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Income Tax Appellate Tribunal, INDORE SMC BENCH, INDORE
Before: SHRI KUL BHARAT
आदेश / O R D E R
This appeal by the assessee is directed against order of the CIT(A)-I, Indore dated 03.06.2019 pertaining to the assessment year 2014-15. The assessee has raised following grounds of appeal:
“The Ld. CIT(A) has erred in maintaining the disallowance of Rs.3,08,970/- being the interest paid u/s 40a(ia) on the ground that TDS is not made. The addition is bad in law and deserves to be deleted. The second proviso to section 40a(ia0 is applicable since the 1
[ITA No.826/Ind/2019] [Sagarmal Fakir Chand payee has filed the return and has shown the interest in its return. The certificate to this effect was filed before the Ld. CIT(A). the addition maintained may please be deleted.”
The only effective ground in this appeal is against sustaining the disallowance of Rs. 3,08,970/- being the interest for not deducting tax at source.
The facts in brief are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s 143(3) of the Income Tax Act 1961(herein after referred as the ‘Act’ ) was framed vided order dated 27.11.2016. The assessing officer while framing the assessment observed that the assessee had made payment of interest to Smt.
Riya Rajat Kumar Bokadiya on 31.03.2014 for a sum of Rs.3,08,970/-, therefore, the assessing officer made addition of Rs.3,08,970/- by invoking the provision of u/s 40(a)(ia) of the Act.
[ITA No.826/Ind/2019] [Sagarmal Fakir Chand
Aggrieved against this, the assessee preferred an appeal before Ld. CIT(A), who after considering submissions sustained the addition. Now, the assessee is in further appeal before the Tribunal.
At the outset, ld. counsel for the assessee submitted that the assessing officer has disallowed the claim of the assessee for payment of interest to M/s Chambal Fertilizers & Chemicals Ltd. wrongly mentioned by the assessing officer as Smt. Riya Rajat Kumar Bokadiya. These expenses have been disallowed u/s 40(a)(ia) of the Act for non- deduction of the tax. He submitted that the said company is assessed to tax and has disclosed this income in its return and has issued a certificate to this fact. He has drawn my attention to the certificate issued by the company.
[ITA No.826/Ind/2019] [Sagarmal Fakir Chand
Ld. D.R. opposed these submissions and supported the orders of the authorities below.
I have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The contention of the assessee is that the interest was paid to the company but not to the individual as observed by the assessing officer further the said company namely M/s Chambal Fertilizers & Chemicals Ltd. has given a certificate to this effect and disclosed the income in its return of income. The assessee has also placed reliance on the decision of the Coordinate Bench in the case of ACIT vs. Pratibha Exim 22 ITJ P. 287 and also judgment of the Hon'ble Supreme Court rendered in the case of CIT vs. Calcutta Export reported in 17 SCC
Considering the case laws and the facts stated by the Ld. counsel for the assessee. I deem it proper to set aside the orders of the authorities below and restore the issue to 4
[ITA No.826/Ind/2019] [Sagarmal Fakir Chand the file of Assessing Officer to verify the contention of the assessee that the interest was paid to the company but not to individual and the said company has disclosed such interest in its return of income as per aforesaid certificate and if the facts stated by the assessee are found to be correct then the AO is hereby directed to delete the addition. Grounds raised in this appeal are allowed for statistical purposes.
The appeal filed by the assessee is allowed for statistical purposes.
Order was pronounced in the open court on 09 .03.2020.