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TMI Blog2013 (1) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... level of the A.O. The assessee is able to prove prima facie that bank has granted cash credit limit for trading activities of potatoes, on which the assessee paid interest. If any interest is paid by the assessee in respect of capital borrowed for the purpose of business, the interest paid thereon shall be allowable as deduction. Remand back to AO Deduction u/s 80IB(11) on interest income – Held that:- Where deduction u/s 80IB(11) has not been allowed in respect of profit on trading of potato. Therefore, there is no question of allowing deduction u/s 80IB(11) on interest income. In favour of revenue Disallowance u/s 40(a)(ia) – TDS not deducted on payment made to contractors u/s 194C - payment to each of the contractor was more than Rs.50,000 – Held that:- The payments were made to different labourers as the CIT(A) has rightly held that no evidence is furnished in support of the contention. Following the decision in case of Merilyn Shipping & Transports (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) that because without prejudice to the grounds as mentioned above section 40a(ia) is applicable only in the cases where the amount is payable on the last day of previous year. alternate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived, deduction u/s 80IB(11) of the Act can be rejected. 6. Because the Ld. CIT(A) has wrongly, illegally and arbitrarily confirmed the addition of Rs.5,73,766/- made by the Assessing officer by applying the provisions of section 40a(ia) of the Act read with section 194C of the Act. 7. Because considering the facts of the case and the submission made before the authorities below the provision of TDS are not applicable on the payment of Rs.5,73,766/- and hence the Ld. CIT(A) has erred in confirming the Assessing Officer s action in invoking the provisions of section 40a(ia) of the Act. 8. Because the Ld. CIT(A) while confirming the addition of Rs.5,73,766/- has erred in rejecting the appellant s alternate submission and the legal position that section 40a(ia) of the Act is applicable only in the case where the amount is payable on the last day of previous year. All the payments as mentioned in the Assessment Order have been made during the year. On this round also the addition is wrong, illegal and deserves to be deleted. 9. That the appellant craves leave to add, amend, alter, modify or delete any or all of the grounds of appeal before or at the time of he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T.A.T. and in the light of that we do not find any infirmity in the order of CIT(A). Order of CIT(A) is confirmed on the issue. 6. The issue raised in second ground is alternate submission that the loan has been separately taken for own stock of potato, therefore, the interest pertaining to business of trading in potato and business of Cold Storage are required to be separately considered for both activities of business. 7. The ld. Representatives of the parties submitted that this issue is also covered by the order of I.T.A.T., Agra Bench in assessee s own case in ITA No.68/Agr/2011, order dated 31.08.2012 vide paragraph no.6. The I.T.A.T. has decided the issue as under :- 6. As regards ground No.2 regarding alternate claim that if deduction u/s. 80IB(11) is not allowable on potato trading u/s. 80IB, then the interest paid on CC limit for potato trading may be allowed as deduction. We are of the view that the matter requires reconsideration at the level of the AO. The assessee filed certificate of Aryavrat Gramin Bank dated 07.06.2012 in the paper book, which is obtained after passing of the assessment order in which the bank has certified that the cash credit limit w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, order dated 31.08.2012. In the light of the fact, this ground of appeal is also sent back to the file of A.O. with identical direction as given while deciding ground no.2 above. The A.O. is directed accordingly. 12. Ground nos.6, 7 8 are pertaining to disallowance of Rs.5,73,700/-. The brief facts of the case are that during the assessment proceedings the A.O. noticed that the assessee has not deducted tax at source on payment of Rs.5,73,766/- made to 10 contractors and the payment to each of the contractor was more than Rs.50,000/-. The A.O. has given details of this amount at page nos. 2 3 of his order. The A.O. rejected the assessee s contention that the payment made towards loading and unloading of potato to labourers directly and the voucher is prepared in the name of the persons through whom the labourer is called. There are number of labourers to whom the payment is made at a time and hence preparation of voucher in the name of each and every individual labour in a short time is not practically possible. It was submitted that these persons are not contractors and the payment is made directly to individual labourer and not only to these 10 persons. The A.O. disallowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this ground also the addition is wrong, illegal and deserves to be deleted. 6. The above ground no.5 raised before the CIT(A) is identical to the ground no.2 raised before us. 7. In the light of above discussion and after considering totality of the facts of the case, we find that factual verification is required in the light of decision of I.T.A.T. cited supra. We, therefore, think it proper to send this issue back to the file of the Assessing Officer with the direction to verify the facts of the case and decide the issue in accordance with the decision of I.T.A.T., Special Bench Visakhapatnam after providing opportunity of hearing to the assessee. 14. We have heard the ld. Representatives of the parties and records perused. We do not find substance in the main submission of the ld. Authorised Representative that the payments were made to different labourers as the CIT(A) has rightly held that no evidence is furnished in support of the contention. However, we find force in alternate submission of the assessee that on identical set of facts the issue has been sent back to the file of A.O. by the I.T.A.T., Agra Bench in another case i.e. ITA No.434/Agr/2011, order da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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