2019 (12) TMI 868

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.... 2. All the grounds of appeal are related to the addition of Rs. 5,77,426/- made by the AO u/s 40(a)(ia) of the Act. During the assessment proceedings, the Assessing Officer (AO) found that the assessee has debited the finance charges of Rs. 38,94,493/- to the Profit & Loss a/c for the year ending 31.03.2013. The AO called for the details and bills in respect of finance charges and found that a sum of Rs. 5,77,426/- was paid to Shriram Finance Limited without deduction of tax at source(TDS). During the assessment proceedings, AO called for the explanation of the assessee as to why the finance charges should not be disallowed u/s 40(a)(ia) of the Act and the assessee submitted before the AO that though the TDS was not made, the recipient had....

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....id to non residents, but is not deemed to be assessee in default as per the first proviso to section 201, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing the return of income by the payee referred to in the proviso. The Ld.AR submitted that there was amendment to section 40(a)(i), but no amendment was made to 40(a)(ia) of the Act, however, the language used in both the sections is identically worded, hence argued that relaxation provided to the non residents is equally applicable to the residents also. Thus, argued that the benefit of deduction is to be allowed in the impugned assessment year to the assessee and it should not be postponed to the subsequent year. Accordingly, requested....

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....tant case, the payee has filed the return of income on 28.11.2013 which is relevant to the A.Y.2014-15. Therefore as rightly held by the Ld.CIT(A), the assessee is entitled to claim the benefit of second proviso in the subsequent A.Y. i.e. 2014-15, but not for the A.Y. 2013-14. The Ld.CIT(A) has clearly brought out the facts and discussed the issue in detail in his order. For the sake of clarity the relevant part of the order of the Ld.CIT(A) is extracted as under : 8.2.3. I have examined the facts of the case and the evidence filed by the assessee in the shape of Form 26A issued by M/s Shriram Transport Finance. As such, the assessee has invoked the second proviso to Sec. 40(a)(ia) of the Act in order to claim relief from the rigo....

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.... to sub-section (1) of section 201 then, for the purpose of this sub-clause, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee referred t in the said proviso." 8.2.5. As seen As seen from the emphasized portion of the statute, the stress is on the date on which the recipient/resident payee has furnished the return of income In the instant case, as per Form 26A filed, the return of income in respect of M/s Shriram Transport Finance was filed in the FY 2013-14 relevant to the AY 2014-15. The details of the same are given below : S.No. Name of the recipient of interest / deductee Date of filing the return of income 1. M/s Sh....