M/S JOHNSON WATCH COMPANY PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

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ITA 1719/DEL/2017Status: DisposedITAT Delhi12 March 2021AY 2012-132 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that no disallowance is called for regarding the interest paid on the loan, following a jurisdictional High Court judgment. However, it declined to interfere with the disallowance of interest on late TDS deposit.

What were the facts?

The assessee paid interest on a loan for a vehicle without deducting TDS. The Assessing Officer disallowed this interest under Section 40(a)(ia). The assessee also paid interest on late deposit of TDS.

What were the issues?

Whether interest paid on a loan for a vehicle is disallowable under Section 40(a)(ia) for failure to deduct TDS. Whether interest on late deposit of TDS is to be disallowed.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI

Before: Sh. K. N. CharyDr. B. R. R. Kumar

Hearing: 24.02.2021Pronounced: 12.03.2021

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the assessee against the order of ld. CIT (A)-32, New Delhi dated 29.12.2016.

2.

Heard and perused the records.

3.

The Assessing Officer has disallowed Rs.4,23,000/- u/s 40(a)(ia) of the Income Tax Act, 1961 being the interest paid to the finance institute namely, BMW Financial Services as the assessee failed to deduct TDS.

4.

We find that the assessee has paid EMI to the finance institute on the loan raised for purchase of vehicle and the EMIs include the principle and interest pre-decided at the time of obtaining the loan which is to be repaid over a period of 3 to 7

2 Johnson Watch Company Pvt. Ltd. years as per the installment plan. During the hearing, the assessee submitted that the interest paid by the assessee has been duly accounted by the payee. Hence, owing to the judgment of the Hon’ble Jurisdictional High Court in the case of Ansal Land Mark Township Pvt. Ltd. (2015) 377 ITR 635 (Del.), we hold in principle that no disallowance is called for in such situation. The assessee is directed to submit the certificate in Form 26AS to the Assessing Officer to claim the relief.

5.

Regarding the disallowance of interest on late deposit of TDS of Rs.6,515/-, since, the decision of the ld. CIT (A) is based on the judgment in the case of Chennai Properties and Investments Ltd. 105 Taxmann 346 (Madras), we decline to interfere with the order of the ld. CIT (A).

6.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 12/03/2021.

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