TaxTMI 
TaxTMI 
2014 (10) TMI 653
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.... of business services centre and failing to appreciate that the Department has not accepted the decision of ITAT and has filed an appeal before the High Court which is pending for disposal. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the decision of Hon'ble Supreme Court in Shambhu Investments Pvt. Ltd. v/s. CIT (263 ITR 143) would not apply to the facts of the case only on the ground that the present assessee had entered into an agreement to receive the payment on account of service charges separately, whereas, in the case of Shambhu Investments Pvt. Ltd. (supra), there was no such separate agreement in connection with letting out of the house property? 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made for non-deduction of TDS on commission paid to directors u/s40(a)(ia) which had not been deducted by the assessee and which was required to be deducted u/s194H of the IT Act, within the prescribed period. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in relying on the case laws of Hon'ble ITAT, which have been challenge....
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....ekeeping. Here also in all the three years the receipts and expenditures match exactly to the last paisa. It was argued that assessee is providing, for example, telecommunication services say if assessee was charging one rupee for one fax copy and if the whole receipt for the year was Rs. 1,00,000/-, it is not possible that assessee would got the bill of Rs. 1 lakhs on its fax machine. Therefore, in view of this fact we are of the opinion that assessee has simply let out the property and the income has rightly been assessed as income from house property. However, at the same time there is a distinctive feature in the case of the assessee in comparison to the decision of the Hon'ble Supreme Court in the case of CIT vs. Shambhunath Investment Pvt. Ltd. (supra) had entered into an agreement to receive the payment on account of certain service charges separately, whereas in the case of CIT vs. Shambhunath Investment Pvt. Lid. [supra], there was no separate agreement. Therefore, we are of the opinion that it is a case wherein income from lease of premises has to be segregated from the income from services and only income from lease should be assessed as income from house property ag....
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....lowing the decision of the Special Bench of this Tribunal in the case of "Bharti Shipyard Ltd." 141 TTJ (Mum.) 129 wherein it was held that the amendment made in the section by the Finance Act, 2010 w.e.f. 01.04.10 was prospective and not retrospective. 5.1 On appeal, the assessee has relied upon the decision of Hon'ble Kolkata High Court in the case of "Virgin Creators" as well as the other decision of this Tribunal. The ld. CIT(A) deleted the disallowance made by the Assessing Officer by following the decisions relied upon by the assessee. 6. We have heard the ld. D.R. as well as the ld. A.R. and considered the relevant material on record. At the outset, we note that there is no dispute that the tax deducted at source was deposited before the due date of filing the return under section 139(1) of the Income Tax Act. In the recent decision in the case of "CIT vs. Rajinder Kumar" 362 ITR 241 the Hon'ble Delhi High Court has held that the proviso to section 40(a)(ia) as amended by the Finance Act, 2010 are free from any ambiguity and doubt and clearly support the view that the expression "said due date" in clause (A) to the proviso to unamended section refers to the time sp....
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....duction/expenditure will be allowed in the previous year notwithstand- ing the main section. The section as well as the proviso before the amend- ment in 2010 had ambiguities and doubts. The proviso, as amended by the Finance Act, 2008, with retrospective effect from April 1, 2005, was not free from interpretative difficulties and problems. This aspect is highlighted above. The intention behind section 40(a)(ia) is to ensure that TDS is deducted and paid. The object of introduction of section 40(a)(ia) is to ensure that TDS provisions are scrupulously implemented without default in order to augment recoveries. It is not to penalise an assessee when pay- ment has been made within the time stated. Failure to deduct TDS or deposit TDS results in loss of revenue and may deprive the Government of the tax due and payable. The provision should be interpreted in a fair, just and equitable manner. It should not be interpreted in a manner which results in injustice and creates tax liabilities when TDS has been deposited/ paid and the respondent who is following the cash system of accountancy has made actual payment to the third party for services rendered. If the said object and purpose is k....
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....ded that in respect of tax exempt dividend income no borrowed fund was utilized for investing and further no expenditure has been incurred in relation to the exempt income. However, without prejudice to the contentions the assessee has given the working of disallowance under section 14A read with rule 8D at Rs. 1,38,00,000/-. The Assessing Officer did not accept the contention of the assessee as no expenditure has been incurred for earning the tax free income and made a disallowance of Rs. 1.38 crores under section 14A by applying rule 8D. The assessee challenged the action of the Assessing Officer before the CIT(A) and contended that the assessee's own fund was more than sufficient to invest in the shares and securities, therefore no disallowance is called for in respect of interest expenditure. The assessee has also contended that no expenditure has been incurred for earning the dividend income as the dividend cheques have been directly deposited in the bank accounts of the assessee. The ld. CIT(A) did not accept the contention of the assessee and also made a reference of the working submitted by the assessee for disallowance under section 14A read with rule 8D at Rs. 1.38 cr....
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....ot sustainable. He has reiterated the contention that the assessee has not incurred any expenditure for earning the dividend income. Alternatively, the ld. A.R. has submitted that the majority of the investment during the year is in the subsidiary of the assessee and therefore to the extent of the investment in the subsidiary no disallowance of amount of administrative expenses can be made under section 14A. In support of his contention he has relied upon various decisions of this Tribunal and submitted that when the Assessing Officer has not established any nexus or connection of the expenditure with the exempt income then no disallowance can be made under section 14A. 12. On the other hand, the ld. D.R. has submitted that as per the provisions of section 14A read with rule 8D if the investment is made from the common pool fund then the interest expenditure has to be apportioned as per the formula given in the rule 8D. He has relied upon the orders of the authorities below. As regards the administrative expenses, when the assessee has made investment during the year then it cannot be said that the assessee had not incurred any expenditure for earning the exempt income. The ld. D.....