TMI Blog2020 (11) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... to Non-Schedule Tribes. His order on this issue is therefore upheld and the grounds of appeal of the Revenue are dismissed. Disallowance on account of non-deduction of tax at source on payments made to non-tribals as sustained by ld CIT(A) - HELD THAT:- If above payees have included the receipts in their books of accounts and have offered for taxes then the disallowance on account of non- deduction of TDS will not arise. That is, if these payees have included the receipts in computation of the total income and return of income then it would be sufficient compliance of TDS provisions and no disallowance should be made under section 40(a)(ia) of the Act. Therefore, we direct the Assessing Officer to examine whether these above noted payees had included the receipts in their books of accounts/computation of total income. If they had included the receipts in the books of accounts/ computation total income, then in that situation, no any disallowance should be made. However, if these payees did not include the receipts in their books of accounts/ computation of total income, then the Assessing Officer may make the disallowance in accordance with law. Therefore, we restore this issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) who has partly deleted the addition made by the assessing officer. The ld CIT(A) observed that assessing officer made total addition to the tune of ₹ 2,49,56,873/-, and out of said total addition, the ld CIT(A) disallowed ₹ 30,89,162/-, on account of non-deduction of tax at source on payments made to non-tribals. 5. Aggrieved by the order of theld CIT(A), the Revenue is in appeal before us and assessee also filed cross objection before us. 6. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Before us, ld Counsel reiterated the submissions made before the ld CIT(A).On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. We have gone through the submissions of the assessee and noted that no TDS should be deductible in cases of payments made to individuals who are specified a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 77,33,101/- to a Tribal resident of Meghalaya for hiring of Loader and Excavator. Rental payment of ₹ 17,57,412 was also made toother Tribal landlady/landlord. The said payments were disallowed by the AO u/s 40(a)(ia) of the Act as tax was not deducted at source by the assessee. Relying on the decision of the Hon'ble Agartala High Court in case Chandra Mohan Sinku (supra), the order of the AO was confirmed by me in my appeal order dated 18.07.2016. However, the Hon'ble Jurisdictional Tribunal reversed my order and decided the issue in favour of appellant. Relevant portion of the Hon'ble Tribunal's order is extracted as under: 7. We have heard rival submissions and perused the orders of authorities below and materials available on record. In the instant case, the undisputed facts of the case are that the assessee made payments for hiring of loader and excavator to Shri. L.S. Nongrum of ₹ 77,33,101/- without deducting tax at source u/s,194C of the Act and also made payment of land rent to Smt. Rekhila Tynsong and Shri Bhison Dohkhrat of ₹ 17,57,412/- without deduction of tax u/s 194-1 of the Act. The assessee explained before the AO th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Jurisdictional Tribunal had considered the decisions of Hon'ble Gauhati High Court in case of Sing Kiling( supra) and that of Hon'ble Agartala Higli Court in case of Chandra Mohan Sinku(supra). It had also considered a decision of Hon'ble Apex Court on the subject. A ruling had thereafter been given to the effect that payments made to persons whose income is not chargeable to tax will not invite the requirement of tax deduction at source and consequential disallowance of such payments u/s 40(a)(ia) of the Act in the event of failure to deduct tax by the payer. Considering the binding decision of Hon'ble Jurisdictional Tribunal on identical issue, disallowances of payment to tribals whose incomes are exempt u/s 10(26) is to be reversed. In respect of payment to non-tribals, assessee claim is that the recipients disclosed the payments in their respective returns of income. But no documentary evidence in this regard was filed. The non-tribals payees have to satisfy the condition laid down in first proviso to sub-section(l) of section 201. Since no evidence in this regard was furnished, the payments to non-tribals have to be disallowed. 5.3.1 In view of the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income, and the same is getting reflected in their return of income and computation of total income, therefore the assessee should be given an opportunity to produce payees or to file the computation of total income and return of income of these payees before the Assessing Officer, therefore this issue should be remitted back to the file of the Assessing Officer for fresh adjudication. 12. On the other hand, the ld. DR for the Revenue opposed the plea taken by the ld. Counsel for the assessee. 13. We have heard both the parties and perused the materials available on record. We note that out of total addition of ₹ 2,49,56,873/- the following disallowance on account of non-deduction of tax at source on payments made to non-tribals was sustained by ld CIT(A): (xi) Consultancy Charge ₹ 93,960/- (xii) Blaze Flash Carrier ₹ 2,37,050/- (xii) Vehicle Hiring Charges ₹ 15,66,579/- (xiv) Repairs maintenance ₹ 8,98,853/- (xv) Computer Hiring Charged ..... X X X X Extracts X X X X X X X X Extracts X X X X
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