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TMI Blog2017 (4) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... make disallowance of expenditure under section 14A r.w. rule 8D of the Income Tax Act. The ld.AO ultimately worked out disallowance of Rs. 18,40,543/-. Appeal to the CIT(A) did not bring any relief to the assessee. 4. With the assistance of the learned representatives, we have gone through the record carefully. The assessee has raised other contentions, but we are not required to look into all these aspects. One of the contentions of the assessee was that it has not earned any income which is exempt in nature, therefore, no disallowance under section 14A can be made. This plea has been specifically raised before the ld.CIT(A), and it is discernible from written submissions of the assessee reproduced by the ld.CIT(A) on page no.6 of the impugned order. Submission made in sub-para 1 to this aspect reads as under: "1. The perusal of the P&L account would also reveal that the appellant company has not earned any income which is exempt in nature. At this stage the provision of sec. 14A are reproduced for easy reference. " 1) For the purposes of computing the total income under this chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent case, admittedly the assessee did not make any claim for exemption. In such a situation section 14A could have no application." 5. We do not find any question of law arising, Tax Appeal is herefore dismissed." 6. Respectfully following the judgment of the Hon'ble High Court, we are of the view that the CIT(A) is not justified in confirming the disallowance. We allow this ground of appeal and delete the disallowance of Rs. 18,40,543/-. 7. Ground nos.2 and 3 are inter-connected with each other. In these grounds, grievance of the assessee is that the ld.CIT(A) has erred in confirming the addition of Rs. 6,08,116/- as interest income. In ground no.3, the assessee has raised an alternative plea with respect to ground no.2 and contended that in case interest income is being confirmed in this year, then income which is offered in subsequent year be excluded from the taxability. 8. Brief facts of the case are that the AO received an information from annual information wing (AIR) exhibiting the fact that the assessee has earned interest income of Rs. 9,15,925/-. The assessee has shown interest income of Rs. 3,07,914/-. The assessee has reproduced name and address of the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar in which such income has arisen. Similarly, it is also not in dispute that the correct income is to be assessed in the hands of the correct person. The assessee cannot be permitted to shift tax liability in any other assessment year where income was not generated. Payment of taxes in a particular year is not by choice of the assessee, rather it is by operation of law. Neither the rate of payment of tax nor offering of any income in a particular year can absolve assessee from payment of tax by operation of law. Otherwise, it will be discretion of an assessee to offer an income in a particular year. For example, an assessee might have huge losses in a particular year, and he would like to shift the taxable income to that year. As far as decisions referred by the assessee are concerned, these are not strictly applicable in the present case. Because in the case of Gujarat Gas Financial Services Ltd. (supra), disallowance under section 40A(2) was made, which is to be made when facts exhibiting nexus between the assessee and a specified person who has control over operation of the assessee showing undue benefits is being extended by an assessee to such person for availing services or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnected with the subject-matter of appeal. The various provisions enacted by the Legislature in Chapter XIV of the Income-tax Act, 1961 viz. sections 153(2A) and 153(3) as well as the two Explanations appended below subsection (3) of section 153, which lift the bar of time limitation for giving effect to the finding or direction given by the Tribunal, amply bring out the legislative intention for enlarged ambit of appellate jurisdiction of the Tribunal conferred under section 254(1). Obviously if section 254(1) is to be construed as prohibiting the Tribunal from giving any direction or finding in relation to any assessment year other than the assessment year under appeal, there was obviously no occasion for the Legislature to include various sections in Chapter XIV for lifting the bar of time limitation to initiate proceedings for assessment in consequence of such directions or findings. The only limitation on the powers of the Tribunal to give directions or finding in relation to another assessment year would be that these are necessary for the disposal of appeal and are not merely incidental. 8. With regard to section 153(3) and Explanations appended thereto, the Id. D.R. put f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Bhagwan Das's case (supra). The said decision has been rendered in the context of the second proviso to section 34(3) of the Indian Income-tax Act, 1922. While construing the expressions "finding" and "direction" in the second proviso to section 34(3), the Supreme Court held that a finding could only be that which was necessary for the disposal of an appeal in respect of an Assessment Year of a particular year. Even though the relevant provisions for lifting the bar of time limitation for giving effect to the finding or direction as contained in 1961 Act are worded in terms which are unequivocal and explicit as compared with the 1922 Act, yet the basic proposition, enunciated in Murlidhar Bhagwan Das's case (supra) still holds the ground that a "finding" contained in the order of the Tribunal could only be that which was necessary for the disposal of an appeal in respect of an Assessment Year of a particular year. Similar proposition has been laid down in the various decisions cited by the Id. D.R. to which reference has been made above. 10. We may now consider the facts of the instant case in the context of the aforementioned legal position. The basic issue which arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment Year 1991-92 and not for Assessment Year 1992-93. With these observations the appeal of the assessee for Assessment Year 1992-93 under reference is therefore disposed of as above." 13. A perusal of the above would indicate that debit note was required to be considered in the Asstt.Year 1991-92, but it was considered in Asstt.Year 1992-93. The assessee has claimed commission expenditure for Asstt.year 1992-93 and ultimately it revealed that it was to be claimed Asstt.Year 1991-92. The assessee has raised alternative plea before the AO and contended that in case it is not admissible in Asstt.Year 1992-93, then it would be allowed in the Asstt.Year 1991-92. The Tribunal has considered position of law on this aspect and held that finding can be recorded for permitting the assessee to claim an expenditure which was related to some other year, than the year in which it was claimed and disputed before the Tribunal. In other words, in the case of Perfect Equipments(supra), claim was made for the Asstt.Year 1992-93, whereas it was meant for Asstt.Year 1991-92. The Tribunal has decided the issue by observing alternative plea that claim was allowable in the Asstt.Year 1991-92 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his report in form no. 3CD Annexure H has observed that no tax has been deducted at source. Following statement gives the details of payments made without deduction of tax at source: Sr No. Name of Party Nature of work Amount (Rs.) Reasons for non deduction of Tax at source 1 Dalkin Air conditioning AC repairing work 18540 Payment has been made for repairing which is not in the nature of contract. Hence there was no liability to deduct tax at source. 2 Harsha Electriclas Electrical & fitting a/c 625000 Payment has been made for supply of material. There was no contract with the party for such supply. Hence, there was no legal obligation to deduct tax at source. 3 Surya Offset Advt a/c 50000 Expenditure being in the nature of advertisement did not attract TDS liability. 4 Harilal M Vyas Repairs & Maintenance 50000 TDS of Rs. 1030/-has already been deducted and deposited to the credit of the government account. Copy of the challan is enclosed. The auditor has by mistake mentioned that no TDS has been made in respect of this payment. 18. On appeal, in principle, the ld.CIT(A) has concurred with the assessee that the TDS was not to be deducted on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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