THE ITO, WARD-2(1)(1), AHMEDABAD vs. M/S. EMINEMT INFRACON PVT. LTD, AHMEDABAD

(Applicant) (Responent) : None Assessee by : Shri A.P. Singh, CIT-DR Revenue by सुनवाई क� तार�ख/Date of Hearing : 13/12/2022 घोषणा क� तार�ख /Date of Pronouncement: 23 /12/2022 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the Revenue against order passed by the ld.Commissioner of Income Tax (Appeals)-2, Ahmedabad [hereinafter referred to as “the ld.CIT(A)”] dated 28.6.2019passed under section 250(6)of the Income Tax Act, 1961 [hereinafter referred to as "the Act" for short]for the Asst.Year 2013- 14.

“1. The ld.CIT(A) has erred in law and on facts in deleting the disallowance of Rs.1,97,194/- u/s.40(a)(ia) of the Act made by the AO.”

“3.3. I have carefully considered the facts of the case, assessment order and submission of the appellant. The Assessing Officer has made the addition of Rs.1,97,194/- on the ground that appellant has not deducted IDS on the processing fee of loan of Rs.1,21,00,000/- taken from India Infoline Investment Service Limited. The appellant before the Assessing Officer has submitted the copy of certificate as per Rule 31ACB to the effect that above income has been included by M/s. Infoline Investment Services Limited in its income tax return and tax has been paid on it. Appellant contended that as per decision of Honourable Delhi High Court in the case of CIT Vs. Ansal Landmark Township Limited [61 taxman.com 45] and proviso to section 201, no disallowance can be made u/s. 40(a)(ia). I agree with the submission made by the appellant, that appellant's case is covered by decision of Honourable Supreme Court in the case of Coca-Cola Beverages Pvt. Ltd..[163 Taxman 355] and decision of Honourable Delhi High Court in the case of CIT Vs. Ansal Landmark Township Limited [61 taxman.com 45],

3 The Honourable Ahmedabad Tribunal in the case of DCIT, Cir. 2(1 )(1) Vs. Esaote India (NS) Limited [2018] [96 Taxmann.com 624] has also held that if payee has included the interest income in its total income and paid taxes, no disallowance is to be made u/s. 40(a)(ia). Respectfully, following the judgments cited above, the disallowance made by Assessing Officer cannot be sustained and the same is accordingly deleted. The ground of appeal is accordingly allowed.”

6. On going through the above, it is evident that the ld.CIT(A) has noted that though the assessee had failed to deduct TDS on the impugned amount of Rs.1,97,194/-, the payee on other hand had paid taxes on the same and the assessee had filed the stipulated certificate as per Rule 31ACB of the Income Tax Rules certifying the fact of taxes have been paid by the payee (India Infoline Investment Services Ltd. in the present case) on the impugned payment. The ld.CIT(A) thereafter noted that Hon’ble Delhi High Court in the case of CIT Vs. Ansal Landmark Township Ltd., 61 taxmann.com 45 has held that in such circumstances, where taxes are shown to have been paid by the payee, no disallowance under section 40(a)(ia) of the Act was called for in the hands of the payer for default in taxes deduction at source. The ld.CIT(A) followed several other judgments laying down similar ratio,both of the Hon’ble High Courts and the ITAT, Ahmedabad Bench also as noted in para 3.3. above. The ld.DR was unable to convert this factual finding of the ld.CIT(A) that the payer in the impugned case had paid taxes on the impugned sum involved and the certificate, as per Rule 31ACB of IT Rules 1962,certifying the aforesaid fact, had been filed to the AO. He was also unable to controvert or distinguish the decision relied upon by the ld.CIT(A) in the case of Ansal Landmark Township Ltd. (supra).

7. In view of the above, we see no reason to interfere in the order of the ld.CIT(A) deleting disallowance of Rs.1,97,194/- by invoking

4 provisions of section 40(a)(ia) of the Act. The ground raised by the Revenue is dismissed.

Order pronounced in the Court on 23rd December, 2022 at Ahmedabad.