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Income Tax Appellate Tribunal, “B’’ BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI & SHRI V. DURGA RAO
आदेश / O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER These two appeals by assessee are directed against different orders of Commissioner of Income Tax (Appeals)-I, Coimbatore, dated 17.11.2014 for the above assessment years. Since the issue in these two appeals is common in nature, hence these appeals are combined, I.T.A.Nos. 55 & 56/Mds/2015 :- 2 -: heard together, and disposed of by a common order for the sake of convenience.
The sole grievance of the assessee in these appeals is with regard to disallowance made u/s.40a(ia) of the Act. Since the issue is common in nature in both appeals, we consider the facts as narrated in for adjudication.
The brief facts of the case are that the assessee was carrying on fabrication of equipments and heavy structural an other custom built machineries on job order basis. The Assessing Officer disallowed a sum of �66,59,517/- being payments made by the assessee to M/s. Nachiar Steels on the ground that no TDS was made by the assessee as required u/s.194C of the Act. Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) confirmed the order of the Assessing Officer disallowing the claim made by the assessee. Against this, the assessee is in appeal before us.
We have heard both the sides and perused the material on record. We find that the Special Bench of the Tribunal in the case of Merilyn Shipping and Transports vs. ACIT (2012) 136 ITD 23 (Visakhapatnam) and judgment of Gujarat High Court in the case of CIT vs. M/s. Vector Shipping Services (P) Ltd in of 2013 dated 09.7.2013 held that sec 40(a)(ia) is not applicable when there is I.T.A.Nos. 55 & 56/Mds/2015 :- 3 -: no outstanding balance at the end of the close of the year relevant to the assessment yea in respect of these payment. However, the assessee has not brought on record, the details of outstanding expenses or schedule of sundry creditors showing whether the impugned amount is outstanding at the end of the close of the previous year relevant to the assessment year either in the name of the party or outstanding expenses. Hence, in the interest of justice, we are remitting the issue back to the file of the Assessing Officer with direction to verify the claim of the assessee and the assessee shall place necessary evidence in support of its claim.
Further, we make it clear that if the impugned amount is not outstanding at the end of the close of the assessment year in respect of the expenses either as outstanding expenses or as sundry creditors, this amount cannot be disallowed. This ground is remitted back to the Assessing Officer for fresh consideration. 6. In the result, the appeal of the assessee in ITA Nos.55 & 56/Mds/2015 are partly allowed for statistical purposes.