TMI Blog2020 (1) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... paper book by the assessee, we observe that the assessee has furnished the Form No.16, Adhar No. in respect of Pervez Jamal which could prove the identity, genuineness of the transaction. Hence, the addition of ₹ 3,00,000/- is directed to be deleted. As regards to loan creditor of Shri Narayan Sahoo, we find that the assessee has filed only bank statement of the assessee in which cash amount of ₹ 5,00,000/- has been received from Shri Narayan Sahoo. Nothing is placed on record to prove the identity and creditworthiness of the loan creditor Shri Narayan Sahoo. In view of above, we confirm the addition of ₹ 5,00,000/- and partly allow Ground No.2 of appeal. Addition u/s 40(a)(ia) - rent paid for show room AND audit fees paid - HELD THAT:- . As per the amended provision to section 40(a)(ia) by the Finance Act, 2015 w.e.f. 1.4.2015, the disallowance is restricted to 30% as against 100% made by the Assessing Officer. We find that similar issue had come up for consideration in the case of Om Sri Nilamadhab Builders Pvt Ltd [ 2019 (11) TMI 1373 - ITAT CUTTACK] we direct the AO to restrict the disallowance to 30% as against 100% made under section 40(a)(ia) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .01.2018 for the assessment year 2014-15 in the matter of assessment under section 143(3) of the Act. 2. In ITA No.169/CTK/2018, the assessee has raised the following grounds: 1. That, the Ld. Commissioner of Income Tax (appeals) is wrong in holding that the appellant had not submitted the confirmations of the sundry creditors whereas all the confirmations were enclosed in the Paper Book filed at the time of appeal hearing and therefore the confirmations of additions of ₹ 21,85,448 is wrong and liable to be deleted. 2. That, the Ld. Commissioner of Income Tax (appeals) is not correct in holding that the appellant failed to prove identity, genuineness and creditworthiness of the loan creditors namely Narayan Sahoo Pervezjamal as all the documents were filed in the Paper Book at the time of hearing and wrong in confirming the additions of ₹ 8,00,000 which is liable to be deleted. 3.That, the Ld. Commissioner of Income Tax (appeals) is wrong in confirming the additions of ₹ 4,28,100 with regard to the rent paid for show room u/s 40(a)(ia) of the Act in view of the fact that the recipients of the rent had disclosed the rental income in their re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Bagheswari Tractors 5,36,732.00 3. Maa Santoshi Agro Co. 5,44,595.70 4. Laxmipriya Subudhi 8,75,000.00 5. Dinabadnhu Behura 8,76,000.00 6. Babaji Samal 4,31,000.00 Total : ₹ 86,87,746 4. As regards remaining amount of sundry creditors of ₹ 22,07,294/- (₹ 12,08,95,040/- - ₹ 86,87,746/-), the assessee failed to produce the confirmations. Therefore, the AO treated the said amount of ₹ 22,07,294/- as income of the assessee. 5. On appeal, before the ld CIT(A), the assessee could furnish confirmation from three parties pertaining to credit balance aggregating to ₹ 21,846/-. Therefore, the ld CIT(A) restricted the disallowance to ₹ 21,85,448/-. 6. At the time of hearing, ld counsel for the assessee submitted that the assessee has filed ledger account and the confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and in the absence of purchase, sales could not have been effected. In view of above, we direct the AO to delete the addition of ₹ 21,42,479/- considering the confirmations filed by the sundry creditors as noted above out of addition of ₹ 21,85,448/- confirmed by the ld CIT(A). We find that Hon ble Allahabad High Court in the case of Panchan Dass Jain (supra) held that when the purchases and sales as also the trading result disclosed by the assessee have been accepted by the department, no addition can be made. Hence, addition of ₹ 42,969/- (₹ 21,85,448 ₹ 21,42,479) is confirmed. Ground No.1 of appeal is partly allowed. 9. Apropos Ground No.2 of appeal, ld counsel for the assessee submitted that the identity, genuineness and creditworthiness of the loan creditors namely; Narayan Sahoo of ₹ 5,00,000/- and Pervez Jamal of ₹ 3,00,000/- and all the documents were filed in the paper book at pages 46 to 56 of PB, viz; Form No.16, confirmation and Adhar Card in respect of Ashraf Jamal and bank statement of State Bank of India,PAN No. etc. in the case of the assessee. From the above, it is clearly discernible that the identity, genuin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttack in the case of Om Sri Nilamadhab Builders Pvt Ltd. vs ITO in ITA No.296/CTK/2018 for A.Y. 2014-15. 13. Ld D.R. agreed to the submission of ld A.R. of the assessee. 14. On careful consideration of the rival submissions, we find that the Assessing Officer has disallowed ₹ 4,28,100/- ₹ 47,753/- for non-deduction of tax under section 40(a)(ia) of the Act. As per the amended provision to section 40(a)(ia) by the Finance Act, 2015 w.e.f. 1.4.2015, the disallowance is restricted to 30% as against 100% made by the Assessing Officer. We find that similar issue had come up for consideration in the case of Om Sri Nilamadhab Builders Pvt Ltd (supra) by this Bench of the Tribunal, wherein, it is held as under: 9. On careful perusal of the amendment brought to the Section 40(a)(ia) of the Act by the Finance Act, 2014 w.e.f. 01.04.2015, it is clear that the intent of legislature to reduce the hardship, it is proposed that in case of non-deduction or non-payment of TDS on payments made to residents as specified in section 40(a)(ia) of the Act, the disallowance shall be restricted to 30% of the amount of expenditure claimed. The Hon ble Supreme Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. It has held the amendment inserting first proviso to be retrospective. The special leave petition from this decision of the Patna High Court was dismissed. The view of the Delhi High Court, therefore, that the first proviso to section 43B will be available only prospectively does not appear to be correct. As observed by G.P. Singh in his Principles of Statutory Interpretation, Fourth edn., page 291, It is well-settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended . In fact the amendment would not serve its object in such a situation unless it is construed as retrospective. The view, therefore, taken by the Delhi High Court cannot be sustained. 10. Respectfully following the above decisions of the Tribunal as well as Hon ble Supreme Court, we direct the AO to restrict the 100% disallowance confirmed by the CIT(A) to the extent of 30% only taking into account the actual claim of the assessee in its profit and loss account. We order accordingly. Thus, the sole ground of appeal of the assessee is partly allowed. 15. Following the precedent, we direct the AO to restrict the disallowance to 30% a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above expenses and no other evidence has been furnished to support the claim. The contention of ld counsel for the assessee is that RTO expenses have been accounted in the gross receipts of the assessee, which has not been disputed by ld DR. Hence, we delete the same and allow this ground of appeal of the assessee. 22. In the result, appeal in ITA No.169/CTK/2018 is partly allowed. 23. ITA No.371/CTK/2018 is filed by the assessee against the order dated 30.8.2018 of the ld CIT(A)-2, Bhubaneswar for the assessment year 2014-15 in the matter of penalty levied under section 271D of the Income Tax, 24. In this appeal, the grievance of the assessee is that the ld CIT(A) erred in confirming the penalty u/s.271D of the Act of ₹ 6,18,840/-. 25. Brief facts of the case are that during the course of assessment proceedings, the AO found that the assessee has obtained cash of ₹ 3,18,840/- from Samsul Rahaman, ₹ 3,00,000/- from Asraf Jamal and ₹ 3,00,000/- from Parvez Jamal. The AO noted that there was violation of the provisions of section 269SS of the Act by the assessee . The AO after getting permission from JCIT, Range-4, Bhubaneswar initiated pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee, which shows the bonafides of the assessee. As is evident from the assessment order, it reveals that the persons who have given money given to the assessee are the brother and nephew of the Managing Director of the assessee. The assessee has also filed Adhar Card of Shaikh Samsur Rahman and Ayesha Ahmad, mother of Asraf Jamal, who is nephew of the Managing partner of the assessee. The assessee has also filed passport copy of Rahman Shiak Hifzur, who is the father of Samsul Rajhaman and Ayesha Ahmad. The contention of the ld counsel for the assessee is that since the assessee has taken cash loan from the relatives, therefore, the penalty u/s.271D is not exigible. 30. Section 271D of Income Tax Act 1961 provides that if a loan or deposit is accepted in contravention of the provisions of section 269SS then a penalty equivalent to the amount of such loan or deposit may be levied by the Joint commissioner. A bare reading of section 269SS would indicate that it was introduced by the Finance Act, 1984 w.e.f. 1-4-1984. It provides that after 30.6.1984 no person shall accept any loans or deposits from any other person of ₹ 10,000/- or more (which has been enhanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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