M/S MOHAN PODDAR vs. JCIT, RANGE 2M, BILASPUR(CG)
What did the Tribunal hold?
The Tribunal restored the matter to the AO, directing the assessee to provide proof that the NBFCs included the finance charges in their income. The AO was instructed to verify this and decide the issue afresh.
What were the facts?
The assessee paid finance charges of Rs. 4,72,019/- to NBFCs without deducting TDS. The AO disallowed this amount under Section 40(a)(ia) of the Income Tax Act, which was upheld by the CIT(A).
What were the issues?
Whether disallowance under Section 40(a)(ia) is applicable when finance charges are paid to NBFCs who have offered such income in their returns.
Which sections of the Income-tax Act were involved?
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- CIT v. Ansal Housing Finance & Leasing Co. Ltd.208 citing354 ITR 180 · 2013 · HC · Read judgment
Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI N.K. BILLAIYA & SHRI RAM LAL NEGI
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:
This appeal by the Assessee is directed against the order of the Ld. CIT(A)- Bilaspur, dated 30.01.2015 pertaining to A.Y. 2010-11.
ITA No. 92/RPR/2015 2 . A.Y. 2010-11 2. The only grievance of the assessee is that the ld. CIT(A) erred in confirming the disallowance of Rs. 4,72,019/- made by the A.O. u/s. 40(a)(ia) of the Act.
The assessee is engaged in the business of Civil Contract and has obtained contract works during the year from State Government, CSIDC, Prime minister Gramin Sadak Yojana, SECL and WCL for construction of Building & Roads. The return for the year was filed on 15.10.2010 declaring total income of Rs. 75,52,120/-.
During the course of the scrutiny assessment proceedings, the A.O. noticed that the assessee has paid Rs. 4,72,019/- being finance charges to MAGMA Shrachi Finance Ltd. and Tata Capital Finance Ltd. The A.O. found that no TDS has been made on this amount. The A.O. accordingly disallowed Rs. 4,72,019/- u/s. 40(a)(ia) of the Act.
Assessee carried the matter before the ld. CIT(A) but without any success.
Before us, the ld. counsel for the assessee stated that finance charges have been paid to NBFCs who have shown the finance charges as income in their respective returns and therefore the assessee is not liable to deduct tax at source as per the amendment brought in the relevant provisions of the Act.
We have carefully considered the orders of the authorities below. There is no dispute that the finance charges have been paid to NBFC. Drawing support from the decision of the Hon’ble High Court of Delhi in the case of Ansal Housing Finance and Leasing Company Ltd. in 354 ITR 180. We deem it fit to restore the matter to the files of the A.O. The assessee is directed to furnish
ITA No. 92/RPR/2015 3 . A.Y. 2010-11 necessary details to show that the NBFCs have included the finance charges in their respective returns of income. The A.O. is directed to verify the same and decide the issue afresh as per the provisions of the law.
In the result, the appeal filed by the Assessee is treated as allowed for statistical purpose.
Order pronounced in Open Court on 16 - 04- 2018
Sd/- Sd/- (RAM LAL NEGI) (N. K. BILLAIYA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER RAIPUR: Dated 16/04/2018 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER
Sr. P.S. ITAT,Raipur
More judgments on Section 40(a)(ia)
- Rekha Agarwal, Jaipur vs ITO WD 4(1), JaipurITA 844/JPR/2025[2021-22]Status: Disposed21 Oct 2026AY 2021-22
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- J.D. Marketing, Kolkata vs ITO, Ward 37(1), KolkataITA 1493/KOL/2026[2015-2016]Status: Disposed15 Oct 2026AY 2015-2016
- J.D. Marketing, Kolkata vs ITO, Ward 37(1), KolkataITA 1492/KOL/2026[2013-2014]Status: Disposed15 Oct 2026AY 2013-2014
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