UNISON INSURANCE BROKING SERVICES PVT. LTD.,,VADODARA vs. THE DCIT, CIRCLE-2(1)(1),, BARODA

The brief fact of the case is that return of income declaring total income at Rs. 2,06,34,900/- was filed on 16th December, 2016. The case was subject to scrutiny assessment and notice u/s. 143(2) of the Act was Page No 2 Unison Insurance Broking Services Pvt. Ltd. vs. DCIT issued on 28th August, 2015. The assessment u/s. 143(3) of the Act was finalized on 16th December, 2016 and total income was determined at Rs. 2,42,17,920/-. Further facts pertaining to the issues contested in the instant appeal are discussed while adjudicating the grounds of appeal of the assessee as follows.

Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee reiterating the fact and reason for disallowance stated by the Assessing Officer.

Heard both the sides and perused the material on record. It is undisputed fact that assessee has paid employees contribution to PF and towards ESIC beyond the period prescribed in the specified act. Therefore following the decision of Hon’ble Gujarat High Court of Gujarat in the case of Gujarat State Road Transport Corporation 366 ITR 170 (Guj), we do not find any infirmity in the decision of ld. CIT(A). Therefore, this ground of appeal of the assessee is dismissed.

During the course of assessment on examination of the detail filed by the assessee, the Assessing Officer observed that assessee has not deducted any tax in respect of payment of interest made to the following parties. Sl. Name of the NBFC from Amount of Interest paid during Whether TDS deducted on No. whom loan taken the year (in Rs.) interest payment 1 Bajaj Finance Ltd. 46,405/- No 2 Tata Capital Ltd. 90,787/- No 3 Volkswagon Finance Ltd. 2,84,156/- No Total 4,21,348/-

During the course of assessment, the counsel of the assessee voluntarily agreed before the Assessing Officer for the disallowance of aforesaid interest expenditure of Rs. 4,21,348/- as the assessee has not deducted tax on the interest payment. Accordingly, the Assessing Officer has disallowed the aforesaid payment of interest expenditure u/s. 40(a)(ia) of the Act.

Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.

Heard both the sides and perused the material on record. During the year under consideration, the assessee has made interest payment to Bajaj Finance Ltd., Tata Capital Ltd. and Volkswagon Finance Ltd totaling to Rs. 4,21,348/- liable for deduction of tax u/s. 194A of the Act. The Assessing Officer has made disallowance of aforesaid interest expenditure as per provision of section 40(a)(ia) of the Act on the ground that assessee has failed to deduct tax u/s. 194 of the Act. The assessee has not furnished any Page No 4 Unison Insurance Broking Services Pvt. Ltd. vs. DCIT material to controvert the aforesaid finding of the Assessing Officer for not making compliance with the provision of section 40(a)(ia) of the Act. In addition to above, it is also noticed that counsel of the assessee has voluntarily agreed for the disallowance of interest expenditure since the assessee has failed to make compliance with the provision of section 40(a)(ia) of the Act. Keeping in view of the aforesaid undisputed facts and circumstances, we do not find any infirmity in the decision of ld. CIT(A). Therefore, this ground of appeal of the assessee is also dismissed.

In the result, the appeal of the assessee is dismissed.