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TMI Blog2017 (12) TMI 1401X X X X Extracts X X X X X X X X Extracts X X X X ..... (Act) was passed on 25.12.2011. In the said assessment an addition of interest paid to Reliance Capital Ltd. by the assessee of Rs. 35,02,370/- was disallowed u/s 40(a)(ia) of the Act for the assessee's failure to deduct tax at source while making the payment of interest. On further appeal the Hon'ble ITAT, Kolkata set aside the addition made by the AO for a denovo consideration by the AO. 3. Pursuant to the aforesaid direction of ITAT the AO framed an order of assessment dated 20.11.2014 u/s 254/143(3) of the Act. As far as the interest paid by the assessee to Reliance Capital Ltd is concerned the plea of the assessee was that there was no obligation to deduct tax at source on the interest paid to Reliance Capital Ltd because under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption covered u/s.194A (3)(iii) of the I.T.Act,1961. This contention of the appellant is evident from the profile of the company available on website, a copy of which was submitted for your kind consideration during earlier hearing on 29.02.2016. Therefore, the Id. AO was totally unjustified in by- passing the above submission and considering the company as NBFC passed order u/s 254/143(3) of the I.T. Act, 1961 on 20.11.2014 making disallowance of Rs. 34,02,370/- u/s 40(a)(ia) which is totally unjustified and not based on facts deserves to be deleted." 6. Aggrieved by the order of CIT(A) the revenue is in appeal before the Tribunal. 7. The submission of the ld. DR was of the clause (e) of section 194A(3)(iii) of the Act covers only cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the addition u/s.40(a)(ia) of the Act should be deleted by the AO. The above submission was made in the context of the amendments to the provisions of Sec.40(a)(ia) of the Act by the Finance Act, 2012 w.e.f. 1-4-2013, whereby a second proviso was inserted which provided that if the payees have filed their return of income showing the receipts from the Assessee in their return of income than the it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee referred to in Sec.40(a)(ia) of the Act. 9. It was argued by the learned counsel for the Assessee that the Assessing Officer and first appellate authorities are vested with statutory powers u/s 133(6) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in their respective returns of income and also paid taxes on the same. To the extent the recipients from the Assessee have so included the sum in their returns of income and filed the same, no disallowance u/s.40(a)(ia) of the Act should be made by the AO. In case the recipient parties are not co-operating in providing details, the AO should be directed to call for the information u/s. 133(6) or 131 of the Act, for verification of the same. 12. The learned DR relied on the order of the CIT(A) and submitted that the benefit of the second proviso should not be allowed to the Assessee as the tax deducted at source has not been paid on or before the due date for filing the return of income u/s.139(1) of the Act. 13. We have given a very care ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turns of income and filed the same, no disallowance u/s.40(a)(ia) of the Act ought to have been sustained by the CIT(A). We therefore hold and direct that in case the recipient parties are not cooperating in providing details, the AO should call for the information u/s. 133(6) or 131 of the Act, for verification of the same. In this regard we also direct the assessee to furnish all the details of assessment particulars of the recipients of payment from the Assessee. The AO therefore should not have any difficulty in making the required verification. We therefore set aside the order of the CIT(A) to the extent to which he had sustained the order of the AO on the disallowance u/s.40(a)(ia) of the Act and remand the issue to the AO to verify w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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