TaxTMI 
TaxTMI 
2015 (6) TMI 277
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....r dated 29.12.2008. 2. At the outset, ld. Counsel for the assessee stated that he is not interested in prosecuting the first issue i.e. violation of principles of natural justice by way of ground nos. 1 and 2. Hence, the same is dismissed as not pressed. 3. The first issue for adjudication relates to disallowance of internal audit fee for non deduction of TDS there by invoking the provision of section 40(a)(ia) of the Act. For this assessee has raised the following ground no.3 : "3. For that in the facts and circumstances of the case the assessing officer and the CIT Appeals erred in disallowing Rs. 48,000/- being internal audit fee by invoking the provisions of Section 40(a)(ia) of the Act 1961. Such disallowances is unwarranted, ....
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....he disallowance at Rs. 43,65,432/-. For this the assessee has raised the following ground No.4 :- "4. For that in the facts and circumstances of the case the assessing officer and the CIT Appeals erred in disallowing Rs. 43,65,432/- being interest by invoking the provisions of Section 40(a)(ia) of the Act 1961. Such disallowance is unwarranted, uncalled for and unjustified and hence the same be deleted." 7. The AO noted that assessee has debited interest on loan in the profit and loss account amounting to Rs. 47,40,432/- and assessee had produced ledger copy and admitted that no TDS has been deducted while crediting such interest. Accordingly AO disallowed the interest expenditure by invoking the provision of section 40(a)(ia) of the ....
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....properly filled up in Schedule I, II and III and even part-II of the form to be filled up by the deductor. According to CIT(A) PAN of the respective persons was not given in Form 15G. It is a fact that assessee has received Form 15G from the respective payees to whom interest has been paid by the assessee. Once the assessee has received Form 15G the onus and responsibility of the assessee is over for deducting TDS. The assessee is not liable to deduct TDS in such circumstances. This view of ours is supported by the decision of Co-ordinate Bench of Mumbai Tribunal in the case of Vipin P.Mehta in ITA No.3317/M/2010 dated 20th May, 2011 held as under :- "6. We have carefully considered the facts and the rival contentions. Section 194A provi....
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....before him the appropriate declarations in the prescribed form from the payees stating that no tax was payable by them in respect of their total income and therefore tax need not be deducted from interest under section 194A, and in the light of these declarations he had no option but to make the payment of interest without any tax deduction. If the claim is true then the contention must be accepted because under sub-section (IA) of section 197A, if such a declaration is filed by the payee of interest, no deduction of tax shall be made by the assessee. The revenue authorities have doubted the assessee's version because according to them it is only when the Assessing Officer proposed the disallowance of the interest by invoking the sectio....
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....to embark upon an enquiry as to whether the loan creditors really and in truth have no taxable income on which tax is payable. That would be putting an impossible burden on the assessee. That apart sub-section IA of Section 197A merely requires a declaration to be filed by the payee of the interest and once it is filed the payer of the interest has no choice except to desist from deducting tax from the interest. The sub-section uses the word "shall" which leaves no choice to the assessee in the matter. In the case of payment of leave travel concession and conveyance allowance to employees who are liable to deduct tax from the salary paid to the employees under section 192, the Supreme Court has held in CIT Vs. Larsen & Toubro Ltd. (2009) 31....