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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA (Before Sri J. Sudhakar Reddy, Accountant Member) Assessment Year: 2013-14 Carwin Trading Pvt. Ltd...................................................................................................................Appellant [PAN : AABCC 1186 H] Vs. ITO, Ward- 2(2), Kolkata.…………....................................................................................……....Respondent Appearances by: Anil Kochar, Adv., appeared on behalf of the Assessee. Sh. Jayanta Khanna, JCIT, Sr. DR, appeared on behalf of the Revenue. Date of concluding the hearing : September 24th, 2019 Date of pronouncing the order : September 27th, 2019
ORDER Per J. Sudhakar Reddy, AM :-
This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-16, Kolkata (‘CIT(A)’ for short) dated 29.03.2019 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’ for short) on the following grounds:
“1. For that the orders passed by the lower authorities are arbitrary, erroneous, without proper reasons, invalid and bad-in-law, to the extent to which they are prejudicial to the interests of the appellant.
2. For that the Ld. CIT (A) erred in confirming disallowance of Rs.4,79,174/- as made out by the A.O. u/s 14A read with Rule 8D on the alleged grounds.
3. For that there was no expenditure that could be disallowed by invoking provisions of Sec.14A ready with Rule 8D of the Act and the Ld. CIT (A) ought to have properly appreciated the submissions made before him based on facts as well as Law.
4. For that the Ld. CIT (A) erred in confirming disallowance of Rs.8,46,260/- made by the A.O. by applying provisions of Sec.40(a)(ia) on the alleged grounds.
For that the Ld. CIT (A) ought to have properly appreciated the submissions made by the appellant and ought not to have confirmed the disallowances made by the A.O. under the provisions of Sec.40(a)(ia) of the Act.
6. For that the appellant craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds.”
Assessment Year: 2013-14 Carwin Trading Pvt. Ltd.
Rival contentions heard. On a careful consideration of the facts and circumstances of the case, perusal of the papers on record, all the orders of the authorities below as well as case law cited, I hold as follows.
Ground no. 1 is general in nature.
Ground nos. 2 and 3 are against the disallowance made by the Assessing Officer (‘AO’ for short) u/s 14A r.w.s. 8D(iii) of the Act. The AO has disallowed 0.5% of the value of investments on the last of the previous year. The ld. CIT(A) confirmed the same. I do not see any reason to interfere with this finding of the ld. CIT(A). In the result these two grounds of the assessee are dismissed.
5. Ground nos. 4 and 5 are on the disallowance made u/s 40(a)(ia) of the Act. The assessee submitted before the ld. CIT(A) that the payees have taken the amount in question as income in their income while filing the return of income and that they paid taxes on the same and hence, in view of the decision of the Hon’ble Delhi High Court in the case of CIT vs. Ansal Landmark Township Pvt. Ltd. in ITA 160/2015, order dated 26.08.2015, no disallowance can be made u/s 40(a)(ia) of the Act. The ld. CIT(A) rejected this plea on the ground that no evidence had been furnished by the assessee. Before me, the ld. Counsel for the assessee demonstrated that necessary evidence has been filed before the ld. CIT(A) in the form of copies of return of income, income and expenditure account etc. of the payees in this case. In view of the above, I am of the considered opinion that the issue should be restored to the file of the AO for verification whether the payees in this case have taken into account the income in question and thereafter paid taxes thereto. If the payees have paid taxes, then no disallowance shall be made u/s 40(a)(ia) of the Act. In the result, these grounds are allowed for statistical purposes.
The last ground is general in nature.
In the result, the appeal of the assessee is allowed for statistical purposes. Kolkata, the 27th September, 2019.