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TMI Blog2022 (3) TMI 1573X X X X Extracts X X X X X X X X Extracts X X X X ..... matter on facts for adjudication, we reproduce grounds challenged by the appellant in ITA No 260/RPR/2016 (AY 2010-2011) as under; "1 That Under the facts and the law, the learned Commissioner of Income Tax (Appeals) erred in maintaining the disallowance of Rs.4,43,330/- out of Rs.4,84,974/- made by the learned Assessing Officer u/s 40(a)(ia) for non-deduction of tax u/s 194A being finance charges paid to NBFCs namely M/s Shriram Transport Finance Co. Ltd Rs.2,32,274/- and M/s Tata Finance Limited Rs.2,11,046/-, rejecting the explanations filed". "Prayed that the deductees are national repute NBFCs and paying taxes and that no amount is outstanding as payable as at the end of the year. Prayed that the disallowance of Rs.4,43,330/- be deleted." "2.That under the facts and the law, the learned Commissioner of Income Tax (Appeals) further erred in not considering the Certificate of Chartered Accountant filed certifying that the finance charges paid by the appellant had been considered by deductees in Return of Income, have paid the taxes and filed the Return of Income. Prayed, the disallowance u/s 40(a)(ia) be deleted." "3.That under the facts and the law, the learned Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s thereof submitted that these additional evidences comprising of certificates obtained from a Chartered Accountant and NBFC in terms of first proviso to section 201(1) and which were filed during the course of first appellate proceedings before the Ld CIT(A) u/r 46A of the Income Tax Rules, 1962 however same were not dealt with. 6.2. Per contra, the learned departmental representative [for short "DR"] did not raise any objection to the admission of the aforesaid additional evidence. 6.3. After a thoughtful consideration, we are of the considered view, that the additional evidence would have a substantial bearing on the adjudication of the issue before us, therefore, the same merits to be admitted, thus, in terms of our aforesaid observations we admit the additional evidence placed on our record u/r 29 of the ITAT Rules, 1963 6.4. Admittedly, it is a matter of fact borne from the records that, following amount of interest / finance charges were debited without TDS u/s 194A and was subjected to 40(a)(ia) disallowances by the Ld AO, against which certificate in "Annexure-A to form 26A", from a Chartered Accountant is placed on record in terms of first proviso to section 201(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same meaning as in clause (a) of the Explanation to section 194J; (iv) "work" shall have the same meaning as in Explanation III to section 194C; 37[(v) "rent" shall have the same meaning as in clause (i) to the Explanation to section 194-I; (vi) "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;] (Empasis supplied) 6.7. The conjunctive & constructive interpretation first proviso to Section 201(1) and second provision to section 40(a)(ia) of the Act reveals that, these have been inserted to benefit the Assessee, to provide that where a person fails to deduct tax at source (TDS) on the sum paid or credited to a resident payee under certain contingencies, such person; a. Shall first be excluded from holding as the assessee in default, subject to placing on records the certificate from a chartered accountant and b. Shall then be deemed that, such person has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee. 6.8. In the aforesaid position of statute and the law laid down by the Hon'ble Delhi High Court in CIT Vs Ansel Landmark Township reported at 377 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of expenditure by the lower tax authorities was that, the some of the aforementioned expenditure were supported only by self-made vouchers in the absence of third-party evidence. 7.3. Our careful consideration of assessment records and the records of appellate proceedings transpired that, neither of the lower tax authorities had pointed any such voucher, the genuineness of the expenditure therein claimed to have been incurred by the assessee wholly and exclusively for the purpose of its business did not inspire any confidence, nor it was the case of the revenue that any part of the expenditure in question was either found to be bogus or fictitious, nor was found to have not been incurred by the assessee wholly and exclusively for the purpose of his business. Indeed, it showcased an exercise of running around the circle by both the lower tax authorities while dealing with the present case. 7.4. We neither could come across any provision in the present Income Tax Statute nor it has been brought to our notice by either parties to dispute, which subscribes vis-à-vis authorises the tax authorities to arrive at this logic of subscribing ad-hoc disallowances. Eviden ..... 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