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Income Tax Appellate Tribunal, C/“SMC” BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI
आदेश / O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal is filed by the assessee, aggrieved by the order of the Learned Commissioner of Income Tax(A)-6, Chennai dated 31.05.2017 pertaining to assessment year 2006-07.
The main grievance of the assessee in this appeal is with regard to confirming the disallowance of `1,80,000/- under section 40(a)(ia) of the Act for the failure to deduct tax at source.
The brief facts of the case are that the assessee claimed expenditure towards payment of `1,80,000/- towards rent for the premises where the business is going on. According to assessee, the said rent was not subject to deduct tax at source. According to ld. Assessing Officer, the assessee is liable to deduct TDS so as to claim deduction. Since the assessee failed to deduct tax at source, the ld. Assessing Officer invoked the provisions of the section 40(a)(ia) of the Act and made addition of `1,80,000/-, which was confirmed by the Ld.CIT(A).
Before me, the ld.A.R submitted that the assessee has taken a property from Mr.Abdul Rahman (`1 lakh per annum) and Mrs.Aisha Beevi ( `80,000/- per annum) on 10th June, 2004. The annual rent to each party is below the amount liable for deduction of TDS. As such the assessee has not deducted TDS.
On the other hand, the ld.D.R submitted that the assessee has not placed any evidence to show that the rent was paid to two persons and it is below the amount liable for deduction of TDS.
I have heard both the parties and perused the material on record. I have gone through the lease agreement dated 10.06.2004 between Mr.Abdul Rahman & Mrs.Aisha Beevi called as Lessor, and the assessee being M/s.East West Foods Pvt Ltd., as the Lessee.
The assessee also failed a copy of ledger account towards payment of rent to two individuals separately i.e. Mr.Abdul Rahman & Mrs.Aisha Beevi, which is below the amount liable for deduction of tax at source. It was the submission of the ld.D.R is that these documents were not placed before the Ld.CIT(A) for his consideration. In view of this, I am inclined to remit the issue to the file of ld. Assessing Officer to examine the above documents and if the rent paid to these two persons is below the amount liable for deduction of tax at source, there cannot be applicability of section 40(a)(ia) of the Act. Accordingly, I am inclined to remit the issue to the file of ld. Assessing Officer for his fresh consideration.
In the result, the appeal of assessee is partly allowed for statistical purposes. Order pronounced on 22nd January, 2018.