TDS u/s 194A of the Income Tax Act

THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD “SMC” BENCH
(Conducted Through Virtual Court)
Before: Shri Mahavir Prasad, Judicial Member
And Shri Amarjit Singh, Accountant Member
Shri Vipin Somabhai
Pujara A/11, Amijyot
Apartment, Nr. Rajnagar
Club, Parimal Society,
Ambawadi, Ahemedabd
PAN: AFUPP6021P
(Appellant)
Vs
The ACIT,
Circle-5(2),
Narayan Chambers
Nehru Bridge Corner
Ashram Road,
Ahmedabad
(Respondent)
Revenue by: Shri S. S. Shukla, Sr. D.R.
Assessee by: Shri S.N. Divatia, A.R.
Date of hearing : 03-08-2021
Date of pronouncement : 23-08-2021
ORDER

1. The fact in brief is that assessee has filed return of income showing loss of Rs. 79,96,219/- on 28th Sep, 2012. Assessment order u/s. 143(3) of the Act was passed on 2nd March, 2015 accepting the losses shown in the return of income. Subsequently, the Pr. CIT issued notice u/s. 263 of the act and passed order u/s. 263 of the Act on 28th March, 2017 directing the Assessing Officer to disallow the payment of interest of Rs. 74,54,822/- which included payment of Rs. 25,29,132/- to M/s. India Infoline, Rs. 35,07,114/- to DSP Merrill Lynch and Rs. 14,18,562/- to Morgen Stanely u/s. 40(a)(ia) of the act.

2. The assessee further submitted that all the accounts of the aforesaid companies were audited accounts and they have filed the income tax return and paid the tax on the interest income. The Assessing Officer has not accepted the explanation of the assessee. The Assessing Officer has stated that assessee has made request to disallow 30% of interest payment of Rs. 74,54,822/-  u/s. 40(a)(ia) of the Act.

3.During the course of appellate proceedings before us, the ld. counsel contended that amount of interest payment has been included in the income of the parities to whom the amount of interest was paid and they have filed their return of income, therefore, no disallowance should be made.

4. In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 23-08-2021.
 

Please find attached the enclosed file for the full judgement