DCIT, CIRCLE- 11(1), NEW DELHI vs. HERO MOTOCROP LTD., NEW DELHI

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ITA 3291/DEL/2018Status: DisposedITAT Delhi11 October 2021AY 2008-094 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 upheld the CIT(A)'s decision, stating that the Assessing Officer had not disputed the deposit of TDS before the due date of filing the return. Therefore, the disallowance under Section 40(a)(ia) was not justified.

What were the facts?

The Revenue appealed against the CIT(A)'s order allowing relief of Rs. 38.57 crores on expenditure. The assessee, Hero Motocorp Ltd., had claimed this expenditure, but the Assessing Officer disallowed it for not being ascertained or crystallized and for non-deduction of TDS.

What were the issues?

Whether disallowance under Section 40(a)(ia) is justified when TDS was deposited before the due date of filing the return, even if the expenditure was not fully ascertained or crystallized during the year.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI

Before: MS SUCHITRA KAMBLE & SH. PRASHANT MAHARISHI

For Appellant: Ms. Sunita Singh, CIT DR
For Respondent: Adv a/w, Ms. Manisha Sharma, Adv
Hearing: 05.10.2021Pronounced: 11.10.2021

ORDER

PER SUCHITRA KAMBLE, JM

1.

This appeal is filed by the Revenue against the order dated 01/02/2018 passed by CIT (A)-42, New Delhi for assessment year 2008-09.

2.

The grounds of appeal are as under:- “Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in allowing relief of Rs. 38.57 crores on expenditure which has neither been ascertained or crystallized during the year and nor was the TDS deduced during the year.”

3. The assessee is a Public Limited Company and is engaged in the business of manufacturing and sale of two wheelers since 1984. The assessee filed return of income for the relevant Assessment Year on 26/09/2008 declaring total income of Rs. 1307,37,84,038/- under the normal provisions of Income Tax Act, 1961. The draft assessment order u/s 144C of the Act was passed on 13/6/2012 at total income of Rs. 4595,86,49,565/- after proposing various additions/disallowances. Against the said draft assessment order, the assessee filed objections before the DRP which were disposed off by the DRP vide order dated 28/3/2013 in accordance with the directions given by the DRP, the final assessment order was passed u/s 143(3) read with Section 144C of the Act on 30/05/2013. Determining the total income at Rs. 4585,87,70,541/- after making additions/disallowances amounting to Rs.3355,12,31,399/- (before deducting 2007-08 adjustment Rs.76.62 crores) to the returning amount. Against the final assessment order, the assessee filed appeal before the Tribunal which was disposed off vide order dated 13/6/2014 wherein the majority of the aforesaid additions/disallowances to be extent of Rs. 3279.25 crores were deleted by the Tribunal. Further, additions/disallowances to Rs.68.60 crores were set aside by the Tribunal to the fiel of the Assessing Officer for reconsidering the matter in light of the observations finding given in the appellate order passed by the Tribunal. The remaining additions/disallowances of Rs. 7.28 crores were confirmed by the Tribunal. The assessee filed appeal before the Hon'ble High Court which is pending. The Assessing Officer completed the assessment vide order dated 26/2/2015 passed u/s 254/143(3) thereby making additions/disallowances of Rs. 38.57 crores towards disallowances of expenditure incurred on account of provisions for advertisement expenses u/s 40A(IA) and disallowances u/s 14A towards Rs. 123.39 lakhs.

4. Being aggrieved by the assessment order u/s 254/143(3), the assessee filed before the CIT(A). The assessee CIT(A) partly allowed the appeal of the assessee.

4. The Ld. DR submitted that the CIT(A) erred in allowing relief of Rs. 38.57 crores on expenditure which has neither been ascertain or crystillsed during the year and nor was the TDS deducted during the year. The Ld. DR relied upon the assessment order.

5.

The Ld. AR relied upon the order of the CIT(A).

4.

We have heard both the parties and perused all the relevant materials available on record. The CIT(A) has given a clear cut finding in Para 5.6 and 5.7 wherein it is categorically mentioned that the Assessing Officer never disputed the fact of deposit of tax deducted at source before the due date of filing the Income Tax Return for the subject year. Therefore, the CIT(A) rightly held that once the Assessing Officer was directed to verify the amount on which tax has been paid before the due date of filing the return of income and allow the same in the first round of appeal before the Tribunal. Thus, the Assessing Officer was not right in disallowing the deduction under Section 40(a)(ia) of the Act for failure to deduct and deposit the tax at source. Hence, there is no need to interfere with the finding of the CIT(A). Hence, appeal of the Revenue is dismissed.

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