ITO, WARD - 12(1), KOLKATA , KOLKATA vs. M/S. RENAULT DEVELOPERS PVT. LTD., , KOLKATA

At the time of hearing before us none appeared on behalf of the assesse inspite of issuance of notice of hearing more than one occasion and the ld. Departmental Representative (ld.DR) was present for the appellant Revenue. In the absence of any appearance by the assessee, the appeal is being disposed off ex parte qua the assesse after hearing the ld. DR for the revenue on merits in terms of Rule 24 of the ITAT Rules 1963. After hearing the ld.DR for the revenue, we note that in the impugned order of the ld. CIT(A), the ld. CIT(A) directed the AO to verify as to whether the deductee has included the interest income in its total income or not, if it is found M/s. Renault Developers P.Ltd that the deducteee has included the interest income in its total income, then no disallowance u/s. 40(a)(ia) of the Act can be made. Therefore, the ld. CIT(A) directed the AO to verify the factual position and allow the appeal of assessee for statistical purposes. We note that the issue under consideration, in assessee’s case is that whether the second proviso to section 40(a)(ia) is retrospective in nature or not. We note that co-ordinate Bench of this Tribunal has held in the case of M/s Vas Electronics, Kolkata Vs. ACIT in order dt. 24-11-2015, that the second proviso to section 40(a)(ia) of the Act is retrospective in nature. Therefore, ld. CIT(A), has rightly directed to the assessing officer to verify as to whether the deductee has included its interest income to the total income or not and if it is found that the deductee included it in its total income, no disallowance u/s. 40(a)(ia) of the Act can be made. That being so, we decline to interfere in the order of the ld. CIT(A), his order on this issue is hereby upheld and the grounds raised by the revenue are dismissed.

In the result, the appeal filed by the revenue is dismissed. Order Pronounced in the Open Court on 07-12-2018