TMI Blog2017 (9) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... were test checked and the amount of expenditure claimed by the assessee was verified and the genuineness of the same has been proved, then, we do not see any reason to interfere with the finding of fact recorded in paragraph 54 of the Tribunal's order. All the more, when Section 40(ba) was not attracted as far as this disallowance is concerned. Despite his persuasive ability, when Mr. Ahuja would submit that even the reframed question (a1) is the substantial question of law, we are unable to agree with him. We affirm the findings of fact by the Tribunal and dismiss this Appeal to that extent. We have expressed our displeasure and unhappiness at the manner in which the Tribunal approached the matter/issue insofar as the applicability of Section 40(ba) (question no. 10(a) reproduced above) of the IT Act is concerned, we allow this Appeal. We set aside the Tribunal's order to that extent. We restore the issue to the file of the Tribunal for being decided afresh on merits and in accordance with law. - INCOME TAX APPEAL NO. 1826 OF 2014 - - - Dated:- 4-9-2017 - S. C. DHARMADHIKARI PRAKASH D. NAIK, JJ. Mr. Abhay Ahuja a/w Mr. P. A. Narayanan for the Appellant Mr. Riy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 14.12.2010 no deduction of TDS has been made on the salary paid to employees of the Joint Ventures. Total amount is disallowed as per provision of Sec.40(a)(ia) of the Income-tax Act, 1961. Even disallowance of this amount is also warranted as provision of Sec.40(ba) wherein it is stipulated that in case of association of person, any payment of salary or remuneration by whatever name called, made by such association, body or member of such association shall not be allowed as deductible expenditure. 6. In Appeal before the First Appellate Authority as well, the matter was approached by the First Appellate Authority in the light of applicability of Section 40(ba) of the IT Act. 7. That aspect is dealt with by the First Appellate Authority in paragraph 5.4 of the order dated 26th March, 2012 (page 36 of the paper book). 8. Thus, the First Appellate Authority had before it a remand report and a reply on the remand report by the assessee. The assessee's representative contended that the payments were routed through the coventures and therefore, Tax Deducted at Source (TDS) was 2% from the salary at the rate applicable to that of subcontractors. Thus, from the sala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance in relation to salary and administrative expenses. The Tribunal, after noting the rival contentions and particularly the argument that no disallowance has been made in the assessment years 2006-2007 and 2007-2008 which were framed under Section 143(3), proceeded further to hold that the departmental representative relied on some decision, details of which are not disclosed to justify the disallowance. The Tribunal holds in paragraph 18 that it has heard the detailed arguments, perused the evidence placed in the Appeal paper book and the written submissions. 11. It then mixes up its findings and in relation to the applicability of Section 40(a)(ia) and 40(ba), but concludes that it does not find any reason to sustain the disallowance under Section 40(a)(ia) as the payments made by the assessee to ITD Cementation India Limited were only on account of salary and related expenses. 12. Then it purports to divert it's attention to Section 40(ba) of the IT Act, but proceeds to state that this provision is specific. It calls for disallowance of payment of any kind by the association of persons to it's members. Then it holds that it could have accepted the arguments of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1961, the amounts enumerated in the clauses and sub-clauses thereto shall not be deducted in computing the income chargeable under the head Profit and gains of business or profession That inter alia includes an amount in the case of an AOP (Association Of Persons) or body of individuals (other than a company or a cooperative society or a society registered under the Societies Registration Act, 1860, or under any law corresponding to that Act in force in any part of India) any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made by such association or body to a member of such association or body. There are three Explanations below the same. 17. We have not found from the Tribunal's order that it has taken into consideration the provisions and the wide wording thereof. It's applicability therefore, will have to be decided on the touch stone of the plain language of this provision. We do no see any discussion in the Tribunal's order on this point at all. 18. Apart from that, the Tribunal's order is confusing. In the impugned order, the Tribunal does not indicate what it means by AOP. It does not indicate as to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere raised on the assessee by ITD Cementation India Limited. These facts were checked and verified by the Assessing Officer and he found the same to be correct. However, in remand, he could not give any categorical finding, and therefore left the matter to the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals), after considering the remand report and the detailed arguments, sustained the disallowance on account of non deduction of Tax at Source by referring to Section 40(a)(ia). That is how the assessee approached the Tribunal. The assessee inter alia contended that no disallowance has been made in the assessment years 2006-2007 and 2007+2008 which assessment was framed under Section 143(3) of the IT Act. Thus, a consistent stand should be taken and similar treatment should be given to the accounts as in the preceding assessment years. The alternate argument is made and is noted in paragraph 49 of the Tribunal's order. The departmental representative referred to the remand report and thereafter supported the finding of the Commissioner of Income Tax (Appeals). There were written submissions filed by the assessee's representative. In considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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