2017 (6) TMI 518

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.... "2. Notwithstanding the above said ground of appeal, the Worthy CIT(A) has erred in confirming the disallowance of Rs. 48,000/- made by the Assessing Officer on account of processing fee paid to Reliance Capital Ltd. under section 40(a)(ia) of the Income Tax Act for not deducting TDS on the said amount as per para 3.2 of the order. 3. That the Worthy CIT(A) has also erred in confirming the disallowance of hire charges paid to Reliance Capital Ltd. to the tune of Rs. 1,80,000/- and to Kotak Mahindra Prime Ltd. to the tune of Rs. 35,818/- totaling to Rs. 2,15,818/- u/s 40a(ia) of the Income Tax Act for not deducting TDS as per para 4.2 of his order." 5. The AO noticed that assessee has paid processing fee of Rs. 48,000/- ....

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....ince no TDS has been deducted, therefore, according to provisions of Section 40(a)(ia), addition was made. The ld. CIT(Appeals) confirmed the addition. 12. The ld. counsel for the assessee submitted that brand charges were paid to sister concern M/s Meera Moti Spices Pvt. Ltd. who have declared the amount in question in their return of income and paid the taxes. Therefore, when by filing Income Tax Returns and offering sum received for taxation, di sallowance would not be justified and matter may be remanded to the Assessing Officer for re-examination in view of decision of Delhi High Court in the case of CIT Vs Ansal Land Mark Township P. Ltd. reported in 377 ITR 635, in which it was held as under : "Section 40(a)(ia) of ....

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....No disallowance could be made under se 40(a)(ia)". 12 (i). The ld. DR also stated that matter may be remanded to the Assessing Officer for verification of the facts. 13. On consideration of the submissi ons of the parties, we are of the view matter requires re-consideration at the level of the Assessing Officer. The Assessing Officer shall verify the fact of payment of taxes on filing their return of income in the light of decision of the Delhi High Court in the case of CIT Vs Ansal Land Mark Township P. Ltd. supra). The Assessing Officer shall give reasonable sufficient opportunity of being heard to the assessee. 14. In the result, ground No. 7 of the appeal of the assessee is allowed for statistical purposes. ....