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TMI Blog2016 (12) TMI 1358X X X X Extracts X X X X X X X X Extracts X X X X ..... business of trading in gunnies and jute, filed his return of income for the assessment year 2009-10 on 19.9.2010 declaring total income of Rs. 1,86,830/-. The case was selected for scrutiny and accordingly notices u/s 142(1) & 143(2) of the Income Tax Act, 1961 (hereinafter called as 'the Act') were issued. In response to notices, the authorized representative of the assessee appeared from time to time and furnished the information called for. The assessment was completed u/s 143(3) of the Act, on 19.12.2011 determining total income of Rs. 5,36,830/- inter-alia making additions of Rs. 3,50,000/- towards disallowance of certain expenditures. 3. The CIT, Guntur issued a show cause notice dated 20.7.2014 u/s 263 of the Act and asked t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the assessment order passed by the A.O. cannot be considered as erroneous in so far as it is prejudicial to the interest of the revenue. 5. The CIT after considering the explanations furnished by the assessee held that the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue, as the A.O. failed to examine the issue of disallowance of interest u/s 40(a)(ia) of the Act for non-deduction of tax at source u/s 194A of the Act. Though the assessee claims to have furnished form no.15G/15H to the CIT(TDS), Hyderabad, on perusal of the forms filed by the assessee, it is observed that the recipients have filed forms on 5.4.2009, whereas interest was credited to respective accounts on 31.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS. These facts were brought to the notice of the A.O. at the time of assessment proceedings by filing necessary declaration forms. The A.O. after examining the details filed by the assessee has completed the assessment by making certain adhoc disallowance towards expenditure, therefore, the CIT was not correct in assuming jurisdiction u/s 263 of the Act. 7. On the other hand, the Ld. D.R. strongly supported order of the CIT. The Ld. D.R. further submitted that the assessee could have deducted TDS u/s 194A of the Act when the recipients have not submitted declarations in form no.15G/15H before the date the assessee should credit the interest to the respective payee's accounts. Since, the recipients have submitted forms after the due date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sides, we find force in the arguments of the assessee for the reason that the A.O. has examined the issue of disallowance u/s 40(a)(ia) of the Act, towards interest payments at the time of assessment. The assessee has furnished details of declarations received from the recipient of interest and the A.O. after satisfied with the explanations offered by the assessee has chosen to accept interest payment, therefore, the CIT was incorrect in holding that the A.O. has not examined the issue at the time of assessment proceedings. In so far as disallowance of interest u/s 40(a)(ia) of the Act, for non-deduction of tax at source u/s 194A of the Act, we find that the assessee has received declarations in form 15G/15H from the recipient of inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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