TMI Blog2016 (11) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... ri K.J. Rao, DR ORDER Per Smt. P. Madhavi Devi, J. M. This is assessee s appeal for the A.Y 2013-14. In this appeal, the assessee is aggrieved by the order of the CIT (A) in confirming the disallowances of payments made without making TDS and the consequential additions of (i) ₹ 34,91,410/-, (ii) ₹ 5,05,61,850/- u/s 40(a)(ia) of the Act. 2. Brief facts of the case are that the assessee firm, engaged in transport business, filed its return of income for the A.Y 2013-14 on 1.10.2013 admitting a total income of ₹ 33,19,710. This return was revised on 29.10.2013 admitting the same income. During the assessment proceedings u/s 143(3) of the Act, the assessee was directed to produce its books of account and also necessary information relating to the entries in the books of account. The assessee filed the requisite information. On perusal of the information filed by the assessee, the AO observed that the assessee has debited finance charges of ₹ 34,91,410 and transportation charges of ₹ 5,05,61,850 to its P L a/c. AO therefore, asked the assessee to furnish the details of the payments made and also indicate the compliance of TDS thereon. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Counsel for the assessee submitted that the assessee has purchased the vehicles by obtaining the finance from the non banking financial institutions and the monthly payments made to such institutions include both the principal as well as the interest. He submitted that the TDS is to be made only from the interest component of the installment, whereas the AO has disallowed the entire amount u/s 40(a)(ia) of the Act. Since the bifurcation is not available and further since the amount has already been paid and nothing remained payable at the end of the relevant previous year, the disallowance is not sustainable. In support of this contention, the assessee has relied upon the following decisions wherein the decision of the Visakhapatnam Special Bench in the case of Merilyn Shipping Transport (146 TTJ (1) has been followed and it was held that the provisions of section 40(a)(ia) are not applicable to the amounts already paid by the end of the relevant financial year: a) KLR Industries Ltd vs. DCIT in ITA No.1480/Hyd/2014, dated 15.07.2015 b) CIT vs. M/s. PEC Electricals P Ltd (ITTA No.263 of 2013) (Andhra Pradesh High Court) c) CBDT Circular No.19/2015 dated 27.11.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee has given PAN Nos. of the owners of the vehicles for a total payment of ₹ 4,36,55,230 and at least in respect of these payments, the TDS provisions cannot be invoked. He further submitted that under the proviso to sub section 5 of section 194C, the TDS provisions are applicable only if the aggregate payment to any person exceeds ₹ 75,000/-. He submitted that none of the authorities below have examined the applicability of the exceptions to section 194C of the Act. In support of this contention that aggregate of most of the payments do not exceed ₹ 75000/- during the relevant financial year, the assessee has filed the list of the parties to whom the assessee has made payments. As per the said list, 67 parties are paid less than ₹ 75,000 in aggregate during the relevant previous year. Further, he also relied upon the decision of Merilyn Shipping Transport Ltd (cited Supra) in support of this contention that all the payments have been made by the end of the relevant previous year and therefore, the provisions of section 40(a)(ia) are not applicable. 9. The learned DR, on the other hand, supported the orders of the authorities below. 10. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of 194C provides that the TDS need not be made if the aggregate value of the amounts paid does not exceed ₹ 75000. It is seen that neither the AO nor the CIT (A) has examined the applicability of this provision. 11. Further, it is also the case of the assessee that the assessee has not entered into any contract for hiring of vehicles and therefore, provisions of section 194C are not applicable. In support of this contention, he placed reliance upon the judgment of the Hon'ble Gujarat High Court in the case of CIT vs. Valibhai Khanbhai Mankar reported in (2013) 211 Taxman 18(Guj.) wherein it was held that if the conditions prescribed u/s 194C of the Act are not satisfied, the liability of the payer to deduct the tax at source would cease and therefore, application of section 40(a)(ia) r.w. section 194C would not arise. Further, assessee also placed reliance upon the decision of the Coordinate Bench of this Tribunal in the case of Associate Roadways P Ltd vs. Dy.CIT in ITA No.63/Hyd/2013 for the proposition that non furnishing of form No.15I during the course of the assessment proceedings is only a procedural lapse and does not attract the liability created in section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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