2022 (2) TMI 1190

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....as assailed the impugned order on the following grounds of appeal: "1. On the facts and in the circumstances of the case and in law that the ld. CIT(A) has erred in sustaining the addition made by the ld. Assessing Officer at Rs. 3,95,301/- u/s. 40(a)(ia) being interest paid to NBFC. 2. On the facts and in the circumstances of the case and in law, that the ld. CIT(A) has erred in sustaining the addition made by the ld. Assessing Officer at Rs. 50,000/- out of the expenses claimed towards brick, cement, murum & labour expenses. 3. The assessee craves leave to add, urge, alter, modify and withdraw any ground/grounds before or at the time of hearing of the appeal." 2. Succinctly stated, the assessee who is engaged in the business of con....

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....lay, it was submitted by the Ld. AR, that the same had occasioned, for the reason, that one of the partner of the assessee firm, viz. Shri Milind Kumar Rana had expired on 10.09.2014, as a result whereof all its business activities had remained stalled for a period of more than six months. It was submitted by the Ld. AR that as neither the other partner of the assessee firm nor the widow of the deceased partner were aware about the income tax proceedings, thus, the same had resulted to the delay in filing of the present appeal before the Tribunal. In order to buttress his aforesaid claim the Ld. AR had drawn our attention to the application filed by Smt. Anamika Rana, Wd/o Late Shri Milind Kumar Rana a/w her 'affidavit' wherein the ....

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.... AR that the solitary issue involved in the present appeal was the disallowance u/s. 40(a)(ia) of the Act of the finance charges/interest of Rs. 3,95,301/- that was paid by assessee firm to M/s. Magna Finance Ltd. Adverting to the contents of the aforesaid application, it was submitted by the Ld. AR that same was a certificate of the Chartered Accountant, dated 09.06.2016, wherein he had certified under the 'first proviso' to sub-section (1) of Section 201 of the Act that the payee, viz. M/s. Magna Finance Ltd. had duly accounted for the finance charges/interest received from the assessee firm in its return of income that was duly filed u/s. 139 of the Act and had paid the corresponding tax on the same. It was submitted by the Ld. A....

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....g the Circular No. 275/201/95- IT(B) dated 29.1.1997 issued by the Central Board of Direct Taxes (CBDT), had observed, that once it is proved that the payee had paid the taxes due on the amount in question, then, the recovery of the demand visualized u/s. 201(1) of the Act cannot be enforced against the assessee, i.e, the deductor. Backed by his aforesaid contention, it was submitted by the Ld. AR that as a perusal of the certificate of Chartered Accountant, dated 09.06.2016 (supra) proved to the hilt that the payee, viz. M/s. Magna Finance Ltd. (supra.) had duly accounted for the interest/finance charges in its return of income for the year under consideration and had paid the taxes on the said amount, therefore, the assessee cannot be hel....