Disallowance on account of interest on loan for non-deduction of TDS under the Income Tax Act

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K.N.CHARY, JUDICIAL MEMBER (Through Video Conferencing) ITA No. 4999/Del/2018 (Assessment Year: 2014-15)

Shivam Industrial Corporation, H. No. 1668,Sector-10A, Gurgaon, Haryana PAN: AALFS5502Q

vs

ITO, HSIIDC Building, Udyog Vihar-V, Gurgaon

Assessee by : Shri Lalit Mohan, CA
Revenue by: Shri Prakash Dubey, Sr. DR
Date of Hearing  25/08/2021
Date of pronouncement  15/09/2021

O R D E R

The learned Assessing Officer noted that there is no exemption to the above recipient and the assessee also did not explain the same, therefore, the interest amounting to Rs. 7,426,351/- paid without deduction of tax deduction at source was disallowed u/s 40(a)(ia) of the income tax act. Consequently, the total income of the assessee was assessed at Rs.7,753,341/- again the returned income of Rs. 226,990.

2. We have carefully considered the rival contention and perused the orders of the lower authorities. Admittedly, the assessee has paid interest to a nonbanking financial company future capital Holdings Ltd of? 7,426,351/- without deduction of tax at source as required under the provisions of Section 194A of the income tax act. This is the solitary issue raised in this appeal as per ground number 2 of the appeal. During the course of hearing before us the assessee has submitted annexure A being a certificate of account and Under the first proviso to subsection (1) of Section 201 of the income tax act, 1961 for certifying the furnishing of return of income, payment of tax et cetera by the payee. Such certificate is dated 21 January 2017. The annexure A certified by a chartered accountant clearly shows that the income paid to the recipient of the interest has already been shown by it in its books of account as income and also the payee has furnished the return of income. The above annexure A was not before the lower authorities.

3. Ground No. 1 is general in nature and therefore, it is dismissed.
Order pronounced in the open court on 17/09/2021.

Please find attached the enclosed file for the full judgement