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TMI Blog2016 (3) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... en duly paid which is placed on page 26 and 27 of the paper book. Therefore, we are of the considered view that the observation of Ld. CIT u/s. 263 of the Act that the order is erroneous is correct observation. However, as per the provision of Sec. 263 of the Act the order of the AO should not only be erroneous but also to the interest of revenue. So in this view of the matter the order passed by Assessing Officer is not prejudicial to the interest of revenue. Regarding the claim of assessee that the printing material expense is out of the purview of TDS provision, we find that this is a transaction of purchase of printing material as evident from the bill of the party concern M/s Jyoti Enterprise which are placed at page No. 6 to 8 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. For that in the facts and circumstances of the case, the direction of addition us. 40(a)(ia) of ₹ 266,459 representing purchase of material/goods being excluded from TDs u/s. 194C(3) read with sub clause (e) of explanation is wrong, erroneous, excessive, arbitrary and deserves to be deleted/reduced. 2. For that in the facts and circumstances of the case, the direction of addition u/s. 40(a)(ia) of ₹ 56,04,100 representing expenditure/payments not exigible to tax deduction at source or otherwise not disallowable is wrong, erroneous, excessive, arbitrary and deserves to be deleted/reduced. 3. For that in the facts and circumstances of the case, the directing to addition of ₹ 130,345 as bank interest income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the provision of TDS u/s. 40(a)(ia) of the Act then also the order of AO is not erroneous and prejudicial to the interest of revenue, for the reasons as under:- 1) As per the decision of Merilyn Shipping Transort vs. Addl. CIT in ITA No. 477/Viz/2008 held that the amount remaining outstanding at the end of year attract the Sec. 40(a)(ia) of the Act with respect to Sec. 194C of the Act. The outstanding amount at the end of financial year is at ₹33,21,418/-. So the amount of disallowance shall be restricted to above stated amount 2) As per Amended Finance Act 2012 if the recipient pays the tax then the provision of Sec. 40(a)(ia) would not be attracted to the payer. Accordingly, disallowance cannot be made. 3) Out of the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. 5. We have heard both the parties and perused the materials available on record. Ld. AR submitted paper book containing pages 1 to 40 and stated that assessment was completed u/s. 143(3) of the Act after detailed scrutiny of its books of account and documents. The issue raised by Ld. CIT was also verified by AO and therefore the order passed u/s 263 of the Act by Ld. CIT holding erroneous and prejudicial to the interest of revenue does not hold any merit. Besides, this assessee submitted in terms of amended provision of Finance Act 2012 where if an assessee fails to deduct TDS but prove that the receiver has paid the tax on the amount then the payer will be exempted from the provision of Sec. 40(a)(ia) of the Act. 6. On the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered view that the observation of Ld. CIT u/s. 263 of the Act that the order is erroneous is correct observation. However, as per the provision of Sec. 263 of the Act the order of the AO should not only be erroneous but also to the interest of revenue. So in this view of the matter the order passed by Assessing Officer is not prejudicial to the interest of revenue. Regarding the claim of assessee that the printing material expense is out of the purview of TDS provision, we find that this is a transaction of purchase of printing material as evident from the bill of the party concern M/s Jyoti Enterprise which are placed at page No. 6 to 8 of the paper book. We also find that there was no contract between the assessee and the party M/s J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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