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2014 (11) TMI 488 - HC - Income TaxStay application - Disallowance made to M/s.Jaldhi Overseas Pvt. Ltd. Held that - Following the decision in M/s. Anand Transport (Private) Ltd. Versus Assistant Commissioner of Income Tax 2014 (2) TMI 434 - MADRAS HIGH COURT - the transaction between the assessee and non-resident company would be taxable only in Singapore and not in India - disallowance u/s 49(a)(i) for alleged non-deduction of tax at source in terms of Section 195(1) of the Income Tax Act is upheld - the issue raised for consideration is prima facie covered by the decision of the Hon ble Division Bench - Therefore, it is a good ground for granting stay of the demand - the demand which has been raised on the petitioner under the 1st head shall remain stayed till the disposal of the appeal by the CIT(A). Disallowance of interest on amount borrowed and advances to Sister company for development of group business Held that - In assessee s own case for the earlier assessment year wherein the assessee had filed appeal before the CIT(A) and pleaded for deletion of the disallowance by relying upon SA BUILDERS LTD. Versus COMMISSIONER OF INCOME-TAX 2006 (12) TMI 82 - SUPREME COURT - the assessee has established prima facie case - Though it is stated by the learned Standing Counsel for the Revenue that it is for the AY 2009-2010, yet legal principles, which were adopted by CIT (A) as on date holds good and it is for the appellate authority in the present appeal to consider that issue independently. Disallowance u/s 14A Held that - Though the submission was made by the petitioner, the 1st respondent has not assigned any reason either accepting or rejecting the petitioner s contention, but only proceeded to direct the petitioner to pay tax due immediately - the scheme of the Act reposes such duty on the AO, while examining the stay petition, filed by the assessee requesting for stay of the demand till the appeal against the order of assessment is heard by the CIT(A) - this principle has not been adhered to and the order is a non speaking order thus, the disallowance is set aside and the matter is remitted back for fresh consideration. Disallowance for difference in 26AS Held that - The revenue has granted liberty to the petitioner to file necessary documents and statements and granted time revenue is entitled to proceed with in accordance with law, after receipt of documents and statements from the petitioner Decided in favour of assessee.
Issues:
Petitioner seeks Writ of Certiorarified Mandamus to quash order dated 15.10.2014 by Assessing Officer for assessment year 2011-2012. Analysis: 1st Head: - The issue of disallowance made to M/s.Jaldhi Overseas Pvt., Ltd., was covered by a previous decision of the Hon'ble Division Bench. - The Division Bench had allowed the writ petition related to disallowance under Section 49(a)(i) for non-deduction of tax at source. - The issue was prima facie covered by the Division Bench's decision, providing a good ground for granting stay of the demand. 2nd Head: - Concerning disallowance of interest on amount borrowed and advance to a Sister company, the petitioner had a prima facie case. - The petitioner had relied on a judgment of the Supreme Court in the case of M/s.SA Builders for a similar issue in a previous assessment year. - The demand related to this head was also ordered to remain stayed. 3rd Head: - The disallowance under Section 14A was challenged by the petitioner through submissions and a stay petition. - The Assessing Officer did not provide reasons for rejecting or accepting the petitioner's contentions, leading to a non-speaking order. - The matter was set aside, and the Assessing Officer was directed to reconsider the issue after affording a personal hearing to the petitioner. 4th Head: - The Assessing Officer granted the petitioner time to file necessary documents and statements regarding the discrepancy in 26AS. - The Assessing Officer was entitled to proceed in accordance with the law upon receiving the required documents. Conclusion: - The writ petition was allowed, with demands related to the 1st and 2nd heads to remain stayed until the appeal by the Commissioner of Income Tax (Appeals) was disposed of. - The 3rd head issue was set aside for fresh consideration with a personal hearing opportunity for the petitioner. - The Assessing Officer was to proceed in accordance with the law for the 4th head upon receiving the necessary documents. - No costs were awarded, and the connected miscellaneous petition was closed.
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