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TMI Blog2014 (3) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is against the order of CIT(A) in making disallowances of interest payment of Rs.91,861/- for non deduction of TDS by invoking provisions of section 40(a)(ia) of the Act. For this, assessee has raised following ground No.1 :- "1. For that the learned CIT(A) was not justified in confirming addition made by the Income Tax officer for interest of Rs.91,861/- on the ground that payment of same is for without deduction of T.D.S. though the appellant had obtained form No.15G from the payee on the fact and in the circumstances of the case." 3. We have heard the rival contentions and gone through facts and circumstances of the case. We find that the AO had disallowed the interest paid to the following persons : Sl. No. Name Amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Bench of ITAT Mumbai in the case of Vipin P. Mehta vs ITO in ITA No. 3317/Mumbai vide order dated 20.5.2011, wherein it has been held as under :- "All these provisions indicate that the failure on the part of the assessee who is the payer of the interest, to filed the declarations given to him by the payees of the interest, within the time limit specified in sub-section (2) to section 197A is distinct and separate and merely because there is a failure on the part of the assessee to submit the declarations to the income-tax department within the time limit, it cannot be said that the assessee did not have declarations with him at the time when he paid the interest to the payees. That would be a separate matter and separate proof and ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. For that the learned CIT(A) should have appreciated that when the exempt (dividend) income is Rs.62807/- disallowance u/s 14A of Rs.1,21,608/- is high and excessive." 5. We find that first of all both the authorities below have erred in applying Rule 8D of the Rules read with section 14A of the Act in view of the decision of Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. vs. DCIT [2010] 328 ITR 81 (Bom.), wherein it is held that Rule 8D of the Rules as inserted by the I. T (Fifth Amendment) Rules, 2008 w.e.f. 24.3.2008 is prospective and not retrospective. Hence, it will not apply to assessment year 2006-07 as in the present case. Further, we find that the AO made the addition of Rs.1,21,608/- u/s. 14A of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d investment by observing as under :- "As per AIR information, the assessee had invested a sum of Rs.3,00,000/- on 30.06.2005 in Principal Mutual Fund. But this investment had not been shown in the books of the assessee. Sri Bavishi had submitted that the assessee had actually invested only Rs.2,00,000/- and even the date of investment was matching. This is not a sufficient evidence to refute the A.R. information. Therefore, the assessee had suppressed its investment in Principal Mutual Fund by Rs.3,00,000/-, which is added back to the total income an unexplained investment. Penalty proceedings u/s 271(1)(c) is initiated separately." Aggrieved, assessee preferred appeal before CIT(A), who also confirmed the action of AO. Aggrieved asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ously sent to the Income tax Department 30/06/2005 Cheque 109511 2,00,000.00 3,00,000.00 We had already taken adequate steps to rectify this error by submitting a supplementary AIR report to the Income Tax Department. The supplementary AIR appropriately reflects your transactions with correct values. We request you to ask the Income Tax Department to refer to the same. A copy of the provisional receipt of the supplementary return and account statement for period 2005-06 is enclosed for your reference." As assessee has got clarification from Primary Mutual Fund thereby it has been clarified that assessee has made investment of Rs.2,00,000 only and not Rs.3,00,000/- as added by the lower authorities. We feel that addition is unwarra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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