TaxTMI 
TaxTMI 
2016 (7) TMI 1607
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....rties :- S. No. Name of the Finance Company Amount (Rs.) 1. Citicorp Finance P. Limited 6,05,675 2. SERI Finance 13,95,596 3. L & T Finance 7,60,284 4. Magna Finance 5,08,035 5. Religare Finvest Limited 6,78,264 TOTAL Rs. 39,47,854 5. Since the assessee failed to deduct TDS from the payments made to the above parties on account of interest payment, the AO made disallowance of Rs. 39,47,854/- by invoking provisions of Section 40(a)(ia) of the Act for non-deduction of TDS from the payment of interest made by the assessee. 6. Being not satisfied with the order of the AO, the assessee filed the appeal before the CIT(A). The assessee contended that since no amount was outstanding payable to the above parties as at the end of the year on 31st March, 2011, the assessee was not liable to deduct TDS from the payments made to the five parties during the year under consideration. 7. The assessee relied on the decision of Hon'ble Allahabad High Court in the case of CIT vs. Vector Shipping Service (P) Limited, (2013) 38 taxmann.com 77 (All), where the Hon'ble Allahabad High Court affirming the decision of the....
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....Syndicate, (2013) 33 taxmann.com 250 (Kol) and the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Sikandarkhan N.Tunvar, (2013) 33 taxmann.com 133 (Guj) and the CBDT Circular No. 10/DV/2013 dated 16.12.2013 confirmed the addition made by the AO holding that the term "payable" would include amounts which are paid during the previous year. The ld. Authorized Representative of the assessee has contended that the decision of Hon'ble Allahabad high Court in the case of CIT vs. Vector Shipping Service (P) Limited, (2013) 38 taxmann.com 77 (All) is in favour of the assessee where the Hon'ble High Court has held that for disallowance u/s 40(a)(ia) of the Act, the amount should be payable and not which has been paid during the year. It is contended by the ld. Authorized Representative of the assessee that when there are two contrary decisions of the High Court, none of which is of Jurisdictional High Court, then the established position of law is that the decision of the Hon'ble High Court which is in favour of the assessee should be followed. The ld. CIT(A) by not doing so has violated this settled position of law. 12. We find that recently, the Raipur....
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....ssessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee referred to in the said proviso. We find that the assessee filed certificates from the Chartered Accountants of the five payee companies before the ld. CIT(A) to contend that as the payee companies have shown the amount of interest in the return of income filed and paid due taxes thereon, therefore, in view of the second proviso to Section 40(a)(ia) of the Act, no disallowance was exigible in the case of the assessee u/s 40(a)(ia) of the Act. The ld. CIT(A) has not adjudicated on this plea of the assessee while confirming the disallowance made by the AO. We find that the Hon'ble Delhi High Court in the case of CIT vs. Ansal Land Market Township Private Limited, I.T.A.No. 160/2015 order dated 26.08.2015 has held that second proviso to Section 40(a)(ia) of the Act is declaratory and curative and has retrospective effect. Therefore, respectfully following the decision of Hon'ble Delhi High Court in the case of CIT vs. Ansal Landmark Townships Pvt.Ltd., (2015) 377 ITR 635 (Del), we hold that the disallowance cannot be made u/s 40(a)(ia) of the Act on this count ....
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....f the assessee vehemently argued and contended that before the AO, the assessee filed confirmation of the unsecured loan creditors with PAN numbers. He submitted that this is not the case where the loan creditor had refused to having advanced the amount to the assessee. The AO failed to bring on record that the amount as shown received from the loan creditor was not actually received from that creditor. It was submitted that the AO merely on the basis of findings recorded in the case of Shri Shailendra Biyani added the entire amount of loan taken to the income of the assessee. It was argued that the assessee has deducted TDS from the interest payment made to the loan creditor and deposited the same to the credit of the Central Government within due date. From the documents as filed before the AO, it was amply clear that the creditor was duly assessed to tax and that he has advanced some of money to the assessee as loan and the payment of loan amount was made through Banking channel. Therefore, without bringing any material on record to controvert the evidences filed by the assessee that disallowance made was not proper and justified. 19. On the other hand, the ld. Departmental R....