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TMI Blog2016 (9) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 - CALCUTTA HIGH COURT], CIT Vs. Sikandar Khan N. Tunvar [2013 (5) TMI 457 - GUJARAT HIGH COURT] and PMS Diesels Vs CIT (2015 (5) TMI 617 - PUNJAB & HARYANA HIGH COURT) are in favour of the department. Therefore, evidently, there is a cleavage of judicial opinion on the issue. In such a situation, the mandate of the law, as per decision of the Hon'ble Supreme Court in the case of Vegetable Products Ltd. (supra) is to follow the view in favour of the assessee. That being so, by respectfully following the decision of the Coordinate Bench of Jaipur ITAT in the case of Girdhari Lal Bargoti (supra), the issue is decided in favour of the assessee. - ITA No. 177/JP/2016 - - - Dated:- 6-9-2016 - A. D. Jain (Judicial Member) For the Assessee : P. C. Parwal (CA) For the Revenue : R. A. Verma (Addl. CIT) ORDER A. D. Jain (Judicial Member) This is assessee s appeal for A.Y. 2010-11 filed against the order dated 15/12/2015 passed by the ld. CIT(A)-5, Jaipur against confirmation of disallowance of ₹ 6,94,574/- U/s 40(a)(ia) of the Income Tax Act, 1961 (in short the Act ), on account of non-deduction of tax at source on interest paid to NBFCs. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year without deduction of tax at source. The order of the Special Bench has since been put under interim suspension by the Andhra Pradesh High Court. 3.3.1 The Hon ble Calcutta High Court and Hon ble Gujarat High court in the cases of Commissioner of Income-tax, Kolkata-XI v. Crescent Exports Syndicate [2013] 33 taxmann.com 250 (Calcutta) and Commissioner of Income-tax-IV v. Sikandarkhan N Tunvar [2013] 33 taxmann.com 133 (Gujrat) respectively, have held that section 40(a)(ia) of the Act would cover not only the amounts which are payable at the end of the previous year but also which are payable at any time during the year. The Hon ble High Courts have further held that the intention of the legislation was to disallow certain types of expense, subject to provisions of Chapter XVIl- B which are payable at any time during the year but no tax was deducted at source or if deducted was not paid within the stipulated time. There is no such condition that amount should remain payable at the end of the year. 3.3.2 The Hon ble Allahabad High Court in CIT v. Vector Shipping Service (P) Ltd. [2013}38 taxmann.com 77 (Allahabad) has affirmed the decision of the Special Bench in Mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se NBFC by including these interests receipts as their income. Therefore, we do not find any reason to interfere in the order of the Ld. CIT(A). In the result, the revenue s appeal is dismissed. 3.3.6 As observed earlier, the judgement of Hon ble Allahabad High Court in the case of CIT Vs. Vector Shipping Services P ltd. (supra) was per incuriam, since the decisions of Hon ble Gujarat High Court and Hon ble Calcutta High Court cited supra were not brought to the notice of the Hon ble Allahabad High Court. The fact that the decision of the Hon ble Allahabad High Court was per incuriam was also not brought to the notice of Hon ble ITAT, Jaipur while the above mentioned decision in the case of Girdhari Lal Bargoti was rendered. This has led to the decision of Hon ble ITAT, Jaipur being per incuriam, and hence it ceases to have binding precedence. Further, the fact that Hon ble Allahabad High Court s decision was an obiter dicta and not ratio decidendi on the subject matter of sec. 40a(ia), was also not brought to the notice of Hon ble ITAT, Jaipur. In view, of the above stated facts, there were no two views of High Courts in this matter. In fact all Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld. Counsel for the assessee, as also stated in the written submissions filed, has submitted that issue of applicability of Section 40(a)(ia) of the Act has been decided by the Hon ble Jaipur Bench of the Tribunal vide its order dated 10/4/2015 passed in ITA No. 757/JP/2012 for A.Y. 2009-10 in the case of ACIT Vs Girdhari Lal Bargoti , holding that there are different views of different courts on the issue of amount already paid during the year or amount shown payable as on 31st March of every year; that as such, keeping in view the decision of the Hon'ble Supreme Court in the case of CIT Vs. Vegetable Products Ltd. , 88 ITR 192 (SC), the view in favour of the assessee needs to be preferred; that the ld CIT(A) has gone wrong in holding that there are no two views in the matter and that of the Hon'ble High Courts have decided the issue in favour of the department; that the second proviso to Section 40(a)(ia), inserted by the Finance Act, 2012 w.e.f. 01/4/2013, provides that where an assessee fails to deduct tax on the sum paid to the resident, but such resident/payee has furnished the return, has taking into account such sum for computing income and has paid the tax du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(ia) of the Act would cover not only the amounts, which are payable at the end of the previous year, but also which are payable at any time during the year; that the intention of the Legislation was to disallow certain types of expenses, subject to the provisions of Chapter XVII-B, which are payable at any time during the year, but no tax was deducted at source, or if deducted, it was not paid within the stipulated time and that there is no such condition that the amount should remain payable at the end of the year; that in the case of ACIT, Circle-4(2), Mumbai Vs. Rishti Stock and Shares Pvt. Ltd. vide order dated 02/8/2013 in ITA No. 112/Mum/2012 has examined the decision in the case of Vector Shipping (supra) and has concluded that the same were orbiter dicta , whereas those decisions in the case of CIT Vs. Crescent Export Syndicate and CIT Vs. Sikandar Khan N. Tunvar (supra) were ratio decidendi ; that it was never contended before the ITAT, Jaipur Bench in the case of ACIT Vs. Girdhari Lal Bargoti (supra) that Vector Shipping was per incurium ; that therefore, decision in the case of Girdhari Lal Bargoti is also per incurium and it has not binding effect; that since the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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