DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1), HYDERABAD vs. ANDHRA PRADESH INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED, VIJAYAWADA

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ITA 981/HYD/2019Status: DisposedITAT Hyderabad17 August 2021AY 2007-083 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 held that the Revenue's appeal lacked merit. It relied on previous co-ordinate bench orders which accepted the assessee's arguments that the disallowance was not warranted as the recipients had accounted for and paid tax on the interest income.

What were the facts?

The Revenue appealed the deletion of a disallowance of Rs. 5 crores made on account of the assessee's failure to deduct TDS on interest expenditure. The disallowance was made under Section 40(a)(ia) of the Income Tax Act.

What were the issues?

Whether disallowance under Section 40(a)(ia) is justified when the recipient has accounted for and paid tax on the interest income, especially in light of retrospective amendments.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 192A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” : HYDERABAD

Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU

BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER Assessment Year: 2007-08 Dy.Commissioner of M/s.Andhra Pradesh Income Tax, Vs Industrial Infrastructure Circle-1(1), Corporation Limited, HYDERABAD VIJAYAWADA [PAN: AABCA9029K] (Appellant) (Respondent) For Revenue : Shri Rohit Mujumdar, DR For Assessee : Shri B.Satyanarayana Murthy, AR Date of Hearing : 07-06-2021 Date of Pronouncement : 17-08-2021 O R D E R PER S.S.GODARA, J.M. : This Revenue’s appeal for AY.2007-08 arises from the CIT(A)-1, Hyderabad’s order dated 27-03-2019 passed in case No.10040/2018-19/DCIT-1(1), Hyd/CIT(A)-1/Hyd/2018-19, in proceedings u/s.143(3) r.w.s.147 of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.

2.

The Revenue’s sole substantive grievance seeks to reverse the CIT(A)’s action deleting Section 40(a)(ia) disallowance of Rs.5 crores on account of assessee’s failure in not deducting TDS qua interest expenditure as prescribed u/s.192A of the Act.

3.

We notice from a perusal of the CIT(A)’s corresponding lower appellate discussion on the sole issue in para 8 to 8.5 that the tribunal’s orders in AY.2009-10 and 2010-11 have already been accepted the assessee’s arguments regarding the impugned 40(a)(ia) disallowance qua the interest payments made to the very entities i.e., NTPC and VIWSCO; as the case may be in view of the fact that the said recipients of the interest expenditure had already accounted for the same and stood duly assessed to this effect. Learned counsel next invited our attention that there is no dispute on the fact since the assessee had already filed all the relevant details before the Assessing Officer in remand proceedings.

4.

We have given our thoughtful consideration to the preceding rival contentions and hold that Revenue’s sole substantive grievance carrys no merit in view of the learned co-ordinate bench’s order in AYs.2009-10 and 2010-11 invoking Section 40(a)(ia) 2nd proviso inserted in the Act vide Finance Act, 2012 w.e.f.01-04-2013 held as having retrospective effects being curative in nature in CIT Vs. Ansal Landmark Townships (P) Ltd., (2016) [279 CTR 384] (Del). The Revenue’s sole substantive grievance is declined therefore.

5.

This Revenue’s appeal is dismissed.

Order pronounced in the open court on 17th August, 2021

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