9911796707
TMI Blog2024 (6) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the benefit of the expense disallowed on account of non-deduction of TDS should be allowed on an actual payment basis in pursuance to the provision of section 40(a)(ia) of the Act. It is also important to note that if the assessee makes the payment of TDS of the lesser amount, than the amount which he was supposed to deposit with Government treasury, then the corresponding expenses should only be allowed as deduction. There is no confusion with finding of the Ld. CIT(A), as observed that the assessee has made the payment but there was no break-up of such amount indicating the amount of TDS and the interest thereon. Admittedly, the assessee has made deposits of TDS belatedly and therefore it is onus upon the assessee to furnish the break-up of the TDS deposited by him. Revenue in the absence of necessary details from the side of the assessee about the interest and the amount of TDS, was very much empowered to re-workout interest embedded in such amount of TDS by doing reverse working. However, we find that the revenue authority has not carried out such an exercise. Therefore, in the interest of justice and fair play, we are of the view that the assessee should be given one m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the same is taxable under the provision of section 28(iv) - neither the AO nor the learned CIT(A) in their respective findings invoked the provision of section 41(1) of the Act. Accordingly, we set aside the findings of the ld. CIT-A and direct the AO to delete the addition made by the AO. Hence, the ground of appeal of the assessee is hereby allowed. - SHRI WASEEM AHMED, ACCOUNTANT MEMBER And SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER For the Appellant : Shri Manish J Shah, with Shri Rushin Patel, ARs For the Respondent : Shri Ashok Kumar Suthar, Sr. DR ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: 1. The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-8, Ahmedabad (in short Ld. CIT(A) ) arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act 1961 (here-in-after referred to as the Act ) relevant to the Assessment Year 2012-13. 2. The assessee has raised the following grounds of appeal: 1. To delete disallowance in respect of addition on account of 40a(ia) of Rs. 1,44,21,556/- 2. To delete disallowance u/s. 36(1)(va) of Rs. 1,50,202/- 3. To delete addition of write ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1,44,21,556/- (80,38,660 + 63,82,896) to the total income of the assessee. 5. Aggrieved assessee preferred an appeal to the Ld. CIT(A) and submitted that it has furnished the complete details such as the amount of expense, amount of TDS deducted, payment of tax and details of challan during the assessment proceedings. Furthermore, the AO has not pointed out any defect in such details. However, the AO rejected the claim of the assessee in an arbitrary manner. The assessee also claimed to have filed the computation of income/ income tax return pertaining to AYs 2010-11 and 2011-12 along with the calculation of TDS amount. 6. However, the Ld. CIT(A) observed that the amount of TDS was claimed to be paid on 31/03/2012, but no breakup of TDS vis-a-vis interest on such delayed payment of TDS was furnished. According to the Ld. CIT(A), it was onus upon the assessee to furnish the party-wise details of TDS payment, copy of TDS return along with TDS certificate to demonstrate with the expenses which were disallowed in earlier year on account of non-payment of TDS to work out the amount that should be allowed as deduction in the year under consideration. 6.1 The Ld. CIT(A), also obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n sufficient amount has been paid does not dis-entitle the assessee for 100% disallowance. 9. On the contrary, the ld. DR vehemently supported the order of the authorities below. 10. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that there were certain expenses which were claimed by the assessee in earlier years but the same was disallowed on account of non-deduction of TDS. It is settled law that the assessee is entitled for the deduction of the expenses which were subject to TDS based on the deduction and deposit of TDS in the Government Treasury. Admittedly, the onus lies upon the assessee to furnish the supporting documents. As such, the assessee is under the obligation to furnish the necessary information of the expenses along with the party details which were disallowed in the earlier year on account of non-deduction of TDS. Likewise, the assessee has to furnish the details of the expenses along with the party details to demonstrate deduction of TDS and the payment to the Government treasury thereof. This establishes that the law is clear that such expense will be allowed as deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue raised by the assessee is that the Ld. CIT(A), erred in confirming the addition made by the AO under the provision of section 36(1)(va) of the Act. 12. The AO during the assessment proceeding found that the assessee deposited employee contribution towards the provident fund amounting to Rs. 1,50,202/- after the due date specified under PF Act. Therefore, the AO, by invoking the provision of section 36(1)(va) r.w.s. 2(24)(x) of the Act treated the same as income and added to the total income of the assessee. 13. On appeal by the assessee, the learned CIT(A) also confirmed the addition made by the AO. 14. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 15. Both the learned AR and the learned DR before us agreed that the issue on hand has been covered against the assessee by the judgment of Hon ble Jurisdictional High Court in case of CIT vs. Gujarat State Road Transport Corporation reported in (2014) 366 ITR 170 (Guj). 16. We have heard both the parties and perused the materials available on record. At the outset, we note that the impugned issue has been covered against the assessee by the order of the Hon ble Gujarat High court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering the above position, it is clear that any waiver of loan is a benefit accruing to the assessee by virtue of his running the business and so is taxable under section 28(iv). There is no denying the fact that loan was taken in connection with the business of the assessee and has been written off by the creditor. Thus, the amount is taxable and the assessee was not justified in reducing it from computation of its income. This ground of appeal is dismissed. 21. Being aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. 22. The Ld. AR before us submitted that the fact of the cases referred by the Ld. CIT-A in his order are distinguishable from the present fact of the case. As per the Ld. AR, the Hon ble Gujarat High Court in the case of PCIT v/s Gujarat State Financial Corporation reported in 122 taxmann.com 101 after considering the judgment of Hon ble SC in the case of T.V Sundaram Iyengar Sons Ltd. has held that the waiver of loan which was not claimed on revenue account cannot be treated as cessation of trading liability within the meaning of the provision of section 41(1) of the Act. 23. On the other hand, the Ld. DR contended that the assessee has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of section 28 (iv) of the Act. 25.2 The next aspect arises whether such waiver of loan can be brought to tax under the provisions of section 41(1) of the Act. To bring any item under the net of income in pursuance to the provisions of section 41(1) of the Act, there has to be recovery either in cash or in-kind in respect of loss, expenditure or trading liability which was allowed as deduction in any of the assessment year. Thus, first, we have to see whether the waiver of loan in the given case represents the loan for the acquisition of the capital assets or it represents the working capital loan. Again, if the loan is in a capital account, used for the purpose of the fixed assets, then the assessee cannot be made subject to tax under the provisions of section 41(1) of the Act. In holding so, we draw support and guidance from the judgement of Hon ble Supreme Court in the case of CIT vs. Mahindra and Mahindra Ltd (supra) where it was held as under: 15. On a perusal of the said provision, it is evident that it is a sine qua non that there should be an allowance or deduction claimed by the assessee in any assessment for any year in respect of loss, expenditure or trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee within the provisions of section 41(1) of the Act. In holding so, we draw support and guidance from the judgement of Hon ble Delhi High Court in the case of Logitronics (P) Ltd vs. CIT reported in 9 taxmann.com 302 wherein it was held as under: 23. In the context of waiver of loan amount, what follows from the reading of the aforesaid judgment is that the answer would depend upon the purpose for which the said loan was taken. If the loan was taken for acquiring the capital asset, waiver thereof would not amount to any income exigible to tax. On the other hand, if this loan was for trading purpose and was treated as such from the very beginning in the books of account, as per T.V. Sundaram Iyengar Sons Ltd.'s case (supra), the waiver thereof may result in the income more so when it was transferred to Profit and Loss account. 25.4 Coming to facts of the case on hand, the AO treated the impugned waiver of loan as income of the assessee for the reason that the assessee has not furnished the explanation regarding why the amount has been waived off as well as assessee failed to furnish necessary details regarding genuineness of the transaction and creditworthin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
