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TMI Blog2025 (2) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 144C(1) r.w.s 143(3) of the Income-tax Act, 1961 (hereinafter "the Act") on 23.12.2016. 2. The assessee has raised the grounds of appeal as under: "The Appellant respectfully submits that: On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) 1, Coimbatore ['CIT(A)'] has erred in passing the order under section ('u/s') 250 of the Income Tax Act, 1961 ('Act'), partly confirming the adjustments made by the learned Deputy Commissioner of Income Tax, Company Circle I(1), Coimbatore ('AO') in the assessment order passed u/s 143(3) read with section 144C of the Act. Each of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired to be deducted at source on discount extended to pre-paid distributors; 2.4 Without prejudice to the above grounds, on the facts and circumstances of the case and in law, the learned CIT(A)/AO has erred in not restricting the disallowance urider section 40(a)(ia) of the Act to the amount which remains payable at the end of the year, which stands at 'NIL". 2.5 Without prejudice to the above grounds, on the facts and circumstances of the case and in law, the learned CIT(A)/AO has erred in not adjudicating and holding that the insertion of second proviso to section 40(a)(ia) of the Act vide Finance Act, 2012 is curative in nature and its benefit should be extended to the past years and accordingly the learned AO be directed: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in concluding that the year-end accruals, created on a best estimate basis to ascertain the financial results for the year, are subject to tax deduction at source under Chapter XVII-B of the Act. 3.3 Without prejudice to the above, on the facts and circumstances of the case and in law, the learned CIT(A)/AO has erred in not allowing deduction for year-end accruals disallowed in the assessment order passed for AY 2009-10, which were reversed in the beginning of the financial year relevant to the subject assessment year. 4. Ground No. 4-Disallowance of club entrance fee/subscription charges. 4.1 On the facts and circumstances of the case and in law, the learned CIT(A)/AO has erred in making an addition of INR 58,337 towards c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 160 taxmann.com 12 (SC), wherein the Hon'ble Supreme Court has held that Section 194H of the Act is not applicable in respect of payment made by the distributor/franchise. The Ld. AR further submitted that Hon'ble ITAT, Delhi Benches in the case of Vodafone Idea Ltd. (successor to Vodafone Mobile Services Ltd.) for A.Y 2012-13 dated 05.06.2024 in ITA No.37/Del/2023 relying the decision of Hon'ble Supreme Court has deleted such disallowances. The Ld DR could not controvert Ld. AR's argument. As the issue is squarely covered in favour of the assessee by the decision of Hon'ble Supreme Court, supra, the disallowances made by AO is not sustainable. The ground of appeal is accordingly allowed. 5. Ground No.3 is against disallowance of year-end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g principle. The AR argued that the provision has been reversed on the next day at the beginning of financial year. The Ld AR has submitted that this issue is covered in favour of the assessee by the decision of Hon'ble Karnataka High Court in the case of Subex Ltd. vs. DCIT [2023] 148 taxmann.com 271 (Karnataka) and the order of Hon'ble ITAT, Mumbai Bench in the case of Mahindra & Mahindra Ltd. v. DCIT [2012] 24 taxmann.com 267 (Mumbai-Trib.). 5.3 The Ld. Departmental Representative (DR), on the other hand, has relied on the order of Ld. CIT(A). 5.4 We have heard the rival submissions, and perused the materials available on record. The A.O has disallowed the year end provision debited on the last day of accounting u/s 40(a)(ia). The prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal... If the deduction is not claimed for the expenditures made in the provision even in the return submitted and the same is offered to tax in the subsequent year after reversing the entries pursuant to the receipt of the bills/invoices by the payees, the matter has to be analysed having regard to, whether income has accrued to the payees to deduct tax at source." 12. We may record that it was argued by Shri. Chaithnaya that assessee had deducted tax at source in subsequent year in accordance with the provisions of Chapter XVII-B and remitted within the due date and the same was not refuted. 13. So far as the authority in Palam Gas Service (supra), it is relevant to note that the payees were identified in that case as recorded in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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