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2016 (7) TMI 1394 - AT - Income TaxShort deduction of tax - addition u/s Sec. 40(a)(ia) - Held that - As decided in assessee own case for AY 2008-09 and 2009-10 2016 (2) TMI 1147 - ITAT MUMBAI provisions of Sec. 40(a)(ia) have no application when there is short deduction of tax - Decided against revenue
Issues:
1. Interpretation of Sec. 40(a)(ia) of the I.T. Act, 1961 regarding short deduction of tax at source. Analysis: The appeal was filed by the Revenue against the order of the Ld. CIT(A)-3, Mumbai for the assessment year 2010-11. The main issue raised by the Revenue was whether short deduction of tax at source would attract the provisions of Sec. 40(a)(ia) of the I.T. Act, 1961. The Ld. Counsel for the assessee argued that similar issues had been decided in favor of the assessee by the Co-ordinate Bench for the Assessment Year 2008-09 & 2009-10. The Ld. Departmental Representative relied on the order of the Assessing Officer, leading to a detailed consideration by the Tribunal. The Tribunal examined the decisions of the Co-ordinate Bench in the assessee's own case for Assessment Years 2008-09 and 2009-10. It was noted that the Co-ordinate Bench for the Assessment Year 2009-10 had held that the provisions of Sec. 40(a)(ia) do not apply in cases of short deduction of tax. The Tribunal referred to conflicting views from different High Courts on the applicability of Sec. 40(a)(ia). The Tribunal cited the judgment of the Hon’ble Bombay High Court in the case of Ashok Kumar Parekh regarding the binding precedence of High Court judgments. Following the principle of favoring the assessee in case of conflicting decisions, the Tribunal upheld the order of the Ld. CIT(A) and dismissed the Revenue’s appeal. In conclusion, the Tribunal dismissed the appeal filed by the Revenue based on the interpretation of Sec. 40(a)(ia) of the I.T. Act, 1961 regarding short deduction of tax at source. The decision was made after considering previous rulings and conflicting views from different High Courts, ultimately favoring the assessee in line with the legal principles outlined by the Hon’ble Bombay High Court.
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