9911796707
TMI Blog2019 (8) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... The Revenue has proposed the following substantial question of law for the consideration of this Court:- "Whether the Appellate Tribunal was right in upholding the direction of CIT (A) not to disallow u/s.40(a)(i) of the Act particularly when royalty payments are hit by section 195 of the Act?" 3. It appears that in the case on hand, the CIT(A) while partly allowing the appeal preferred by the assessee held as under so far as the question of law raised by the Revenue in the present tax appeal is concerned. 2.4 I have carefully considered the Assessment Order and appellant's written submission. The appellant has not deducted TDS in respect of provision made for Royalty of Rs. 4,59,71,927/hence Assessing Officer made disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of the Government and made payment of the balance amount to the respective parties. In altemate submission, the appellant further argued that if disallowance made by Assessing Officer is upheld in current year, same may be directed to be allowed in subsequent year as TDS pertaining to such royalty has been paid in subsequent year. The appellant has submitted copy of Challan of payment of TDS in the paper book to prove its contention that TDS have been deducted on such payment." 2.5 On careful consideration of the entire facts discussed herein above, it is observed that appellant has made provision for royalty payable to various parties as per agreements executed with them. The payment was not due as per agreement executed with such pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount) - Assessment years 2006=07 to 200910 - Whether it is clear from statutory provisions of TDS that liability to deduct tax at source exists when amount in question is credited to a 'suspense account' or any other account by whatever name called, which will also include a 'provision' created in books of account - Held, yes - Whether assessee having admitted its default under section 40(a)(i) and section 40(a)(ia) could not in proceedings under section 201(1)/(1A) argue no default under chapter XVIIB - Held, yes - Whether statutory provisions of withholding tax clearly envisage deduction of tax at source de hors charge under section 4(1), hence assessee was liable to deduct tax on provision for expenses created in books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question. In the light of the aforesaid decision, the CIT(A) held remitted the matter back to the file of the AO to allow the aforesaid expense, if it is found that the recipients have offered the payments made by the assessee as income in their tax return. 12. We find that similar issue was under consideration before the coordinate bench in the case of Dipak R. Gondaliya Vs. ITO in ITA No.3313/Ahd/2015 & Another order dated 16.03.2016 cited on behalf of the assessee in the course of hearing. The relevant para dealing with the issue by the coordinate bench reads as under: "3. The common grievance in both these appeals relates to the holding that the amendment to Section 40(a)(ia) by the Finance Act, 2012 w.e.f. 01.04.2013 is prospecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .O. and confirmed by the ld. CIT(A) should be upheld. 7. We have given a thoughtful consideration to the orders of the authorities below and have carefully considered the rival contentions. At the very outset, we have to say that the reliance on the Circular by the D.R. is misplaced as that Circular refers to the decision of the Tribunal Special Bench, Vishakhapatanam in the case of Merilyn Shipping & Transports Vs. Addl. CIT. The Circular also refers to the decision of the Hon'ble High Court of Gujarat, High Court of Allahabad which all relates to the issue relating to "paid or payable" whereas the issue before us relates to the amendment of second proviso to Section 40(a)(ia) which has been held to have a retrospective effect by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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