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Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK
Before: S/SHRI N.S SAINI
This is an appeal filed by the assessee against the order of the
CIT(A)-2, Bhubaneswar dated 31.1.2017 for the assessment year 2013-
14.
Ground Nos.1 & 4 of appeal are general in nature and hence,
requires no separate adjudication by me.
In Ground No.2 of the appeal, the grievance of the assessee is that
the CIT(A) erred in confirming the addition of Rs.3,45,000/- u/s.40(a)(ia)
of the Act for non-deduction of TDS by the assessee u/s.194-I of the Act.
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I have heard the rival submissions, perused the orders of lower
authorities and materials available on record. In the instant case, the
Assessing Officer observed that the assessee has made payment of
Rs.3,45,000/- on account of rent without deducting the tax at source.
Therefore, by invoking the provisions of section 40(a)(ia) of the Act, he
disallowed Rs.3,45,000/-.
On appeal before the CIT(A), the assessee submitted that as no
outstanding amount payable at the end of the year, therefore, in view of
the decision of Visakhapatnam Bench of the Tribunal in the case of
Merilyn Shipping & Transports, 136 ITD 23 (Viskhapatnam SB) and
decision of Hon’ble Allahabad High Court in the case of Vector Shipping
Services (P) Ltd, 357 ITR 642 (All),no disallowance u/s.40(a)(ia) was
warranted.
The CIT(A) following the decision of Hon’ble H.P.High Court in the
case of Palam Gas Service vs CIT, 47 TAXMANN.COM 310(H.P), wherein,
it was held that section 40(a)(ia) was applicable both the amount which
was shown outstanding as at end the of the relevant previous year as well
as the amount paid during the previous year, dismissed the appeal of the
assessee.
Before me, ld A.R. has filed a certificate from the Chartered
Accountant to the effect that the assessee M/s. NQ Solutions India Private
Limited has paid Rs.3,45,000/- to M/s. Transoceanic towards rent
u/s.194-I of the Act, and that the payee has shown this amount of
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Rs.3,45,000/- as its income in the return of income filed for the
assessment year 2013-14 and paid due tax thereon and hence, no
disallowance u/s.40(a)(ia) of the Act was warranted in the hands of the
assessee,
Ld D.R. opposing the filing of C.A. certificate before the appellate
Tribunal for the for the first time submitted that it was an additional
evidence and the same requires verification at the Assessing Officer’s end
and hence, matter should be restored back to the file of the Assessing
Officer for verification of the same and then adjudication of the issue
afresh.
In the rejoinder, ld A.R. agreed to the above submission of ld D.R.
In view of above, I set aside the orders of lower authorities and
remand this issue back to the file of the Assessing Officer for adjudication
of the issue afresh as per law taking into consideration the C.A. certificate
filed by the assessee to evidence that the payee of the amount has shown
Rs.3,45,000/- as its income in the return of income filed and paid tax for
the same and, therefore, no disallowance u/s.40(a)(ia) of the Act was
warranted. Needless to mention here that the Assessing Officer will allow
reasonable and proper opportunity of hearing to the assessee. Hence,
this ground is allowed for statistical purposes.
In Ground No.3 of the appeal, the grievance of the assessee is that
the CIT(A) erred in confirming the addition of Rs.5,000/- on account of
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traveling & conveyance expenses made by the Assessing Officer on adhoc
basis.
I have heard the rival submissions, perused the orders of lower
authorities and materials available on record. The brief facts of the case
are that the Assessing Officer observed that the assessee has claimed
deduction on account of travelling and conveyance expenses of
Rs.36,932/- and that the expenses are supported by self made vouchers.
Therefore, he made an estimated disallowance of Rs.5000/- out of
expenses claimed by the assessee.
On appeal, the CIT(A) confirmed the action of the Assessing Officer.
Before me, ld A.R. of the assessee submitted that adhoc
disallowance made by the Assessing Officer was not sustainable and
hence, same should be deleted.
On the other hand, ld D.R. supported the orders of lower
authorities.
I find that Jaipur Bench of the Tribunal in the case of Balbir Singh
Vs ACIT (ITAT Jaipur) in ITA No.121/13 order dated 21.10.2015 has
held that it is not open for the Assessing Officer to make addition on
estimation basis without verifying that said expenses are genuine or not.
Mere fact that payments were made in cash on self-made vouchers, was
not a conclusive evidence to disallow the expenses. The Assessing Officer
had not brought on record any adverse evidence that expenses are not
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genuine. and hence, the disallowance made was not sustainable in law. I
find that in the instant case, the facts are similar to the facts which were
before the Jaipur Bench of the Tribunal in the case of Balbir Singh
(supra). Therefore, respectfully following the same, I set aside the orders
of lower authorities and delete the disallowance of Rs.5000/- made out of
travelling and conveyance expenses and allow this ground of appeal of
the assessee.
In the result, appeal filed by the assessee is partly allowed for
statistical purposes.
Order pronounced in the open court on 0/10/2017. Sd/- (N.S Saini) ACCOUNTANT MEMBER Cuttack; Dated 04 /10/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The appellant :M/s. NQ Solutions India Pt Ltd., Plot No.146, Sector-A, Zone-A, Mancheswar Industrial Estate, Bhubaneswar. 2. The Respondent. ITO, Ward 1(2), Bhubaneswar 3. The CIT(A)-2, Bhubaneswar 4. Pr.CIT-2, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//
BY ORDER,
SR.PRIVATE SECRETARY ITAT, Cuttack