TaxTMI 
TaxTMI 
2017 (10) TMI 1674
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....rcle 2(2), Mumbai [in short DCIT(OSD)], for Assessment Year 2009-10, vide order dated 13.12.2011, u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). 2. The first issue in this appeal of the Revenue is against the order of CIT (A) deleting the disallowance made by the Assessing Officer of expenses relatable to exempt income by invoking the provisions of section 14A of the Act read with Rule 8D of the Income tax Rules, 1962 (herein after referred to as Rules) on account of interest disallowance. For this Revenue has raised following ground no.2: "2. (a) "On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the addition of Rs. 9,26,983/- without apprec....
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....e 8D(2)(ii) amounting to Rs. 9,26,983/- 5. At the outset, the learned counsel for the assessee filed copies of audited accounts and financial statements for the year ended 31.03.2009 and took us through the source of funds and application of funds which are as under: (Amount in Rs) Particulars As at 31st March 2009 As at 31st March 2008 Sources of Fund Shareholders' Funds 598,81,50,200 30,81,63,039 Loan Funds 512,43,51,193 Total 1111,25,01,393 30,81,63,039 Application of Fund Fixed Assets 2213,16,446 Investments 200 28,72,12,364 Deferred Tax Assets 23,15,586 14,63,383 Net Current Assets 1079,84,83,6....
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....evenue has raised following ground no.3: 3. (a) "On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the disallowance made u/s. 40(a)(ia) for failing to deduct tax at source while making payment of administrative and general expenses ignoring the fact that such disallowance was correctly made as tax was not deducted by the assessee and therefore there was a default on its part as per the clarification (Answer No. 30) given by Board's Circular No. 715." (b) "On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in relying upon the judgment of Delhi High Court in the case of C.I.T. Vs. Fortis Health Care Ltd. overlooking the fact that ....
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....d TDS u/s. 194C of the Act on three services, whereas in the case of Morgan Stanley Advantage Services Pvt. Ltd. TDS have been deducted u/s. 194J of the Act. Accordingly, he disallowed a total amount of Rs. 17,64,25,298/- by invoking the provisions of section 40(a)(ia) of the Act. Aggrieved, the assessee preferred appeal before the CIT(A). 8. The CIT (A) deleted the disallowance by holding that this is merely a short deduction of TDS because the assessee has deducted TDS u/s. 194C of the Act. The allegation of the Assessing Officer is that the TDS is to be deduction u/s. 194J of the Act. The learned CIT (A) following the decision of Hon'ble Calcutta High Court in the case of CIT vs. S K Tekriwal 361 ITR 432 (Cal) deleted the disallowance....
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....vernment account. We are of the view that the provisions of section 40(a)(ia) of the Act has two limbs one is where, inter alia, the assessee has to deduct tax and the second where after deducting tax, inter alia, the assessee has to pay into the 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 fact 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 sub-section (....