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TMI Blog2015 (10) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire provision and has not claimed any deduction. We fully agree with the findings of the Ld. CIT(A) on the issue that there is no scope for deducting tax, as the amounts are not covered by the provisions of section 194C to 194J. Not only that A.O. has only raised the interest under section 201(1A) and has not raised the basic demand under section 201(1). This aspect was also considered by the Ld. CIT(A) that assessee was not held as ‘assessee in default’ and therefore, on this reason also interest cannot be levied as the amount to be deducted has not even quantified under section 201. AO was also not correct in levying interest up to the date of order while accepting that the amounts provided were reversed in later year and TDS wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, ₹ 5,02,674 and ₹ 58,371 on the above heads as TDS on provision for interest, professional fees and provision on Transport contractors and raised demand of ₹ 16,96,440 under section 201(1A) for the period from 01.04.2006 to 31.03.2011. 3. Aggrieved, assessee filed appeal before the Ld. CIT(A) contending inter alia, that a provision has been created on 31.03.2007 under the above heads. However, since, there was no identification and quantification against any payee and as such TDS was not deducted and has not claimed the said amounts as expenditure in its return of income for the A.Y. 2007-08. It was contended that it had made TDS payments after reversing the provision and the year relevant is A.Y. 2008-09 but not A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levying interest u/s.201(1A) of I.T. Act, 1961. I have also noted the observations of the A.O. and the Addl. CIT in the remand report and I do not agree with the observation made of the appellant that there has been an arrangement by which tax deduction has been postponed. Though it has been stated that the provisions have been added back in the computation of income in view of the huge losses it has for A.Y. 2007-08, the A.O. and the Addl. CIT did not bother to explain how the appellant benefitted by claiming the expenditure and TDS in the subsequent year. 6.1. The details filed by the appellant have been examined and it is found that the appellant has only provided for the expenses in the accounts for F.Y. 2006-07 and did not claim th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. In this view of the matter, TDS mechanism cannot be put into practice until identity of the person in whose hands, it is includible as income can be ascertained. In the case of Pfizer Ltd. vs. ITO (ITA.No.1667/Mum/2010) dated 31st October, 2012 wherein it is held as under : In view of the above decision of Coordinate Bench, since the payee is not identifiable in this case also at the time of making provision, no TDS need to be made on the above amount. Further, the entire provision has been written back in the next year and the actual amounts paid/credited were subjected to TDS as per the detailed statements filed before the authorities on which there is no dispute. Therefore, assessee is following the provisions of TDS as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in reply, reiterated the submissions made before the Ld. CIT(A) and relied on the Coordinate Bench decision in the case of Pfizer Ltd. vs. ITO ITA.No.1667/Mum/2010 dated 31st October, 2012 (supra) and relied on the order of Ld. CIT(A). 6. We have considered the issue and examined the rival contentions. There is no dispute with reference to the fact that assessee has only made the provisions without identifying the parties as a liability in the year and actual amounts were credited in a later year on which TDS was made. It is also a fact that in the computation of income, assessee has added back the entire provision and has not claimed any deduction. These facts are similar to the facts of Pfizer Ltd. (supra), relied on by the CIT(A) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the same as expenditure at all, assessee shall be liable to deduct tax at source under section 194A of the Act on the interest amount so paid/ credited as the said payment was liable to tax deduction at source. The Bench distinguished the decision of the Pfizer Ltd. vs. ITO (supra) while giving the judgment therein. Since the factual conditions considered in the decision of Pfizer Ltd. vs. ITO (supra) are similar to assessee s case and are different from the facts in the said case of Agreenco Fibre Foam (P) Ltd., vs. ITO (TDS), Kannur (supra), we are not convinced with the arguments of the learned D.R. Since the Ld. CIT(A) order is in tune with the Coordinate Bench decisions on the issue on the given facts, we affirm the same and dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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