K.N.S.TRANSPORTS,NAMAKKAL vs. ITO WARD 1, NAMAKKAL

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ITA 949/CHNY/2019Status: DisposedITAT Chennai04 March 2022AY 2015-163 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the payees had declared the interest income and paid taxes, the disallowance made by the AO and confirmed by the CIT(A) was unwarranted. The addition was directed to be deleted.

What were the facts?

The assessee claimed interest expenses for which TDS was not deducted. The AO disallowed 30% of these expenses, and the CIT(A) confirmed the disallowance. The assessee provided a Chartered Accountant's certificate stating that the payees had included the interest income in their returns and paid taxes.

What were the issues?

Whether disallowance of interest expenses is justified when the payees have declared the income and paid taxes, despite non-deduction of TDS by the payer.

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

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI MAHAVIR SINGHAND SHRI GIRISH AGRAWAL

Hearing: 03.03.2022Pronounced: 04.03.2022

आदेश /O R D E R PER MAHAVIR SINGH, VP: This appeal by assessee is arising out of the order of the learned Commissioner of Income Tax (Appeals), Salem in Appeal No.125/2017-18, dated 18.01.2019. The assessment was framed by the ITO, Ward-1, Namakkal for assessment year 2015-16 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’), vide order dated 28.12.2017.

1.

2 2. The short point under dispute in this appeal of assessee is as regards to disallowance of sum of Rs.4,27,801/- i.e., interest expenses made by AO and confirmed by the CIT(A) for non- deduction of TDS by invoking the provisions of section 40(a)(ia) of the Act.

3.

We have heard ld. Senior DR for the Revenue. None is present from assessee’s side. However, assessee has filed written submissions vide letter dated 28.02.2022 and stated that the appeal may be decided on the basis of above written submissions. We noted that the assessee has not deducted TDS on interest payments of the following items:- a) India Bulls Housing Finance Ltd Rs.997,183 b) Mahindra Finance Ltd Rs.428,820 Total Rs.1426003/- The AO disallowed 30% of the above interest amount of Rs.4,27,801/- and added to the returned income of the assessee. The CIT(A) confirmed the same. Now before us the assessee filed a certificate issued by Chartered Accountant i.e., certificate of accountant under first proviso to sub-section (1) of section 201 of the Income-tax Act, 1961 for certifying the furnishing of return of income, payment of tax etc., by the payee. The payee has included the above interest amount of Rs.14,26,003/- in the respective 3 returns and also disclosed a sum of Rs.6,24,725/-. The payee has taken into account the above receipt of interest and computed its taxable income and disclosed for the relevant assessment year 2015-16. Once the Chartered Accountant has certified in the relevant form, which is placed before us, we find that this addition is unwarranted and deserves to be deleted. We direct the AO accordingly.

4.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the court on 4th March, 2022 at Chennai.

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