TMI Blog2020 (11) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... COURT] that when the payee has included the amount received from the assessee in its return of income and also paid taxes on the said receipts, then there was no question of making any addition u/s. 40a(ia) of the Act for failure to deduct TDS u/s.194C. CIT(A) has also taken support from the decision in the case of M/s.Ansal Land Mark Township P.Ltd.. [ 2015 (9) TMI 79 - DELHI HIGH COURT] that as long as the payee filed return of income disclosing payment received from the payer and in which the income earned by it is embedded and also paid tax on such income, the assessee would not be attracted as person in default, consequently no disallowance can be made u/s.40a(ia) of the Act for non-deduction of TDS under section 194C of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness of manufacturing and trading in stamping and molding components filed its return of income for the assessment year 2012-13 on 30.09.2012 declaring loss of ₹ 4,42,45,209/-. The case was taken up for scrutiny assessment and during the course of assessment proceedings, the Assessing Officer noticed that assessee has paid an amount of ₹ 2,76,67,052/- to M/s.Spectronic Plating Pvt. Ltd., however, not deducted TDS u/s.194C of the Income Tax Act (hereinafter referred to as the Act ) and hence, called upon the assessee to explain as to why expenditure incurred towards payment made to M/s.Spectronic Plating Pvt. Ltd., cannot be disallowed u/s.40a(ia) of the Act for non-deduction of TDS u/s.194C of the Act. In response, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Pvt. Ltd. Purchases gold plates directly from supplier and makes value addition and then sell goods to the assessee charging central sales tax and thus, amounts paid for purchase cannot be treated as contract payment which is subjected to provisions of TDS u/s. 194C of the Act. Further, the assessee has also made alternative submission that certificate furnished by the Chartered Accountant of the supplier proves that payee has included the amount received from the assessee and paid necessary taxes and hence, once payee has paid tax on the amount received from the assessee, the requirement of disallowance u/s.40a(ia) of the Act does not arise. In this regard, he relied upon the decision of Hon ble Supreme Court in the case of Hindustan Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er u/s.40a(ia) of the Act, as the assessee did not submit any confirmation from the payee to the effect that return of income included receipts from the assessee was filed u/s.139(1) of the Act. The learned DR further submitted that the CIT(A) has erred in allowing the appeal of the assessee on the basis of certificate issued by the payee for the assessment year 2013-14 without appreciating the fact that payment relates to assessment year 2012-13, whereas the certificate issued by the assessee pertains to assessment year 2013-14. 7. The learned A.R., on the other hand, strongly supporting the order the learned CIT(A) submitted that there is no error in the findings recorded by the learned CIT(A) in the light of various evidences filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs in the light of the decision of the Hon ble Supreme Court in the case of M/s. Hindustan Coco cola Beverage (supra) that when the payee has included the amount received from the assessee in its return of income and also paid taxes on the said receipts, then there was no question of making any addition u/s. 40a(ia) of the Act for failure to deduct TDS u/s.194C of the Act. The learned CIT(A) has also taken support from the decision of Hon ble Delhi High Court in the case of M/s.Ansal Land Mark Township P.Ltd. (supra) that as long as the payee filed return of income disclosing payment received from the payer and in which the income earned by it is embedded and also paid tax on such income, the assessee would not be attracted as person in def ..... X X X X Extracts X X X X X X X X Extracts X X X X
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