed on the ratio laid down in ACIT Vs. Bhavook Chandraprakash Tripathi (2015) 43 CCH 292 (Pune-Trib). 8. The learned Departmental Representative for the Revenue has placed reliance on the orders of authorities below. 9. We have heard the rival contentions and perused the record. The first issue arising in t .....

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plicable, the onus was upon the assessee to deduct TDS and in absence of the same, the said expenditure is liable to the disallowed in the hands of assessee, in view of the provisions of section 40(a)(ia) of the Act. We uphold the order of CIT(A) in this regard. 10. Now, coming to the second aspect of the issue i.e. new legal plea raised by the assessee in view of second proviso to section 40(a)(ia) of the Act, which was inserted by the Finance Act, 2012. The Tribunal in ACIT Vs. Bhavook Chandra .....

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o be an assessee in default under the first proviso to section 201(1) of the Act. The stand of the assessee is that the said proviso should be understood as retrospective in nature as it has been introduced to eliminate unintended consequences which may cause undue hardships to the tax payers. It was pointed out that in similar circumstances, the Pune Bench of the Tribunal in the case of ITO vs. M/s Gaurimal Mahajan & Sons vide ITA No.1852/PN/2012 dated 06.01.2014 following the decision of t .....

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