ITO 13 (1)(1), MUMBAI vs. M/S NIRVANA FOOD, MUMBAI

Ms. Smita Verma representing the Department submitted that the solitary issue raised in appeal by the Revenue is against the order of CIT(A) in deleting addition of Rs. 3,95,000/-. The ld. Departmental Representative (DR) submitted that the assessee had made payment of Rs. 3,95,000/- to M/s Evershine Halley Co-op. Hsg Soc. Ltd. for use of open space. The asessee failed to deduct tax at source on the said payment, no any certificate from Chartered Accountant in Form-26A of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] was furnished by the assessee along with the return of income. The Assessing Officer (AO) disallowed assessee’s entire claim of expenditure of Rs. 3,95,000/- in respect of payment made to Housing Society. In first appellate proceedings, the CIT(A) held that the assessee has furnished certificate from the Accountant in Form-26A of the Act and deleted the addition of Rs. 3,95,000/-. The DR prayed for reversing the findings of CIT(A) and upheld the assessment order.

Submissions made by ld. DR heard, orders of authorities below examined. At the outset it is observed that the appeal of Revenue is liable to be dismissed on account of Low Tax Effect in the light of Central Board of Directors (CBDT) Circular No. 17 of 2019 dated 08.08.2019.

Even otherwise on merits, we find that the addition of Rs. 3,95,000/- is liable to be deleted as the assessee has furnished certificate from Accountant in Form-26A of the Act as envisaged under section 201(1) read with Rule 31CB(1) of the Income Tax Rules, 1962 [hereinafter referred to as ‘the Rules’] to the effect that the compensation paid by the assessee to M/s Evershine Halley Co-op. Hsg Soc. Ltd. (supra) has been offered to tax by the payee. The आअसं. 6270/मुं/2019 (िन.व.2014-15) (A.Y.2014-15)

CIT(A) after examining the facts has recorded a findings to this effect and deleted the addition. The impugned order warrants no interference.

In the result, appeal of the Revenue is dismissed.