ITO-5(1), INDORE vs. SHRI R G PRAJAPATI, INDORE

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ITA 723/IND/2019Status: DisposedITAT Indore11 January 2021AY 2011-123 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal confirmed the CIT(A)'s order, holding that disallowing the interest payment would result in double taxation as TDS was already deducted by the payee companies. The Tribunal also upheld the deletion of an addition on account of short-term capital gains, as the amount was already offered to tax by the assessee.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting an addition of Rs. 5,19,793/- made by the AO. The AO had disallowed interest paid on a loan from an NBFC for non-deduction of TDS. The CIT(A) deleted the addition, finding that TDS was already deducted by the payee companies.

What were the issues?

Whether disallowance under Section 40(a)(ia) is justified when TDS has already been deducted by the payee? Whether an amount already offered to tax can be added again as capital gains?

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, INDORE SMC BENCH, INDORE

Before: SHRI KUL BHARAT

For Respondent: Shri Ashish Porwal, Sr. DR, Shri S.S. Deshpande, CA
Hearing: 12.11.2020

ITO-5(3), Shri Sunil Rajchandani Indore RH-211, Sanjana Park, Bicholi बनाम/ Mardana, Indore Vs. (Revenue) (Respondent ) P.A. N. – ABKPR9979C Revenue by Shri Ashish Porwal, Sr. DR Respondent by Shri S.S. Deshpande, CA Date of Hearing: 12.11.2020 Date of Pronouncement: 11 .01.2021 आदेश / O R D E R

This appeal by the Revenue is directed against the order of ld. Commissioner of Income Tax (Appeals)-II, Indore dated 01.03.2019.

2.

First ground is with regard to addition of Rs.5,19,793/- u/s 40(a)(ia) of the Act. Facts, in brief as noted by the AO are that the assessee had taken loan of Rs.43,91,524/- from NBFC. During the year the assessee had paid interest to CITI Finance at Rs.5,09,919/-

SMC – of 2019 2 Shri Sunil Rajchandani and Magma Finances at Rs.9487/- but the assessee did not made TDS on the same. Therefore, the AO added Rs.5,19,793/- to the assessee’s income.

3.

Being aggrieved, the assessee filed an appeal before the ld. CIT(A) who deleted the addition against which the revenue is in appeal before this Tribunal.

4.

Before me, the ld. Sr. DR relied upon the order of the AO. On the other hand, ld. Counsel for the assessee relied upon the order of the ld. CIT(A).

5.

I have heard rival submissions and perused the material available on record and gone through the orders of authorities below. I find that the Ld. CIT(A) recorded that the TDS had been deducted by the payee companies therefore, the deduction of tax on the same amount would be result of double taxation. This view is supported by the decision of Hon'ble Supreme Court in case of Hindustan Coca Cola Beverage P. Ltd. vs. CIT(2007) 293 ITR 226(Hon'ble Supreme Court). Before me the revenue could not controvert the finding recorded by the Ld. CIT(A) by bringing any contrary material on record. Therefore, the order of Ld. CIT(A) on ground no.1 is confirmed. Accordingly, ground no.1 is dismissed.

6.

Ground No. 2 is with regard to addition of Rs.39,365/- on account of short term capital gain. Before me, the ld. Sr. DR relied upon the order

SMC – of 2019 3 Shri Sunil Rajchandani of the AO. On the other hand, ld. Counsel for the assessee relied upon the order of the ld. CIT(A).

7.

On consideration of material available on record and rival submission, I find that the Ld. CIT(A) had categorically noted that the assessee had offered the said amount in the P & L account as income but the AO had again added the said amount which is technically wrong. Thus, I do not find any reason to interfere with the order of the Ld. CIT(A). Same is confirmed. Accordingly, ground no.2 of the appeal of the revenue is also dismissed.

8.

In result, the appeal filed by the Revenue is dismissed.

Order was pronounced in the open court on 11.01.2021.

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