Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, HYDERABAD “SMC” BENCH, HYDERABAD
Before: SHRI V. DURGA RAO, HON’BLE
Date of hearing : 02/12/2019. Date of pronouncement : 22/01/2020. O R D E R This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-1, Guntur, dated 10/06/2017 for the Assessment Year 2012-13.
The first ground of appeal relates to addition of Rs.11,55,870/-. In the assessment order, the Assessing Officer has observed that as seen from the balance sheet, it is noticed that the assessee is showing sundry creditors under the head ‘current liabilities’ amounting to Rs. 11,55,870/-. During the course of assessment proceedings, the assessee was asked specifically vide order sheet notings dated 04/02/2015, (Sri Venkat Ratnam Sambari) 12/02/2015 & 18/02/2015 and also in the notice issued u/sec. 142(1) dated 12/02/2015 to furnish ledger extracts of the sundry creditors along with their confirmations. In spite of number of opportunities provided, the assessee neither produced the ledger extracts nor confirmations. The assessee’s AR expressed his inability to produce the same which was recorded in the order sheet on 23/02/2015. Accordingly, sundry creditors shown by the assessee has been treated as unexplained cash credits and added to the income returned.
On appeal before the ld. CIT(A), no details were filed. Even before me, no details are filed, therefore I find no reason to interfere with the order passed by the ld. CIT(A) on this issue. Thus, this ground of appeal
raised by the assessee is dismissed.
4. The second issue involved in this appeal relates to section 40(a)(ia) of the Act.
5. Facts of the case in brief are that the assessee is debited an amount of Rs. 20,01,871/- towards interest on crane loans. During the course of assessment proceedings, the assessee was asked to furnish the details of loans and interest paid thereon and TDS made on such interest. In response, the assessee explained that the loans have been taken from Bajaj Finserv and filed the statements. When the assessee was asked to explain as no TDS (Sri Venkat Ratnam Sambari) we made on the payments to the said Bajaj Finserv and asked to explain as to why disallowance u/sec. 40(a)(ia) should not be made. The assessee explained that the EMI on crane loans taken from Bajaj Finserv was deducted from the bank account and no TDS was made on such interest payments. As the interest payments to such financial institution attracts the TDS and as the assessee failed to deduct the TDS, the interest amount of Rs.20,01,871/- debited to the profit & loss account is disallowed u/sec. 40(a)(ia) and added back to the total income of the assessee.
6. On appeal before the ld. CIT(A) it was submitted that payments made to Bajaj Finserv has been admitted as the income of the payee, hence, no disallowance can be made u/sec.40(a)(ia) of the Act. The ld. CIT(A) has not accepted the explanation of the assessee for the reason that if at all payee admitted the same as its income, it has to file a certificate from the Chartered Accountant in a prescribed form and confirmed the order of the Assessing Officer.
7. On appeal before me, ld. counsel for the assessee has submitted that issue may be remitted back to the Assessing Officer to examine whether payee has admitted the same as its income or not and accordingly it has to be decided. I find that (Sri Venkat Ratnam Sambari) request made by the assessee has to be addressed therefore I set aside the order passed by the ld. CIT(A) and remit the issue back to the Assessing Officer with a direction to examine Bajaj Finserv has included the amounts received from the assessee as its income and paid tax thereon and decide the issue in accordance with law. Thus, this ground of appeal raised by the assessee is allowed for statistical purpose.
8. In the result, appeal filed by the assessee is partly allowed for statistical purpose. Order Pronounced on this 22nd day of Jan., 2020.