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TMI Blog2014 (10) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... the case on hand, remit the matter to the file of the Assessing Officer. The Assessing Officer is directed to consider the allowance or otherwise of the expenditure claimed amounting to ₹ 1,53,78,795/- on account of payments to Shri Uday Kumar Shetty after affording the assessee adequate opportunity to file Form No.26A and verification of whether the said payee has reflected the payment/receipt in his books of account and offered the same to tax in the period under consideration. In these circumstances, we set aside the order of the ld.CIT(A) to the file of the Assessing Officer only for the limited purpose as directed above. - Decided in favour of assessee for statistical purposes. - ITA No.1832/Bang/2013 - - - Dated:- 10-10-2014 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C of the Act in the period relevant to assessment year 2005-06 in respect of payments of ₹ 1,53,78,795/- made to a sub-contractor Shri Uday Kumar Shetty. The ld.CIT(Central) directed the Assessing Officer to consider disallowance of the entire payments of ₹ 1,53,78,795/- u/s 40(a)(ia) of the Act for non-deduction of tax at source in accordance with the provisions of sec.194C of the Act. 2.3 Consequent to the order of the ld.CIT(Central), Karnataka u/s 263 of the Act dated 31/3/2009, the Assessing Officer in pursuance thereof passed an order of assessment u/s 143(3) r.w.s.263 of the Act dated 5/10/2009 for assessment year 2005-06 wherein the entire payments made by the assessee to Shri Uday Kumar Shetty amounting to ₹ 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on 31st March of a particular year but also those amounts that are payable at any point during the year. In that view of the matter, the ld.CIT(A) confirmed the disallowance of ₹ 1,53,78,795/- made by the Assessing Officer u/s 40(a)(ia) of the Act and accordingly dismissed the assessee s appeal by order dated 10/10/2013. 3. Aggrieved by the order of the CIT(A), Belgaum, dated 10/10/2013 for assessment year 2005-06, the assessee is in appeal before us raising the following grounds: 1. The order of the learned Commissioner of Income-tax(Appeals) in so far as it is against the appellant, is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the appellant s case. 2. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the same will amount to taxing the same income twice i.e. once disallowance of expenditure in the hands of the payer and once again the amounts being taxed in the hands of the payee under the facts and circumstances of the case. 6. The learned authorities below failed to appreciate that the provisions of section 40(a)(ia) of the Act is attracted only to the amounts which are payable at the end of the year and not to the entire actual payments paid during the year under the facts and circumstances of the case. 7. The learned authorities below failed to appreciate the fact that disallowance under section 40(a)(ia) is permissible only if the deduction is claimed under section 30 to 38 of the Income-tax Act, 1961 under the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of tax thereon u/s 194C of the Act. 5.2 Before us, the ld.AR reiterated the stand taken by the assessee before the ld.CIT(A). It is submitted that there is no dispute with regard to the facts of payments amounting to ₹ 1,53,78,795/- being made by the assessee to Shri Uday Kumar Shetty; that the said payments have been accounted by the payee in his books of account and that the payee has offered this as part of his computation in his return of income for this year and paid relevant taxes thereon as applicable. The ld. AR submitted that the newly inserted second proviso to section 40(a)(ia) of the Act inserted by Finance Act 2013 w.e.f. 1/4/2013 mandates that if the recipient has accounted the said amounts in his books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant to assessment year 2005-06, has not been controverted by the authorities below. In our considered opinion, since the payee/ recipient i.e. Shri Uday Kumar Shetty has accounted for these payments in his books of account, audited u/s 44AB of the Act and has offered the same for tax in his return of income for the relevant period, thus, by virtue of the amendment, by way of insertion of the second proviso to section 40(a)(ia) of the Act w.e.f. 1/4/2013, the provisions of section 40(a)(ia) of the Act would not be attracted to the payments made by the assessee to Shri Uday Kumar Shetty amounting to ₹ 1,53,78,795/-. In coming to this view, we draw support from the two above cited decisions of the co-ordinate benches of this Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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