TaxTMI 
TaxTMI 
2017 (6) TMI 1114
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....cord any basis on which he is of the view that tax is required to be deducted on MICR charges. MICR cheque clearing (MICR stands for Magnetic Ink Charter Recognition which means that the machine recognizes numeric data printed with magnetic charged ink) is being done with the help of ultraviolet rays which scans the genuineness of cheques. It appears that no human intervention is required in MICR clearing of cheques by way of examining technical data, analyzing them and making them useful for subsequent use. In fact MICR Clearance of cheque can be possible by a mechanized system only and not through human intervention keeping in view the processing of bulk cheques. Therefore, following the principle laid down by Hon'ble Supreme Court in the case of CIT vs. Bharti Cellular Ltd. (2010)234CTR(SC)146, I am of the considered opinion that no tax is required to be deducted on MICR charges and the A.O is not justified in holding that in MICR charges, technical services are attracted. Accordingly, the provisions of section 40(a)(ia) are not attracted. Similar type of disallowance has already been deleted by me in the assessment years 2007-08, 2008-09 &-2009-10. Thus this ground of appea....
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....ders of the ld. CIT(A) for both the years under consideration, grounds Nos. 1 & 2 taken by the department for both the years are rejected. 7. The next issue involved concerns the addition in respect of disallowance of depreciation on wooden partitions. The AO made disallowance by allowing depreciation @ 10%, instead of 100% as claimed. The ld. CIT(A) held the assessee to be entitled to 100% depreciation, observing that the structure in the form of wooden partition was purely a temporary wooden structure on a rented premises, giving no advantage of enduring nature; and that similar disallowances have been deleted in the assessee's own cases for A.Ys. 2005-06 to 2009-10. 8. The department contends that the expenditure was made in order to secure a long lease of a new and more suitable business premises at a lower rent; and that the assessee did not get any capital asset by spending the amount, which facts have wrongly been overlooked by the ld. CIT(A). 9. The ld. Counsel for the assessee has again placed reliance on the aforesaid Tribunal orders in the assessee's own cases. 10. Here also, the issue stands squarely covered in favour of the assessee by our orders (supra) fo....
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....h payment can be disallowed u/s. 40(a)(ia) of the Act but where tax is deducted by the assessee, even under bonafide wrong impression, under wrong provisions of TDS, the provisions of section 40(a)(ia) of the Act cannot be invoked. Here in the present case before us, the assessee has deducted tax u/s. 194C(2) of the Act and not u/s. 1941 of the Act and there is no allegation that this TDS is not deposited with the Government account. We are of the view that the provisions of section 40(a) (la) of the Act has two limbs one is where, inter alia, assessee has to deduct tax and the second where after deducting tax, inter alia, the assessee has to pay into Government Account. There is nothing in the said section to treat, inter alia, the assessee as defaulter where there is a shortfall in deduction. With regard to the shortfall, it cannot be assumed that there is a default as the deduction is not as required by or under the Act, but the facts is that this expression, 'on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction has not been paid on or before the due date specified in subsection (1) of section 139. This section 40(a....
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....cts of the case. We have perused the order of ITAT Delhi Bench in the case of Chief/Senior Manager, Oriental Bank of Commerce vs. ITO (TDS & Survey) (supra) and our earlier orders mentioned hereinabove on the identical facts. In our order in ITA No. 206 to 210(Asr)/2011 dated 24.04.2012 (PB 60- 72) in assessee's own case, especially at page 12 of the said order at PB-71), the arguments made by the Ld. DR has been dealt with, which for the sake of clarity are reproduced hereunder: "6.1. Thus, respectfully following the aforesaid order of the ITAT, Delhi Bench 'I', we dismiss the appeal filed by the Revenue by holding that the Jammu Development Authority is in exempted category where the provisions of section 194(1) are not applicable. We also hold that exception provided in section 194A(3)(iii)(f) of the Act and as per notification, the Jammu Development Authority is a creation of J & K Development Act and satisfies the condition at Entry No.39 of the said notification and we hold that no tax was deductible on accrued interest on FDRs of Jammu Development Authority with J & K Bank Ltd. Keeping in view the above discussions, we hold that no interference is called 10 for ....
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....gures for the year under consideration has not undergone any change from the earlier years. However if any disallowance is to be made the AO has to disapprove the method of accounting that he is not satisfied with the claim of the assessee For this 14A(3) empowers the AO to work out the disallowance as per prescribed method even if the assessee states that there is no expenditure to earn the exempt income. But for all this the AO is duty bound to disapprove the contention of the assessee. Now, here the appellant has offered whole of its income to tax and it has been held in earlier years that there is no related cost which can be stated to be incurred for earning such income then it is the duty of the AO to record his satisfaction before invoking Rule 8D and making additional disallowance of Rs. 2,81,04,160/- as to why he is not satisfied with the correctness of the claim of the assessee. Subsection (2) of sec.14 states that "The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with the method as may be prescribed, if the Assessing Officer, having regard to the A....
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....ee's claim; that section 14A(3) empowers the AO to work out the disallowance as per the prescribed method, even if it is stated that no expenditure was incurred to earn the exempt income; that in this case, the assessee has offered the whole of its income to tax and in the earlier years, it has been held that there is no related cost which can be said to have been incurred for earning such income; that in these facts, before invoking Rule 8D of the IT Rules and making additional disallowance, the AO was required to record his satisfaction as to the incorrectness of the claim of the assessee; that in the year under consideration, the bank had shown that the investments, from which income had been earned, stood treated as stock in trade rather than investment; that the assessee had not claimed exemption on this income; that as such, the assessee had offered its income and had not considered the income to be part of its total income; that therefore, section 14A of the Act was not applicable and it could not have been invoked; that had the assessee claimed this income exempt, it was exactly the same as in the earlier years, in which years, it was held that in view of the assessee's own....
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.... both the appeals are dismissed. ITA No. 76/Asr./2015: 24. This is assessee's appeal for A.Y. 2011-12, contending that the ld. CIT(A) is not justified in confirming the action of the Assessing Officer for making disallowance of Rs. 3,20,000/-, Rs. 28,000/-, Rs. 8,27,250/- and Rs. 65,000/- on account of professional charges and Rs. 1,11,700/- and Rs. 34,000/- in respect of courier charges claimed as expenditure by the General Department of the assessee J & K Bank during the year under consideration, though pertaining to earlier year. 25. Disallowance of Rs. 52,38,857/- on account of prior period expenditure debited to Profit & Loss account of the assessee in the year under consideration, was made by the AO. 26. The learned CIT(A), confirming the disallowance, as mentioned above, held that the liability of the expenses on account of professional fees paid, stated as booked and paid on completion of assignment or submission of report, should have been provided for in the books in F.Y. 2009-10, in the absence of which, these expenses were not allowable; and that the provisions in respect of old entries on account of courier charges should have been made in the year to which....