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TMI Blog2015 (12) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... aid within the relevant previous year and nothing remains payable/outstanding at the end of the year. The assessee must be given reasonable opportunity of being heard on the issue. - Decided in favour of assessee for statistical purposes. - ITA No. 1121/Hyd/2009 - - - Dated:- 27-11-2015 - B. Ramakotaiah, AM And Saktijit Dey, JM For the Appellant : Shri V Raghavendra Rao For the Respondent : Shri B Kurmi Naidu ORDER Per: Saktijit Dey, Judicial Member This is an appeal by the assessee against the order dated 30.9.2009 of learned Commissioner of Income-tax (Appeals) Guntur for assessment year 2006-07. 2. Assessee has originally raised six grounds in the Memorandum of appeal. Grounds No.1 and 6 being general in natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred an appeal before the first appellate authority. Though before the first appellate authority also, the assessee claimed that there is no contract between the assessee and the payees, so as to construe that the payments made come within the purview of S.194C, thereby casting a liability on the assessee to deduct tax at source, the CIT(A) however, having not found merit in the plea of the assessee, sustained the disallowance. 5. The learned counsel for the assessee, at the time of hearing, confined himself to the issue raised in the additional grounds and submitted before us that during the relevant previous year, the assessee has paid the entire amounts claimed as expenditure on account of printing and agent's sales commission, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at during the relevant previous year, the assessee has paid the entire amount on printing account and agent's sales commission and nothing remained payable at the end of the relevant previous year. In this context, he has referred to the extract of the ledger accounts relating to the agent's sale commission and printing to impress upon the fact that what is claimed as expenditure has been paid during the relevant previous year. As far as the legal issue raised by the assessee, it would be observed that the ITAT Visakhapatnam (Special Bench) in the case of Merilyn Shipping and Transport (136 ITD 23) (SB) has held that provisions of S.40(a)(ia) can be invoked for disallowance of expenditure on account of non-deduction of tax at sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther relevant to observe that Hon'ble Allahabad High Court in the case of CIT V/s. Vector Shipping Services Pvt. Ltd. (357 ITR 647) has approved the view taken in the Special Bench decision in the case of Merlyn Shipping and Transports (supra) and has held that disallowance under S.40(a)(ia) can be made only if the expenditure claimed remains outstanding at the end of the relevant previous year. Department's Special Leave Petition filed against the aforesaid decision of the Hon'ble Allahabad High Court has been dismissed by the Hon'ble Apex Court. 9. Thus, the principle which emerges is that if the expenditure claimed was paid within the relevant previous year, no disallowance can be made under S.40(a)(ia). However, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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