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TMI Blog2016 (11) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... are, therefore, of the view that the ld.AO erred in observing that the assessee has not deducted TDS u/s.194-I of the Act as the assessee has deducted and deposited TDS under the correct provisions of the Act, i.e. u/s.194-J & 194- C respectively and, therefore, no disallowance is called u/s.40(a)(ia) of the Act. - Decided in favour of assessee - ITA No. 933/Ahd/2014 - - - Dated:- 30-9-2016 - Shri Rajpal Yadav, JM, Shri Manish Borad, AM. For The Appellant : Shri James Kurien, Sr.DR For The Respondent : Shri S. N. Soparkar, Ukti Shah, ARs ORDER PER Manish Borad, Accountant Member . This appeal by the Revenue for Asst. Year 2009-10 is directed against the order of ld. CIT(A) VI, Ahmedabad, dated 6.1.2014 vide appeal No.CIT(A) VI/DCIT Cir.3/201/2011-12, passed against order under section 143(3) of the IT Act, 1961 (in short the Act), framed on 30.12.2011 by Jt.CIT, Range-3, Ahmedabad. Revenue has raised following grounds of appeal :- (1) The CIT(A) has erred in law and on facts by deleting the addition of ₹ 70.18 lacs u/s 40(a)(ia) despite the fact that the assessee had not deducted TDS as per section 1941 on expenses in the nature of Rent p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examination of agreement between the assessee and ACBPL was of the view that nature of payment is rent and not contract charges and, therefore, TDS u/s 194I of the Act is applicable and accordingly disallowed the expenditure u/s 40(a)(ia) of the Act. Also it was observed by ld. Assessing Officer that payments of ₹ 11.51 lacs were made to NSE/BSE/Reliance Communication/Tata Communication. towards lease-line charges and no tax was deducted at source u/s 194J 194C of the Act on the basis of type of payments. Whereas ld. Assessing Officer was of the view that payments made are of rent in nature towards lease-lines, B-set charges and have been paid towards plant and machinery and equipments and liable to TDS u/s 194I of the Act. Accordingly, he disallowed the expenses for violation of provisions of section 194I of the Act. 6. When the assessee carried the matter in appeal before ld. CIT(A), both the additions of ₹ 70,18,471/- and ₹ 11,51,418/- were deleted by the first appellate authority by observing as under :- Towards Payment of ₹ 70,18,471/-(ground no.1) 3.2 In the assessment order, AO observed that the appellant had paid ₹ 70,18,471/- to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 SOT 448 (Mumbai) it was held that Section 40(a)(ia) can be invoked only in the event of non-deduction of tax but not for lesser deduction of tax . Similarly in the case of CIT Vs. S.K. Tekriwal 90 DTK 26 (2013), Calcutta High Court held that Expenses are not liable to be disallowed u/s. 40(a)(ia) on account of short deduction of tax at source . Keeping in view the fact of deduction of tax by the appellant U/S.194C and in the light of the above mentioned decisions, disallowance of this sum of ₹ 31,18,471/-is deleted. (ii) Office management charges for the use of office premises and infrastructure.(Rs.39,00,000/-) :- Appellant had deducted tax on this amount u/s.!94J whereas A.O. was of the opinion that the tax was to be deducted u/s. 1941. In the immediately preceding assessment year 2008-09, my predecessor vide the order dt 05.10.2011 held that appellant was entitled to proportionate relief of the amount with reference to the TDS made. However, during the course of present appellate proceedings, the Id. A.R, relied on the subsequent decisions cited at 49 SOT 448 (2012) (supra) and 90 DTR 26 (2013) (supra) wherein it was held that no disallowance u/s.40(a)(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 11,51,418/- is deleted. This ground of appeal is allowed. 7. In appeal before the Tribunal, ld. DR supported the order of Assessing Officer. 8. On the other hand, ld. AR submitted that ld. CIT(A) has followed the decision of his predecessor for Asst. Year 2008-09 in appeal No. CIT(A)-VI/ACIT.Cir.3/699/10-11 vide order dated 5.10.2011 has allowed the grounds of assessee. Ld. AR further submitted that Revenue preferred appeal for Asst. Year 2008-09 before the Tribunal in ITA No.3032/Ahd/2011 and assessee in ITA No.3034/Ahd/2011 and the issue has been decided in favour of assessee. Ld. AR, therefore, requested that the decision of the Coordinate Bench may be followed for Asst. Year 2009-10 also as the grounds are similar in both the years. 9. We have heard the rival contentions and perused the material on record as also the decision of the Co-ordinate Bench in assessee s own case. The solitary grievance of the Revenue in this appeal is against the deletion of addition by ld. CIT(A) of ₹ 70.18 lacs and ₹ 11.51 lacs u/s 40(a)(ia) of the Act towards management charges paid to Ashwin Chinubhai Broking Pvt. Ltd. and lease line rent paid to NSE/BSE/Reliance Commun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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