TaxTMI 
TaxTMI 
2011 (11) TMI 510
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....ount of payment of interest in the absence of deduction of TDS by invoking the provisions of section 40(a)(ia) of the Act. For this, revenue raised following ground no.1: "1. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.76,797/- u/s. 40(a)(ia) of the Income Tax Act, 1961 on account of payment of interest without making TDS despite the fact that From No.15G collected from payee was not deposited in the office of CIT-1, Kolkata." 3. We have heard submissions of Ld. DR and gone through facts and circumstances of the case. We find that the Assessing Officer while completing assessment made disallowance of interest on loan amounting to Rs.76,797/- as the assessee failed ....
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....ined in section 194A no deduction of tax shall be made under the section if the payee of the interest furnished to the person responsible for paying the interest, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which the interest is to be included will be nil. Sub-section (2) provides that the person responsible for paying interest shall deliver or cause to be delivered to the CCIT or CIT one copy of the declaration submitted by the payee of the interest to the assessee on or before the seventh day of the month next following the month in which the declaration was furnished to him. If the person responsible for....
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.... interest, in the office of the CIT(TDS) as required by sub-section 2 of section 197A. Apart from this inference, there is no other evidence in their possession to hold that the declarations were not submitted by the payees of the interest to the assessee at the time when the payments were made. Without disproving the assessee's claim on the basis of other evidence, except by way of inference, it would not be fair or proper to discard the claim. The Assessing Officer has not recorded any statements from the payees of the interest to the effect that they did not file any declarations with the assessee at the appropriate time or to the effect that they filed the declarations only at the request of the assessee in September/October, 2008. In t....
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....paid towards leave travel concession/conveyance allowance. The position is stronger under section 197A which does not apply to section 192, but which provides in sub-section (1A) that if the payee of the interest has filed the prescribed form to the effect that he is not liable to pay any tax in computing his total income, the payer shall not deduct any tax. The subsection does not impose any obligation on the payer to find out the truth of the declarations filed by the payee. Even if the assessee has delayed the filing of the declarations with the office of the CIT/CCIT (TDS) within the time limit specified in subsection (2) of section 197A, that is a distinct omission or default for which a penalty is prescribed. Section 273B provides tha....
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....racted. There is no other ground taken by the income tax authorities to disallow the interest. We therefore accept the assessee's appeal and delete the disallowance of interest of Rs.7,87,291/-." Since the issue is squarely covered in favour of the assessee by the decision in the case of Vipin P. Mehta (supra), we confirm the order of CIT(A) and this issue of revenue's appeal is dismissed. 4. The next issue in this appeal of revenue is against the order of CIT(A) deleting the addition of unexplained direct expenses as the assessee failed to furnished details of expenses executed for work. For this, revenue raised following ground no.2: "2. That on the facts and circumstances of the case, the Ld. CIT(a) has erred in d....
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....n highly competitive business of corporate insurance agency. The assessee had to compete with individual insurance agents. Even a single sale requires much of man hours. The assessee had produced all the details under which expenses were incurred as required by the AO. The AO had also verified the same. The main doubt AO had found that similar expenses debited in the Profit and Loss Account and under direct expenses (professional fees). Since the appellant had two offices similar heads of expenditures may reoccur. In the scrutiny assessment of assessment year 2007-08 where a sum of Rs.85,30,295/- debited under direct expenses (professional fees) while dealing in same line of business and maintaining the books of account similar to A.Y. 2006....