TMI Blog2022 (6) TMI 1338X X X X Extracts X X X X X X X X Extracts X X X X ..... -A Confirmed by holding that the assessee failed to bring any cogent evidence suggesting that the rent was paid to three co-owners instead of one as alleged by the AO - HELD THAT:- As regards the 1st contention of the assessee that the rent was paid to three different parties amounting to ₹1,20,000 per person and therefore there is no violation of the provisions of section 194-I read with section 40(a)(ia) of the Act, appears to be devoid of any merit. It is for the reason that, the assessee has not discharged the onus by furnishing the necessary details about the payees to whom the rent was paid. The assessee has not furnished any agreement for the rent or any other document suggesting that the rent was paid by the assessee to three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of CIT v. Vatika Township (P.) Ltd [ 2014 (9) TMI 576 - SUPREME COURT] wherein it has been observed that in case the amendment is brought to remove the hardship caused to the assessee, the same assumes the character of being clarificatory in nature. Hon'ble Tribunal upheld this contention and allowed appeal in favour of the assessee restricting disallowance to 30%. In view of the above, we hold that the disallowance on account of non- deduction of TDS should be limited to the extent of 30% of the rent expenses incurred by the assessee. Thus the ground of appeal of the assessee is partly allowed. - ITA No. 219/RJT/2018 - - - Dated:- 8-6-2022 - Shri Mahavir Prasad, Judicial Member And Shri Waseem Ahmed, Accountant Membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o down rent was outside the purview of the TDS provisions as specified under section 194-I read with section 40(a)(ia) of the Act. 4. However, the AO disagreed with the contention of the assessee on the reasoning that there was the single monthly cheque payment towards the rent amounting to ₹30,000 only. Accordingly, the AO concluded that the payment of the rent was paid to one person only. Thus the assessee was liable to deduct the TDS under the provisions of section 194-I read with section 40(a)(ia) of the Act but he failed to do so. Therefore the AO, disallowed the same and added to the total income of the assessee on account of non-deduction of TDS. 5. The assessee preferred an appeal to the learned CIT-A who also confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the contention of the assessee, we do not find any reason to interfere in the finding of the authorities below. 10. As regards the alternate contention of the assessee that the disallowance should be restricted to the tune of 30% of the rent paid under the provisions of section 40(a)(ia) read with section 194-I of the Act, we find force in the argument. The amendment was brought by the Finance Act (No. 2) 2014 effective from 1-4-2015 whereas the year before us relates to the assessment year 2012-13. The Finance Act, 2014 brought an amendment to the first proviso to the section 40(a)(ia) of the Act which reads as under - 14.4 Accordingly, Section 40(a)(ia) of the Income-tax Act has been amended to provide that in case of non-ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal No.1386 (Mum) of 2017, dated 21.05.2019], assessee contended that said provisions have been amended in order to ease the hardships caused to the assessee due to 100% disallowance of the expenditure claimed by the assessee in case of non-deduction of TDS. Assesse also submitted that it has been mentioned in the para 14.3 that withholding of taxes is a mode of collection of tax and does not result into final discharge of tax liability. Upholding this contention, Mumbai Tribunal held that - 9 .. We find merit in the contentions of the assessee that as per the amended provision of section 40(a)(ia) which is a retrospective in nature, the disallowance has to be made equal to 30% of the total disallowance as has been held in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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