TMI Blog2016 (8) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... income by treating deductor to be assessee-in-default for shortfall in its amount of tax deducted at source. We draw support from the judgement of Hon’ble Supreme Court in the matter of CIT vs. Vegetable Products Ltd. (1973 (1) TMI 1 - SUPREME Court ) wherein the Hon’ble Supreme Court has laid down the principle that “ďf two reasonable constructions of a taxing provisions are possible, that construction which favours the assessee must be adopted.” In view of the above discussions, we remit the matter to the file of the AO for limited verification of Form No. 26A prescribed under Rule 31ACB on the aspect as to whether recipient of payment has included the same in their computation of business income offered to tax and, if found to be so, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , accordingly as per provisions of section 40(a)(ia) of the Income Tax Act, 1961, he disallowed the above amount of ₹ 3,48,284/- and added to the total income of the assessee. 2.1 Being aggrieved, the assessee carried the matter in appeal before the ld CIT(A) and submitted that where it is held that the payment of financial charges is interest, then assessee submits that on such interest/financial charges, income has been displayed and declared by BMW Finance Services and Tata Capital and the provisions of section 40(a)(ia) will not be applicable as the recipient NBFCs have declared income on receipt of interest/financial charges and have paid taxes over such income. In support, the assessee firm submits certificates in prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 40(a)(ia) was invoked and entire amount was disallowed. The ld. CIT(A) has confirmed the same holding that the 2nd proviso to S.40(a)(ia) introduced w.e.f. 01.04.2013 is only prospective. Ld. CIT(A) also held that the fact that the recipient have subsequently paid does not absolve payee from consequence of disallowance u/s 40(a)(ia). The Ld. CIT(A) has disregarded the provision and law on the subject laid out by Hon ble Supreme Court in cases reported as Hindustan Coca Cola and Beverages Pvt. Ltd. 293 ITR 226(SC) and Eli-Lilly 312 ITR 25 (SC.). The ld AR further submitted that the legislation is applicable on all pending assessment after the decision of Hon ble Supreme Court in the case of Hindustan Coca Cola reported as 293 ITR 226 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a(ia). The question that arises for consideration is where there is no decision of a jurisdictional High Court and there are conflicting views of the different High Court, which view should be followed. In this regard, we draw support from the judgement of Hon ble Supreme Court in the matter of CIT vs. Vegetable Products Ltd. (1972) 88 ITR 192 (SC) wherein the Hon ble Supreme Court has laid down the principle that f two reasonable constructions of a taxing provisions are possible, that construction which favours the assessee must be adopted. Recently, an identical matter came up before the Coordinate Raipur Bench in the case of RKP Company vs. ITO ward-1, Korba in ITA No. 106/RPR/2016 dated 24.06.2016 wherein the Coordinate Bench has hel ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
