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TMI Blog2017 (6) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... essive. Accordingly set aside and modify order of the authorities below and direct the AO to restrict the disallowance on these expenses to 1/10 of the total expenditure claimed instead of 1/6. AO shall re-workout the addition accordingly. - ITA No. 159/Chd/2017 - - - Dated:- 1-6-2017 - Shri Bhavnesh Saini, Judicial Member Appellant By : Shri Sudhir Sehgal Respondent By : Shri S.K. Mittal ORDER This appeal by the assessee has been directed against the order of the Ld. CIT(A)-1, Ludhiana dt. 24/11/2016 for Assessment Year 2011-12. 2. I have heard Ld. Representatives of both the parties and perused the material available on record. 3. Ld. Counsel for the assessee did not press Ground Nos. 1,2,5,6 7 the same are d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accountant is filed in the matter. He has submitted that in same circumstances ITAT Chandigarh Bench in the group case of M/s Heera Moti Agro Industries Vs. DCIT in ITA No. 739/Chd/2013 dt. 20/09/2016 restored the matter to the file of AO for verifying the same fact and decides the issue afresh. The order of the Tribunal in para 11 to 14 are reproduced as under: 11. On ground No. 7, assessee challenged the addition of ₹ 4,62,173/- on account of provisions of Section 40(a)(ia) of the Income Tax Act. The ld. CIT(Appeals) also noted that this issue is covered by his findings given for assessment year 2003-04. The Assessing Officer noted that Special Auditor has observed that assessee made some payments on account of brand charges on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The first proviso to section 201(1) of the Act has been inserted to benefit the assessee. It also states that where a person fails to deduct tax at source on the sum paid to a resident or on the sum credited to the account of a resident, such person shall not be deemed to be an assessee in default in respect of such tax if such resident has furnished his return of income under section 139. What is common to both provisos to sections 40(a)(ia) and 201(1) of the Act is that as long as the payee or resident has filed its return of income disclosing the payment received by and in which the income earned by it is embedded and has also paid tax on such income, the assessee would not be treated as a person in default. Held, dismissing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tical purposes. 9. Ground No. 4 reads as under: 4. That the Worthy CIT(A) has also erred in confirming the disallowance of ₹ 46,140/- made by the Assessing Officer, being 1/6th of Car Expenses and Telephone Expenses for personal use of assessee as per para-5 of his order as per detail given hereunder:- Car Expenses ₹ 74,338/- Car Depn. ₹ 1,40,237/- Car Insurance ₹ 18,515/- Telephone Exps. ₹ 43,749/- Total ₹ 2,76,839/- (1/6 of above ₹ 46,14 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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