2011 (9) TMI 1051 - AT - Income Tax

Summary

Issues Involved:
1. Justification of the Commissioner (Appeals) in deleting the addition of Rs. 3,40,64,622 made by the Assessing Officer u/s 40(a)(ia) of the Income Tax Act, 1961.

Summary:

Issue 1: Justification of the Commissioner (Appeals) in deleting the addition of Rs. 3,40,64,622 made by the Assessing Officer u/s 40(a)(ia) of the Income Tax Act, 1961.

The Revenue's appeal contested the Commissioner (Appeals)'s decision to delete the addition of Rs. 3,40,64,622 made by the Assessing Officer (A.O.) u/s 40(a)(ia) of the Income Tax Act, 1961. The A.O. had disallowed this amount due to non-deduction of TDS, based on the auditor's note indicating the absence of proper evidence for TDS deduction on contractual obligations. The appellant had deducted TDS of Rs. 99,122 for freight paid of Rs. 89,07,453, but the A.O. found discrepancies in the declarations in Form no.15-I submitted for exemption from TDS, leading to the disallowance.

The Commissioner (Appeals), after obtaining a remand report, concluded that only in 65 cases, amounting to Rs. 44,05,281, Form no.15-I was required. For the remaining amount, each G.R. was less than Rs. 5,000, and aggregate payments per year to a particular party were less than Rs. 50,000, thus not requiring TDS deduction. The Commissioner (Appeals) granted relief to the assessee, which the Revenue challenged.

The Tribunal noted that the A.O. did not dispute the break-up provided by the Commissioner (Appeals) in the remand report. The Tribunal held that the assessee had filed all required information, including Form no.15-I, and the A.O. did not conduct any investigation or verification on these forms. The Tribunal emphasized that the A.O. should have given the assessee an opportunity to rectify any defects in Form no.15-I before drawing adverse inferences.

The Tribunal upheld the Commissioner (Appeals)'s order, stating that the declarations in Form no.15-I could not be rejected without enquiry or investigation, and there was no evidence proving these declarations were incorrect. The Tribunal dismissed the Revenue's appeal, concluding that the assessee had discharged its burden of proof, and the onus shifted to the Revenue, which failed to provide adverse material or evidence.

Conclusion:
The Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals)'s decision to delete the addition of Rs. 3,40,64,622 made by the A.O. u/s 40(a)(ia) of the Income Tax Act, 1961.