MD EHRAR KHAN,ASANSOL vs. A.C.I.T CIR - 1,KOLKATA, ASANSOL

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ITA 999/KOL/2013Status: DisposedITAT Kolkata19 February 2016AY 2009-102 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the matter to the AO for fresh adjudication. It directed the AO to verify if payments below Rs. 50,000 per annum were made and to check if recipients of the remaining payments had included them in their income and paid taxes.

What were the facts?

The assessee claimed truck hire charges as an expense. The AO disallowed the entire amount for non-deduction of TDS under Section 194C, invoking Section 40(a)(ia). The CIT(A) confirmed the AO's action.

What were the issues?

Whether disallowance under Section 40(a)(ia) is warranted for non-deduction of TDS on truck hire charges, considering the proviso allowing deletion if the recipient has paid taxes.

Which sections of the Income-tax Act were involved?

Section 194C,Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH: KOLKATA

Before: Shri Mahavir Singh, JM & Shri M. Balaganesh, AM]

Hearing: 04.02.2016Pronounced: 19.02.2016

Per Shri Mahavir Singh, JM:

1.

This appeal by assessee is arising out of order of CIT(A), Asansol vide Appeal No. 166/CIT(A)/Asl/Cir-1/Asl/11-12 dated 19.03.2013. Assessment was framed by ACIT, circle-1, Asansol u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2009-10 vide his order dated 26.12.2011.

2.

The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in disallowing the truck hire charges amounting to Rs.6,57,22,280/- for non deduction of TDS u/s. 194C of the Act thereby invoking the provisions of section 40(a)(ia) of the Act.

3.

At the outset, ld. Counsel for the assessee before us filed complete details of payment of truck hire charges amounting to Rs.6,57,22,280/- out of which the parties to whom the payments below Rs.50,000/- per annum is to the extent of Rs.26,85,129/-. Ld. Counsel for the assessee first of all, stated that this fact of the payments are below Rs.50,000/- per annum can be verified by the AO and issue can be remitted back to the file of AO. Secondly, in respect to the balance payment of Rs.6,30,37,151/- the issue can be remitted back to the file of the AO with a direction to verify whether the recipients of the income have included the receipts as their income in the I. T. returns and paid taxes accordingly. The AO will apply the amendment by virtue of which the second proviso was inserted to section 40(a)(ia) of the Act by Finance Act, 2013, which was held to be prospective by Hon’ble Delhi High Court in the case of Ansal Land Mark Township (P) Ltd., & 161/Kol/2015, wherein it has been held as under:

Md. Ehrar Khan, AY 2009-10 “No s. 40(a)(ia) disallowance for failure to deduct TDS on payment if payee has offered amount to tax. Second Proviso to s. 40(a)(ia) inserted by Finance Act 2013 w.e.f. 1.4.2013 should be treated as curative and to have retrospective effect from 1.4.2005. ITAT praised for "thorough analysis" of the provision” In view of the above, we set aside the orders of the lower authorities and restore the matter to the file of AO for fresh adjudication in terms of the decision of Hon’ble Delhi High Court in the case of Ansal Land Mark Township (P) Ltd. cited supra wherein it is held that in case the recipients of these expenses have included the receipts in their respective returns of income filed with the department and paid taxes on the same in that case the disallowance in the hands of the assessee is to be deleted. The information regarding the recipients’ income tax particulars, their PAN etc. are to be given by the assessee to the AO. This appeal of assessee is allowed for statistical purposes.

4.

In the result, appeal of assessee is allowed for statistical purposes. Order pronounced in the open court on 19.02.2016 Sd/- Sd/- (M. Balaganesh) (Mahavir Singh) Accountant Member Judicial Member

Dated : 19th February, 2016

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