TaxTMI 
TaxTMI 
2015 (12) TMI 396
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.... and circumstances of the case and in law the learned CIT(A) erred in confirming disallowance of rent of Rs. 2,40,000/- u/s.4O(a)(ia) without appreciating the fact that the TDS of Rs. 36,720 on the above amount had been deducted and deposited on 15.05.2008 i.e. within due date stipulated u/s 200(1). The addition being bad in law the same needs to be deleted. 3. a) On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming disallowance of commission of Rs. 2,00,000/- u/s 4O(a)(ia) without appreciating the fact that the TDS was deducted on 31.03.2008 and deposited on 15.05.2008 i.e. within the due date stipulated under section 200(1). b) Also, without prejudice to the above, the learned CIT(A) erred in ignoring the fact that the commission was already paid to Mr Hardik Kothari during the previous year ended 31 March 2008 and therefore, provisions of section 40(a)(ia) would not apply as section 40(a)(ia) provides for disallowance in relation to the amounts payable and not to amounts already paid during the previous year. The addition being bad in law the same needs to be deleted. 4. On the facts and circums....
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....h amount computed the same into his income tax return and has paid the due taxes, then such an assessee will not be deemed to be an assessee in default and then no disallowance is attracted under section 40(a)(ia). He has further submitted that the said newly inserted proviso to section 40(a)(ia) is in fact clarificatory in nature and should be applied/retrospectively for the year under consideration and as such no disallowance is attracted on this issue. 4. On the other hand, the Ld. D.R. has contended that it has been specifically provided in the Act that the said proviso comes into operation w.e.f. 01.04.13 and that where the language of the section as well as the date of operation of such provisions has been mentioned specifically the courts cannot supply words to the provisions or amend the provisions to give it a different meaning and further that the newly inserted proviso under such circumstances is prospective in nature i.e. w.e.f. 01.04.13 and cannot be applied retrospectively. 5. The Ld. A.R. of the assessee has brought to our notice that the issue relating to operation of the newly inserted proviso whether prospective or retrospective in nature has already been co....
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....he view that since the second proviso to section 40(a)(ia) of the Act is held to be retrospective in operation w.e.f. 1.4.2005, similarly, Form 26A was to be filed for an assessee not to be held as an assessees in default as per proviso to section 201 of the Act. In all fairness, the assessee in the period under consideration i.e. Assessment Year 205-06 could not have contemplated that such a compliance was to be made and therefore in the interest of equity and justice we set aside the order of the learned CIT (Appeals) and remit the matter to the file of the Assessing Officer directing the Assessing Officer to consider the allowance or otherwise of the expenditure claimed amounting to Rs. 4,23,96,500; being the payments made by the assessee to Sri G. Shankar of Rs. 2,69,21,500 and to Sri Ramesh Kotiar, of Rs. 1,54,75,000 after affording the assessee adequate opportunity to file Form No.26A and only after due verification of whether the aforesaid two payees / recipients have reflected the same receipts in their books of account and have offered the some to tax. In these circumstances, we hereby set aside the order of the learned CIT (Appeals) to the file of the Assessing Officer on....
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....ove payment was nothing but method adopted by the assessee for diversion of taxable profits. The Ld. CIT(A), however, observed that the ledger account of Mr. Hardik Kothari showed a commission of Rs. 1,79,400/- only and there was no further credit for the salary shown in his name of Rs. 1,50,000/-. He, therefore, observed that no salary had been paid to Mr. Hardik Kothari of an amount of Rs. 1,50,000/-. He, therefore, disallowed the entire amount of Rs. 1,50,000/- as the same was not reflected in the ledger account. The Ld. A.R. of the assessee, before us, has invited our attention to page 15 of the paper book which is a letter dated 18.08.10 addressed to Commissioner of Income Tax wherein a justification has been given regarding payment of commission to Mr. Hardik Kothari and it has been explained that Mr. Hardik Kothari was son of the partner of the firm namely Mr. Viren Kothari that to encourage him for hard work, efficiency and sincerity the firm decided to offer him salary of Rs. 12,500/- and commission on sale of products. It has been explained that he has been looking after production quality and customer relationship. The Ld. A.R. has further invited our attention to the wr....