TMI Blog2017 (11) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be treated as "as assessee-in-default" and consequently the second proviso to section 40(a)(ia) also comes into operation even though the said proviso was introduced from April 1, 2013. Thus we deem it fit and proper to admit the additional ground of appeal and remand the issue to the file of the Assessing Officer for verification as to whether the recipient of the legal fee has offered the income in its return of income for the respective financial year. Thus, grounds of appeal 5, 9 and 10 are treated as allowed for statistical purposes. Whether the provisions of section 40(a)(ia) would apply to the expenditure which is payable as on 31st March of every year and not to the amounts which is already paid during the previous yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax (Appeals) ought to have appreciated that the second proviso to section 40(a)(ia) of the Income-tax Act, 1961 is having retrospective effect. 5. The learned Commissioner of Income-tax (Appeals) ought to have appreciated that the assessee has not been regarded as assessee in default as per section 201 of the Income-tax Act, 1961 and hence no disallowance under section 40(a)(ia) can be made. 6. The appellant may add, alter or modify any other points to the grounds of appeal at any time before or at the time of hearing of the case . 2. Further, vide letter dated July 28, 2017 the assessee has raised the following additional grounds of appeal : 7. As per the ratio laid down by the hon'ble Supreme Court of India in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the grounds of appeal at any time before or at the time of hearing of the appeal. 3. At the time of hearing, the learned counsel for the assessee submitted that in the additional grounds of appeal, only grounds of Appeal Nos. 10 and 11 the assessee wish to pursue and does not wish to press the other grounds of appeal. 4. Brief facts of the case are that the assessee-company engaged in the business of manufacturing and trading filed its return of income for the assessment year 2012-13 on September 29, 2012 declaring a loss of (-) ₹ 22,68,323. During the assessment proceedings under section 143(3) of the Act, the Assessing Officer observed that the assessee debited various expenses to the extent of ₹ 27,61,000 to the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax (Appeals) has failed to adjudicate the same. He therefore prayed that the issue may be remanded to the file of the Assessing Officer for verification of the assessee's claim of carry forward of loss and allow the same if it is found to be in order. 8. The learned Departmental representative, on the other hand, supported the orders of the authorities below. 9. Having regard to the rival contentions and the material on record, I find that the issue of applicability of section 40(a)(ia) when the assessee has not been treated as as assessee-in-default under section 201 of the Income-tax Act is covered in favour of the assessee by the following decisions : (a) Visu International Ltd. v. Deputy CIT (I. T. A Nos. 488 and 621/Hy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer for reconsideration and verification of the details filed by the assessee. . . 11. Further, in the case of Aditya Construction Company India Pvt. Ltd. the Tribunal has also considered the decision of the hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage P. Ltd. v. CIT [2007] 293 ITR 226 (SC), wherein it was held that if the payees have admitted the receipt of income, there is no need for the payee to deduct the TDS and in such circumstances, the assessee cannot be treated as as assessee-in-default and consequently the second proviso to section 40(a)(ia) also comes into operation even though the said proviso was introduced from April 1, 2013. 12. In the case of Visu International Ltd. (cited supra), this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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