ASST. COMMISSIONER OF INCOME TAX, CIRCLE-9(1)., HYDERABAD vs. JASTI SEETHAMAHALAKSHMI., HYDERABAD

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ITA 1185/HYD/2017Status: DisposedITAT Hyderabad24 January 2018AY 2012-134 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 held that the Revenue's appeal was not maintainable on two grounds: the tax effect was below the prescribed limit as per Circular No. 21/2015, and on merits, the CIT(A)'s order was correct. The cross-objection filed by the assessee was allowed for statistical purposes.

What were the facts?

The assessee paid Rs. 5,79,807/- as interest to Tata Motors Finance Ltd. without deducting TDS. The AO disallowed this amount under Section 40(a)(ia) of the Income Tax Act. The CIT(A) allowed the expenditure, holding that Section 40(a)(ia) was not applicable as the payment was not outstanding as of March 31, 2012.

What were the issues?

Whether disallowance under Section 40(a)(ia) is applicable when the payment is not outstanding at the year-end and whether the appeal is maintainable based on the tax effect.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 201(1)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” (SMC

Before: SHRI B. RAMAKOTAIAH

Heard together (2 matters)

I.T.A. No. 1185/HYD/2017
C.O. No. 35/HYD/2017

Read from the judgment's own cause title. This page is filed under one of them.

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].

I.T.A. No. 1185/Hyd/2017 :- 2 -: & C.O.No. 35/Hyd/2017

2.

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.

3.

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

I.T.A. No. 1185/Hyd/2017 :- 3 -: & C.O.No. 35/Hyd/2017

against the order of CIT(A) vide Circular No.21/2015 dated 10th December, 2015, bearing F.No.279/- Misc.142/2007-ITJ(Pt).

4.

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.

5.

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

I.T.A. No. 1185/Hyd/2017 :- 4 -: & C.O.No. 35/Hyd/2017

Copy to : 1. The Asst. Commissioner of Income Tax, Circle-9(1), Hyderabad.

2.

Smt. Jasti Seethamahalakshmi, Prop: M/s. Kanaka Durga Lorry Service, Plot No. 6, Block No. 17, Auto Nagar, Hayathnagar Mandal, Hyderabad.

3.

CIT (Appeals)-7, Hyderabad.

4.

Pr.CIT-7, Hyderabad.

5.

D.R. ITAT, Hyderabad.

6.

Guard File.

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