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IN THE INCOME TAX APPELLATE TRIBUNAL,
KOLKATA `A' BENCH, KOLKATA
Before Shri Pramod Kumar (Accountant Member),
and Shri George Mathan (Judicial Member)
I.T.A. No .: 17 2/ Kol. / 2012
Assessme nt year : 20 07-08
,
Maha Lak shmi Rice Mill,..................................App ellant
Vill. & P.O. Bali cha k,
P.S. Kh arag pu r, Di st. Mi dnapu r ( West)
[PAN : AAPFM 3 915 P]
Vs.
Additio nal Commi ssion er of Incom e Tax ..............R espond ent
Range-2,
Midnapore
Appearances by:
Shri Soumitra Chowdhury & Shri T.K. Chakraborty, for the appellant
Shri Susanta Kumar Sinha, D.R., for the responde nt
Date of co ncluding t he hea ri ng : July 09, 2012
Date of prono unci ng the o rde r : July 09, 2012
O R D E R
Per Pramod Kumar :
1. By way of this appeal, the assessee appellant has challenged
correctness of CIT(Appeals)'s order dated 27 t h January, 2010, in the
matter of assessment u/s. 143(3) of the Income Tax Act, 1961 for the
assessment year 2007-08, on the following grounds :-
(1) For that the ord er of assessment as w ell as ord er of app eal i s bad
in law an d sh ould not hold g ood in app eal.
(2) For th at addition of Rs.4 ,66,874/- on account of n on-d educti on
of t ax at source i s highly unjust and unfai r. It w as disallowed
just o n a tech nical ground whi ch should not h old g ood i n
appeal.
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2. The short issue thus we are required to adjudicate is whether or
not the CIT (Appeals) was justified in upholding the disallowance of
Rs.4,66,874/-, which was made u/s. 40(a)(ia) of the Act.
3. The material facts are not in dispute. During the course of
scrutiny assessment proceedings, the Assessing Officer noticed that the
assessee had paid interest of Rs.4,66,874/-, on unsecured loans, without
deducting tax at source u/s. 194A of the Act. It was for this reason that
the interest payment of Rs.4,66,874/- was disallowed by invoking the
provisions of section 40(a)(ia) of the Act. Aggrieved, assessee carried
the matter in appeal before the CIT(Appeals), but without any success.
The assessee is not satisfied and is in further appeal before us.
4. We have heard the rival contentions, perused the material on
record and duly considered factual matrix of the case, as also the
applicable legal position.
5. We find that it is an admitted position that the provisions of
section 40(a)(ia) r.w.s. 194A, on the facts of this case, have been
invoked in respect of interest actually paid by the assessee. A special
Bench of this T ribunal, in the case of Merilyn Shipping & Transports
vs.- ACIT (ITA No. 477/Viz./2008; order dated 29.03.2012), has held that
the provisions of section 40(a)(ia) can only be invoked in respect of the
amounts remaining payable at the year end, and not in respect of the
amounts actually paid. In this view of the matter, the CIT(Appeals) was
clearly in error in upholding invoke provisions of section 40(a)(ia) on
the facts of this case.
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6. For the reasons set out above, we uphold the grievance of the
assessee and direct the Assessing Officer to delete the impugned
disallowance of Rs.4,66,874/-. The assessee gets the relief accordingly.
7. In the result, the appeal of the assessee is allowed. The order is
dictated and pronounced in the open court immediately upon
conclusion of hearing today on 9 t h day of July, 2012.
Sd/- Sd/-
George Mathan Pramod Kumar
(Judicial Member) (Accountant Member)
Kolkata, the 9 t h day of July, 2012
Copies to : (1) Th e app ell ant
(2) Th e respon dent
(3) CIT
(4) CIT(A)
(5) Th e D ep artment al Rep resentativ e
(6) Guard File
By order etc
Assis tant Registrar
Income Tax Appe llate Tribunal
Kolkata benches, Kolkata
Laha/Sr. P.S.
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