2022 (2) TMI 1193

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.... the assessee has assailed the impugned order on the following grounds of appeal: "1. That under the facts and in law, the learned Commissioner of Income Tax (Appeals) erred in holding that proceedings u/s.147 and the issue of notice u/s.148 was according to law. Prayed that re-opening of case u/s.147 and issue of notice u/s.148 is not according to law and therefore, the assessment order is void authorities below-initio and be cancelled. 2. That under the facts and the law, the learned Commissioner of Income Tax (Appeals) further erred in confirming the disallowance of Rs. 3,71,587/- made by the learned Assessing Officer u/s.40(a)(ia) for non deduction of tax on fiancé charges paid to NBFC, rejecting the explanation....

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....ing Officer, therein, upheld the disallowance made by him u/s. 40(a)(ia) of the Act and dismissed the appeal. 4. The assessee being aggrieved with the order of the CIT (Appeals) has carried the matter in appeal before us. 5. At the time of hearing of the appeal the Ld. Authorized Representative (in short 'AR') for the assessee took us through an application that was filed by the assessee for admission of additional evidence u/Rule 29 of the Income-Tax Appellate Tribunal Rules, 1962. Adverting to the contents of the aforesaid application, it was submitted by the Ld. AR that the same comprised of a certificate of a Chartered Accountant, dated 19.12.2014, wherein he had certified that the payee, i.e, M/s. Magna Fincorp Limited had duly f....

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....ce u/s.40(a)(ia) of the Act. In order to support his submission the Ld. AR had relied on the judgment of the Hon'ble Supreme Court in the case of M/s. Hindustan Coca Cola Beverages Pvt. Ltd. Vs. CIT, CA NO.3765 of 2007 dated 16.08.2007. It was submitted by the Ld. AR that the Hon'ble Apex Court in its aforesaid order had after considering the Circular No. 275/201/95- IT(B), dated 29.1.1997 issued by the Central Board of Direct Taxes (CBDT), observed, that once it is proved that the payee had paid the taxes due on the amount in question, then, 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 t....

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....l position can safely be gathered from the certificate of the Chartered Accountant, dated 19.12.2014(supra) that has been filed by the assessee before us. In our considered view, now when the aforesaid payee, viz. M/s Magna Fincorp Limited(supra) had duly accounted for the interest/finances charges in its return of income and had paid the corresponding taxes, therefore, as per the "2nd proviso" to Sec.40(a)(ia) of the Act the aforementioned amount could not have been brought within the realm of the disallowance contemplated under the said statutory provision. Apart from that, as stated by the Ld. AR, and rightly so, we find that the Hon'ble Supreme Court in the case of M/s. Hindustan Coca Cola Beverages Pvt. Ltd. (supra.), had observed,....