M/S MOHAN PODDAR vs. JCIT, RANGE 2M, BILASPUR(CG)

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.

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

In the result, the appeal filed by the Assessee is treated as allowed for statistical purpose.