SRI. TOBBY SIMSON,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX,CIRCLE- 6(1)(2), BANGALORE

ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal arises out of order dated 22.06.2021 passed in MP.No.6/Bang/2021. This Tribunal observed that Ground no.3 was omitted to be adjudicated while passing the original order dated 27/11/2020. This Tribunal observed that Ground nos.4-5 has been dismissed based on observation by Ld.CIT(A), which is factually incorrect.

For sake of convenience Grounds 3-5 are reproduced as under: “3. The learned CIT[A] is not justified in upholding the disallowance of Rs. 25,000/- invoking the provisions of Sec. 40[a][ia] of the Act under the facts and in the circumstances of the appellant's case. 4. The learned CIT[A] is not justified in omitting to consider the additional grounds of appeal raised by the appellant in respect of the disallowance of travelling expenses of Rs.52,07,186/- under the facts and in the circumstances of the appellant's case.

5. The learned CIT[A] is not justified in omitting to consider the additional grounds of appeal raised by the appellant in respect of the disallowance of depreciation of Rs. 7,62,135/- under the facts and in the circumstances of the appellant's case.”

2. Ground no.3: The Ld.AR submitted that during the year under consideration assessee paid Rs.25,000/- to Al Amin College of Pharmacy towards completion of study related to project SBSVA 047. The Ld.AO disallowed the said expenditure u/s.40(a)(ia) of the Act, as no TDS was deducted on it. 2.1 The Ld.CIT(A) upheld the disallowance by holding that the payment constitutes consultancy/professional charges, liable for TDS. Aggrieved by the order of Ld.CIT(A), assessee is in appeal before us. 2.2 It has been submitted that this is a onetime payment, that has not exceeds Rs.25,000/- during the year under consideration. He submitted that the said payment did not exceed the threshold limit under section 194J of the Act. 2.3 On the contrary, the Ld.Sr.DR placed reliance on the orders passed by authorities below.

We have perused the submissions advanced by both sides in light of records placed before us. 2.4 The disallowance made under section 40(a)(ia) is due to non deduction of TDS. It is also an admitted fact that the payment made by assessee to Al Amin College of Pharmacy did not exceed Rs.25,000/- during the year under consideration. The threshold limit for financial year relevant to assessment year was Rs.30,000/- under section 194J. We are therefore of the opinion that there was no liability to deduct TDS on this payment. We direct the Ld.AO to delete the disallowance made under section 40(a)(ia) of the Act. Accordingly this ground raised by assessee stands allowed.

3. Ground No 4-5: These grounds were dismissed by this Tribunal in original order, by observing that these grounds were not raised by the assessee before the Ld.CIT(A). 3.1 The Ld.Counsel submitted that assessee had filed modified grounds of appeal and additional grounds of appeal before the Ld.CIT(A). He submitted that the said application is placed at page 22 of paper book. The Ld.CITA( however did not adjudicate the same. The Ld.Counsel also submitted that the issue raised in these gounds are connected with the issue raised in ground no.2. 3.2 He submitted that the Ground no.2 has been remanded by this Tribunal in the original order dated 27.11.2020. He thus prayed for these grounds also to be remanded to the Ld.AO. 3.3 The Ld.Sr.DR did not raise any objection towards prayer by the Ld.Counsel.

3.4 We accordingly remand the issues raised in Ground 4-5 to the Ld.AO to be disposed off afresh along with Ground no.2. Accordingly these grounds stands allowed for statistical purposes. In the result appeal filed by assessee stands allowed. Order pronounced in open court on 30th November, 2021.