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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy & Sri S.S. Viswanethra Ravi
Assessment Year : 2013-14 M/s. Chemcrown Exports Ltd………...................................…..……………….…...……..…….............Appellant 95 Park Street 2nd Floor Kolkata – 700 016 [PAN : AABCC 1681 M] Vs. Deputy Commissioner of Income Tax Circle-11(1), Kolkata......………………...…...........Respondent Appearances by: Shri Srikumar Banjerjee, FCA, appeared on behalf of the assessee. Shri C.J. Singh, JCIT Sr. D/R. appearing on behalf of the Revenue. Date of concluding the hearing : November 26th , 2018 Date of pronouncing the order : December 5th , 2018 ORDER Per J. Sudhakar Reddy, AM :- This is an appeal filed by the assessee directed against the order of the Learned Commissioner of Income Tax (Appeals)-4, Kolkata, (ld. CIT(A)) passed u/s. 250 of the Income Tax Act, 1961, (the ‘Act’), dt. 04/10/2017, for the Assessment Year 2013-14.
After hearing rival contentions, we find that Ground Nos. 1 to 3 are on the disallowance u/s 14A of the Act. The assessee has earned exempt income by way of dividend only to the tune of Rs.60,000/-. In terms of the judgement of the Hon'ble Jurisdictional High Court in the case of CIT vs. Ashika Global Securities Ltd. ITAT 100 of 2014, GA 2122 of 2014, judgment dt. 11/06/2018, the disallowance in question should be restricted to Rs.60,000/- only. The ld. Counsel for the assessee argued for the disallowance to be restricted to this amount. Hence we order accordingly. Hence Ground Nos. 1 to 3 are allowed in part.
Ground No. 4 is against the disallowance made u/s 40(a)(ia) of the Act, for non- deduction of tax at source on interest payments made.
Assessment Year : 2013-14 M/s. Chemcrown Exports Ltd 4.1. The assessee submits that the payee companies are major companies and may have discharged their tax liabilities and hence no disallowance should be made in his hands. Such generalized arguments cannot form the basis of invoking the second proviso to Section 40(a)(ia) of the Act. The undisputed fact is that the assessee is under a legal obligation to deduct tax at source from the interest paid. It is for the assessee to lead evidence and claim the benefit of the 2nd proviso to Section 40(a)(ia) of the Act. As this was not done, we find no infirmity in the order of the Assessing Officer as confirmed by the ld. CIT(A). Hence Ground No. 4 of the assessee is dismissed.
In the result, appeal of the assessee is allowed in part.
Kolkata, the 5th day of December, 2018.