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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” (SMC
Before: SHRI B. RAMAKOTAIAH
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A” (SMC), HYDERABAD
BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER
I.T.A. No. 1185/HYD/2017 Assessment Year: 2012-13 The Asst. Commissioner of Smt. Jasti Seethamahalakshmi, Income Tax, Vs Prop: M/s. Kanaka Durga Lorry Circle-9(1), Service, HYDERABAD HYDERABAD [PAN: ANPPS9623R] (Appellant) (Respondent)
C.O. No. 35/HYD/2017 (in ITA No. 1185/Hyd/2017) Assessment Year: 2012-013 Smt. Jasti Seethamahalakshmi, The Asst. Commissioner of Prop: M/s. Kanaka Durga Lorry Vs Income Tax, Service, Circle-9(1), HYDERABAD HYDERABAD [PAN: ANPPS9623R] (Cross-Objector) (Respondent) For Revenue : Smt. Suman Malik, DR For Assessee : Shri M. Chandramouleswara Rao, AR
Date of Hearing : 16-01-2018 Date of Pronouncement : 24-01-2018 O R D E R
This is an appeal by Revenue against the order of the Commissioner of Income Tax (Appeals)-7, Hyderabad, dated 16-01-2017, on the issue of allowance of an amount of Rs. 5,79,807/- by the CIT(A), disallowed by AO u/s. 40(a)(ia) of the Income Tax Act [Act].
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Briefly stated facts are that assessee, proprietor of M/s. Kanaka Durga Lorry Service, paid an amount of Rs. 5,79,807/- to M/s. Tata Motors Finance Ltd., as interest. Assessing Officer (AO) disallowed the above amount on the reason that assessee has not deducted tax while paying the amount to the said Tata Finance Ltd, invoking the provisions of Section 40(a)(ia). Assessee contended before the Ld.CIT(A) that the disallowance is not warranted as the said company is not under Banking Regulation Act, 1949 and that assessee obtained a certificate that the company has declared income as per the provisions of Income Tax (11th Amendment) Rules, 2012 and Notification No. 37/2012, dt. 12-09-2012. However, Ld.CIT(A) considered that assessee has paid the amount as on 31-03-2012 and the same was not outstanding. Therefore, the provisions of Section 40(a)(ia) does not apply. He followed the decision of Special Bench of ITAT in the case of Merilyn Shipping and Transport Ltd., Vs. ACIT reported as 136 ITD 23 (SB) [16 ITR 1] (SB)(Visakha.)(Trib.). Revenue is aggrieved, hence preferred the present appeal.
The Cross-Objection by assessee, filed belatedly with 49 days delay, is in support of the Ld.CIT(A) order. In the grounds, assessee specifically contended that Revenue cannot prefer the appeal as the tax effect does not exceed Rs. 10 Lakhs and is in violation of Circular No. 21/2015 dt. 10-12-2015, as tax effect is only Rs. 1,91,336/-. The delay in filing the appeal is supported by an affidavit explaining the reasons. Therefore, the delay is condoned and Cross-Objection is admitted. As noted from the order of AO and also from the Cross-Objection raised, the tax effect is only Rs. 1,91,336/- and hence Revenue cannot prefer the appeal
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against the order of CIT(A) vide Circular No.21/2015 dated 10th December, 2015, bearing F.No.279/- Misc.142/2007-ITJ(Pt).
Not only that even on merits, as assessee has obtained certificate from the other company that the income was offered, and as the provisions of Section 201(1) have not been initiated by the AO, there is no merit in Revenue contention that the order of CIT(A) is not correct. Both on tax effect and on merits, Revenue appeal is not maintainable, hence dismissed. Cross-Objection of assessee is in support of CIT(A)’s order and considered allowed for statistical purposes.
In the result, appeal of Revenue is dismissed and Cross-Objection of assessee is allowed for statistical purposes.
Order pronounced in the open court on 24th January, 2018
Sd/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER Hyderabad, Dated 24th January, 2018 TNMM
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Copy to : 1. The Asst. Commissioner of Income Tax, Circle-9(1), Hyderabad.
Smt. Jasti Seethamahalakshmi, Prop: M/s. Kanaka Durga Lorry Service, Plot No. 6, Block No. 17, Auto Nagar, Hayathnagar Mandal, Hyderabad.
CIT (Appeals)-7, Hyderabad.
Pr.CIT-7, Hyderabad.
D.R. ITAT, Hyderabad.
Guard File.