TMI Blog2021 (10) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer at ₹ 1,49,86,193/-. The Revenue could not point out any error in the computation by Ld.CIT(A). Therefore, we do not see any infirmity into the finding of Ld.CIT(A), the same is hereby affirmed. Ground No.2 raised by the Revenue is, thus rejected. Short payment of TDS - CIT-A allowed claim - HELD THAT:- CIT(A) while deleting the addition has relied upon the decision in the case of CIT vs S.K.Tekriwal [ 2012 (12) TMI 873 - CALCUTTA HIGH COURT] and the case of UE Trade Corporation (India) Ltd [ 2012 (8) TMI 700 - ITAT DELHI] -The Revenue has not pointed out any contrary binding precedents therefore, we do not see any infirmity in the finding of Ld.CIT(A) and the same is hereby affirmed. - ITA No.4777/Del/2016 (Assessment Year : 2009-10) - - - Dated:- 23-8-2021 - SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER Appellant by Sh. Govind Singhal, Sr.DR Respondent by Smt. Alka Arren, Adv. ORDER PER KUL BHARAT, JM : This appeal filed by the Revenue for the assessment year 2009-10 is directed against the order of Ld. CIT(A)-7, New Delhi dated 03.06.2016. The Revenue has raised following grounds of appeal: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the Tax Audit Report s Annexure D , it was noticed that a very small amount of interest of ₹ 26,74,988/- was capitalized. It was noticed that the loans outstanding as per the balance sheet of the assessee, were secured and term loans amounting to ₹ 46,63,34,000/-. The Assessing Officer was of the view that these loans were taken to finance future assets of company. A query was raised to the assessee in this regard. In response to the query of the Assessing Officer, the assessee filed its reply vide letter dated 21.12.2011. Further, submission was made vide letter dated 23.12.2011 in this regard. The Assessing Officer however, did not accept the explanation of the assessee. He proceeded to make disallowance of interest of ₹ 1,49,86,193/- out of the total interest claimed by the assessee, as being the amount of expense which was of capital nature. As per Assessing Officer, it ought to have been capitalized alongwith work in progress as loan on which this interest had been paid, was for creation of fixed assets which was yet to be capitalized. Further, the Assessing Officer disallowed the unpaid bonus of ₹ 9,15,250/-, provision of leave encashment of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rya Industries - ₹ 11,44,415/- Details of above creditors were sought by the AO only at the fag end of assessment proceedings. 1.2 During the course of hearing before the Ld. ClT(Appeals), the assessee submitted confirmations obtained from creditors. Subsequently, a remand report was sought from the AO on the evidences [being confirmation from parties] filed by the appellant. In the remand report, the AO prayed not to accept additional evidences and failed to give any comments on the merits of the issue as well as on confirmations submitted [Para 5.3 of CIT(A) s order]. The assessee filed its response to the remand report vide reply dated 13-03-2015. 1.3 The Ld. CIT(Appeals) deleted the addition made by the AO towards balances of Symatic Engineering (P) Ltd (₹ 11,70,000/-) and Surya Industries (₹ 11,44,415/-) on the contention that the balances with respect to them are confirmed and verified and there is no basis to sustain the additions made by AO. [Para 5.5 at Pg. 4-5 of the CIT(A)'s order]. The addition on account of Clarke Energy Ltd. (₹ 2,57,41,795/-) was confirmed. 1.4 The Ld. CIT(Appeals) admitted the additional evidence on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 2,57,41,795/- which is confirmed. In so far as credit appearing in the name of M/s Symatic Engineering (P) Ltd. and Surya Industries is concerned, ledger account of the said vendors and confirmations have been duly furnished. As the balance with respect to these creditors are confirmed and verified there is no basis to sustain the additions made by the Assessing Officer with respect to these entities at ₹ 11,70,000/- and ₹ 11,44,415/- respectively, which is directed to be deleted. This ground of appeal is partly ruled in favour of the appellant. 10. It is stated on behalf of the assessee that the evidences in the form of confirmation were forwarded to the Assessing Officer for his Remand Report, therefore, due opportunity was given to the Assessing Officer. 11. Having perused the material available on record, we do not see any infirmity in the order of Ld.CIT(A) as the assessee has filed confirmation which has been verified by Ld.CIT(A) hence, Ground No.1 raised by the Revenue is dismissed. 12. Ground No.2 raised in the Revenue s appeal is against the deletion of addition of ₹ 1,47,85,097/-, the expenses which were treated as capital in nature. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - which pertains to Capital work in progress. Since ₹ 26,74,988/ - was already capitalized by the assesse, balance disallowance of ₹ 2,01,096/ - was duly confirmed. Relevant extracts of the CIT(Appeals)'s order is as under (Para 6.4, Page 9 of the CIT(A)'s order): In the light of these facts, computation made by the AD by considering the entire interest expenditure and the incorrect figure of the fixed assets and WIP is not in order. The correct computation would be as under: (Interest during the year x WIP)/WIP (1,05,40,065 x 22,69,56,000)/83,17,32,000 = ₹ 28,76,084/- As the appellant company has capitalised ₹ 26,74,988/- out of the interest payment during the year, the proportionate disallowance would work out to ₹ 2,01,096/- (28,76,084 - 26,74,988). The balance disallowance i.e. ₹ 1,49,86,193 - ₹ 2,01,096 = ₹ 1,47,85,097 is directed to be disallowed. 2.5 The CIT(Appeals) after due verification of the facts and documents, has recomputed the disallowance and granted partial relief to the assesse. Further, the error made by the AO in applying unscientific and baseless calculation of disallowance of int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WIP 1,05,40,065 x 22,69,56,000=₹ 28,76,084/- Fixed assets 83,17,32,000 6.5. As the appellant company has capitalized ₹ 26,74.988/- out of the interest payment during the year, the proportionate disallowance would work out to ₹ 2,01.096/-(28,76,084-26,74,988). The balance disallowance i.e. ₹ 1,49,86,193 - ₹ 2,01,096 = ₹ 1,47,85,097/- is directed to be deleted. This ground of appeal is partly ruled in favour of the appellant. 16. Ld.CIT(A) has pointed out that from the computation of interest disallowance, the AO had considered investment of ₹ 75,75,35,000/- against ₹ 83,17,32,000/-. This fact is not rebutted by the Revenue. It is seen that Ld.CIT(A) has computed the income at ₹ 28,76,084/- against computation made by the Assessing Officer at ₹ 1,49,86,193/-. The Revenue could not point out any error in the computation by Ld.CIT(A). Therefore, we do not see any infirmity into the finding of Ld.CIT(A), the same is hereby affirmed. Ground No.2 raised by the Revenue is, thus rejected. 17. Ground No.3 raised by the Revenue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34,402 The amount paid by QIEL has been transferred to the assessee under duly approved scheme of demerger which has been claimed by assessee as expenses in its books of accounts. See. 40(a)(ia) provides that expenditure shall be disallowed in case tax has not been deducted thereon or after deduction has not been paid. In the instant case, TDS of ₹ 17,360/- and ₹ 17,042/- on entire amount of ₹ 3,00,000/- has been duly deducted and deposited. Hence, disallowance u/ s 40(a)(ia) for expenses in the nature of reimbursements is not sustainable. 3.4 Without prejudice, Section 40(a)(ia) isn't applicable to short deduction of TDS as held in following decisions: - M/s Neemrana Hotels Pvt Ltd. -vs.- DCIT [ITA No.98/Del/2017) - UE Trade Corporation (India) Ltd -vs.- DCIT [ITA No.2303/Del/2011) (Del ITAT) - CIT -vs.- S. K. Tekriwal (ITA No. 183/Kol/V2012) (Cal HC). 20. We have heard the rival contentions and perused the material available on record. We find that the Assessing Officer made disallowance on account of short deduction of tax. As per the Assessing Officer, the assessee ought to have deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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