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TMI Blog2018 (11) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in this appeal of Revenue is against the order of CIT(A) deleting the disallowance made by AO of interest expenses amounting to Rs. 65 lacs, disallowed under section 37(1) of the Act as well as by invoking the provisions of section 40(a)(ia) of the Act for non-deduction of tax. For this Revenue has raised the following three grounds: - "whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was correct in deleting the disallowance of interest expenses of Rs. 65,00,000/- made u/s 37(1) and also u/s 40(a)(ia) of the I.T. Act, 1961 only on the ground that the payment was made in pursuance of directions of Special Court?" "whether on the facts and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has not deducted TDS and hence, disallowed under section 40(a)(ia) of the Act. Aggrieved, assessee preferred appeal before CIT(A), who allow the claim of assessee by observing in Para 6.3 to 6.4 as under : - "Ground No. 1, i.e. the major ground on the issue of disallowance of interest expenses of Rs. 65,00,000/- pertains to some penal/quasi criminal related and therefore, the AO has not allowed the same u/s.37(1) of the IT Act. On the similar issue, my predecessor has dealt at length in his order No. CIT(A)-2/IT/271/2014-15 dtd. 15.12.2016 and disposed of the grounds raised by the appellant. He had gone through the Hon'ble SpI. Court Bombay and analyzed the applicability of Sec.37(1) and Scc.40a(ia) of the Act & directed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, TDS was not done. There was no direction of the Special Court for deduction of TDS from the interest before deposing the same with the Custodian. I find from the above facts the interest is provided in the accounts on the basis of order of Special Court. As per order of Special Court the assessee was required to make full payment of interest and in case there is TDS deducted on the same, there would have been violation of court order. Similar issue has arisen one of the group companies of the assessee i.e. Sam Leasco Ltd. wherein Hon'ble Special Court has specifically directed not to deduct TDS. This issue also came up before Himachal Pradesh High Court in the case of Court on its own motion vs. H.P. State Cooperative Bank Ltd. (2014) 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of loss or injury. This Court has held that the Forum or the Commission thus had to determine that there was deficiency in service and/or misfeasance in public office and that it has resulted in loss or injury. This Court has also laid down certain other guidelines which the Forum or the Commission has to follow in future cases. 8. The National Commission disposed of the Revision filed by the Appellants with a one paragraph Order relying upon its own decision the case of Haryana Urban Development Authority v. Darsh Kumar. 9. We are informed that on 18th March, 1998 a sum of Rs. 2,26,470/- has been paid to the Respondent. As the Appellants were at fault in not developing the area for a number of years, the Commission was right ..... X X X X Extracts X X X X X X X X Extracts X X X X
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