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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
This appeal by the assessee is arising out of the order of CIT (A)-7, Mumbai in appeal No. CIT (A)-7/IT-194/13-14 dated 25-11-2013. The Assessment was framed by ITO-22(3)-1, Mumbai for the A.Y. 2009-10 vide order dated 18-10-2011 u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).
The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in disallowing transportation expenses for non- deduction of TDS under section 194C of the Act by invoking the provision of Section 40(a)(ia) of the Act amounting to Rs. 17,40,398/-.
Briefly stated facts are that the AO noted from the profit and loss account of the assessee that it has paid a sum of Rs. 1,09,418/- to Dayalbhai Somabhai Ahir and Rs. 16,30,988/- to Gujarat Logistics as transportation charges. According to the AO no TDS was deducted under section 194C of the Act, hence he invoking the Shri. Bhagwanbhai Movalia (HUF), provisions of section 40(a)(ia) of the Act disallowed the entire transportation charges. Aggrieved assessee preferred the appeal before CIT(A), who also confirmed the disallowance. Aggrieved, now assessee is in second appeal before Tribunal.
We have heard the rival contentions and gone through the facts and circumstance of the case. At the outset, the learned Counsel for the assessee stated that here both the payees have included these transportation receipts paid by assessee in their returns of income and paid taxes on such income. The learned Counsel for the assessee argued that in view of amount in Section 40(a)(ia) of the Act by way of insertion of second proviso by the finance Act 2012 with effect from 01-04-2013 which is held to be retrospective with effect from 01-04-2005 by Hon’ble Delhi High Court in the case of CIT v. Ansal Landmark Townships Pvt. Ltd. [2015] 377 ITR 635 (Del), once the recipients has included the transportation receipt in their income and pay taxes on such income no disallowance by invoking the provisions of section 40(a)(ia) can be made. We find that Hon’ble Delhi High Court in the case of Ansal Landmark Townships Pvt. Ltd.(supra) has clearly held the insertion of second proviso of section 40(a)(ia) of the Act by the finance Act 2012 to be retrospective with effect from 01-04-2005. Hence, this ammendment will apply to the present case which is for assessment year 2009-10. In such circumstances, we are of the view that let the matter to be restored back to the file of the AO and assessee is directed to file the following details before the AO: -
“(i) Payee has furnished his return of income under section 139.
(ii) Payee has taken into account such sum for computing income in such return of income; and (ii) Payee has paid the tax due on the income declared by him in such return of income, and the payee furnishes a certificate to this effect from an accountant in such form as may be prescribed.
Shri. Bhagwanbhai Movalia (HUF),
In view of the above, response of learned Sr. DR was asked, he fairly conceded the position. In view of the above, we restore the matter back to the file of the AO and appeal of the assessee is allowed for statistical purpose.
In the result, the appeal of assessee is allowed for statistical purpose.
Order pronounced in the open court on 17-02-2017.