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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 905/JP/2018
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 905/JP/2018 fu/kZkj.k o"kZ@Assessment Years : 2014-15 cuke M/s Shree Krishna Abodes Pvt. Ltd., The DCIT, F-6, Tirathraj Apartment, Vs. Circle-2, Jecob Road, Civil Lines, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAJCS 3346 K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri N.S. Vyas (C.A.) jktLo dh vksj ls@ Revenue by : Smt. Anuradha (JCIT) a lquokbZ dh rkjh[k@ Date of Hearing : 22/01/2019 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 23/01/2019 vkns'k@ ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Jaipur dated 28.05.2018 wherein the sole ground of appeal relates to addition U/s 40(a)(ia) of the Act on account of non-deduction of tax on payments made by the assessee.
2. Briefly, the facts of the case are that the assessee has paid interest to M/s Volkswagen Finance Pvt. Ltd. & M/s Kotak Mahindra Ltd. without deduction of tax at source. The AO invoked the provisions of Section 40(a)(ia) of the Act and has disallowed a sum of Rs. 3,23,059/- and the same was brought to tax in the hands of the assessee company.
3. On appeal, it was contended before the ld. CIT(A) that these two entities are non-banking financial companies and they have filed their respective return of income including the amount paid by the assessee and have paid the tax due on their income. In view of the same, it was submitted that the assessee has deducted and paid the tax on such sum on the date of furnishing the return by the respective payee entities and no disallowance should be made in the hands of the assessee. The ld. CIT(A) referring to the proviso to section 201 inserted w.e.f. 01.07.2012 has held that since the assessee has not submitted any certificate from a Chartered Accountant in Form No. 26A, the AO was justified in invoking the provisions of Section 40(a)(ia) of the Act and disallowance so made by the AO was confirmed.
During the course of hearing, the ld. AR reiterated the submissions made before the lower authorities. It was submitted that the assessee was facing lot of difficulties in obtaining the certificates from these companies and these NBFC companies have been filing their return of income and the same can be verified by the Department. Without prejudice, it was submitted that with lot of difficulties, the assessee has obtained a certificate from M/s Volkswagen Finance Pvt. Ltd. wherein it has confirmed the receipt of interest amounting to Rs. 2,25,816/- from the assessee company and which has been dully declared in its return of income and taxes paid thereon and the disallowance so made by the Assessing Officer to that extent may be deleted. Further, reliance was placed on the Coordinate Bench decision in case of Shri Azmath ulla vs. ACIT in dated 07.06.2017 wherein it was held as under:- “6. Having held that the second proviso to section 40(a)(ia) shall have retrospective effect the question arises that if the recipients of interest in question have already considered the same for computing their income offered to tax then the disallowance u/s. 40(a)(ia) is not attracted. In this case though the assessee did not file the relevant material before the AO in this regard however, it is a fact which existed right from the beginning and the relevant details are available with the revenue regarding the income offered by these NBFCs. Therefore, in view of the facts and circumstances of the case if the certificates filed in support of the claim that the NBFCs have included this amount of interest in computation of their income offered to tax are found to be correct then the compliance u/s. 40(a)(ia) is deemed to have been made and no disallowance is called for. Therefore this issue is set aside to the record of the AO for verification of the fact that the recipient NBFCs have already taken into account the amount of interest received by them for computing the income in their return of income. In case the AO is satisfied that the NBFCs have considered this amount for computation of income in their return of income then no disallowance is called for u/s. 40(a)(ia).”
The ld. DR is heard who has submitted that since the assessee has not submitted any certificate from the respective payees before the lower authorities, there is no basis for deleting the disallowance in the hands of the assessee company. It was accordingly submitted that the order passed by the ld CIT(A) be confirmed.
We have heard the rival contentions and perused the material available on record. The second proviso to section 40(a)(ia) provides that if the recipients of interest in question have already considered the same for computing their income offered to tax then the disallowance u/s. 40(a)(ia) is not attracted. In the instant case, though the assessee did not file any certificate before the Assessing Officer, however, the fact of the matter is that a certificate has now been filed in respect of one of the entities namely M/s Volkswagen Finance Pvt. Ltd. wherein it has stated that it has included the amount of interest of Rs. 2,25,816/- in its return of income filed for A.Y. 2014-15 and has paid the taxes due thereon. Therefore, where the certificate so filed in support of the claim that the said NBFC has included this amount of interest in computation of its income offered to tax is found to be correct, then the compliance u/s. 40(a)(ia) is deemed to have been made and no disallowance is called for. Therefore this issue is set aside to the record of the AO for verification of the fact that the recipient NBFC has already taken into account the amount of interest received by it for computing the income in its return of income. In case the AO is satisfied that the NBFC has considered this amount for computation of income in their return of income, then no disallowance is called for u/s. 40(a)(ia). In respect of other NBFC, neither any certificate nor any other details have been filed
5 M/s Shree Krishna Abodes Pvt. Ltd. vs. DCIT by the assessee therefore, in absence of the same, we are unable to accede to the contention of the ld AR that the AO can very well verify the fact that said NBFC has included the amount so paid by the assessee in its return of income. The addition so made u/s 40(a)(ia) in respect of the other NBFC is hereby confirmed. In the result, the ground is partly allowed.
In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open Court on 23/01/2019. Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 23/01/2019. *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- M/s Shree Krishna Abodes Pvt. Ltd., Jaipur. 2. izR;FkhZ@ The Respondent- DCIT, Circle-2, Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत