CA. Naresh Jakhotia

TAX TALK-23.01.2012-THE HITAVADA TAX TALK BY CA. NARESH JAKHOTIA (Chartered Accountant) “NON SUBMISSIONS OF FORM NO. 15H WOULD NOT ATTRACT DISALLOWANCE U/S 40(a)(ia)” Query 1] Sir, in our case disallowance of expenses has been made u/s. 40 (a) (ia) of Income Tax Act for the A.Y. 2009-10 on the only ground that a copy of form No. 15H was not filed in the office of CIT as required U/s. 197A(2). The original form No. 15H received from the creditors were filed during the assessment proceeding which is evident from the Assessment Order itself. Whether disallowance U/s. 40(a) (ia) of Interest Expenses can be made by ITO on the facts stated above? Please enlighten of the problem supported by some judicial citations. [ maheshkhushalani59@yahoo.com ] Opinion: 1. Various sub-sections of Section 197A require a declaration to be filed by the payee to the payer and the same is filed, the payer has no choice except to desist from deducting tax from the payment. The sub-section uses the word “shall”

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH “A” AHMEDABAD Before S/Shri Mukul Kr. Shrawat, JM and D.C.Agrawal, AM Val ibhai Khanbhai Mankad, Prop. Abad Roadways, 35- A, Tasl im Society, Nr. Bibi Talav, Vatva, Ahmedabad. Vs. Dy. CIT (OSD), Circle-9, Ahmedabad. (Appellant) .. (Respondent) Appellant by :- Shri A. C. Shah, AR Respondent by:- Shri Ani l Kumar, CIT, DR O R D E R Per D.C. Agrawal, Accountant Member. This is an appeal filed by the assessee raising following grounds :- 1. The ld. CIT(A) has erred in confirming the disallowance of Rs.7,93,34,193/- u/s 40(a)(ia) on the ground that the assessee has filed Form No.15J with CIT on 26.02.2009 instead of on or before 30th June, 2006 in as much the there is no failure to deduct tax at soure under section 194C since the assessee has received Form No.15-I from the sub-contractors before making payment to them. 1.1 There may be a failure to file Form No.15J in time but there is no failure to deduct tax at source. Therefore,

Disallowance of interest under s 40(a)(ia) The assessee’s claim that he had the declarations of the payees in the prescribed form before him at the time when the interest was paid, was not liable to deduct tax therefrom under s 194A and no disallowance can be made under s 40(a)(ia) is accepted in absence of any direct evidence produced by revenue — as held by MumTrib in Vipin P Mehta v ITO — In favour of: The Assessee ; ITA No. 3317 (Mum.) of 2010 : Assessment Year: 2006–2007 Decided on: 20 May 2011 Section 197A(1A) merely requires a declaration to be filed by the payee of the interest, and once it is filed the payer of the interest has no choice except to desist from deducting tax from the interest. Vipin P. Mehta v ITO ITAT, Mumbai ITA No. 3317 (Mum.) of 2010 Assessment Year: 2006-07 R.V. Easwar, President and R.K. Panda, AM Decided on: 20 May 2011 Counsel appeared: Satish R. Mody for the appellant Vijay Shankar for the respondent Order R.V. Easwar, President 1. This is an appeal by

, – “ ”, , IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : KOLKATA [ . . , -, ! " , - ] [Before Hon’ble Shri S.V. Mehrotra, AM & Hon’ble Shri Mahavir Singh, JM "# / I.T.A No. 1753/Kol/2009 !$% &/'Assessment Year : 2006-07 M/s. Capital Transport Corporation -vs.- Income Tax Officer/Ward-56(3) Of India, Kolkata [PAN : AABFC 9559 K] Kolkata. [ )* /Appellant] [,-)*/Respondent] )*/ For the Appellant : Shri S. M. Surana ,-)*/ For the Respondent : Shri S. K. Roy - ./ORDER . . , - Per S. V. Mehrotra, A. M. The assessee has preferred this appeal for assessment year 2006-07 against order of Ld. CIT(A)-XXXVI, Kolkata dated 21.08.2009. The grounds of appeal raised by the assessee read as under :- 1. For that on the facts and in the circumstances of the case the Commissioner of Income Tax (Appeals) has erred in disallowing lorry hire payment of Rs.24,74,376/- U/s.40(a)(ia) of the

ITO Vs Rajesh Kr Garg (ITAT Kolkata) ITAT Kolkata I.T.A No. 532/Kol/2011 Assessment Year: 2006-07 ORDER This appeal by revenue is arising out of order of CIT(A)-XXXVI, Kolkata in Appeal No.546/CIT(A)-XXXVI/Kol/Wd-56(3)/08-09 dated 17.01.2011. Assessment was framed by ITO, Ward-56(3), Kolkata u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2006-07 vide his order dated 31.12.2008. 2. The first issue in this appeal of the revenue is against the order of CIT(A) deleting the addition made by Assessing Officer by invoking provisions of section 40(a)(ia) read with section 194C(3) sub-clause (i) of the Act inspite of non-filing of Form No. 15J under Rule 29D of I. T. Rules, 1962. For this, revenue has raised following ground no.1:“1) That on the facts and circumstances of the case, the Ld. CIT(A) erred in law in deleting addition of Rs.28,01,585/- u/s. 40(a)(ia) of the I. T. Act, 1961 in spite of non filing of Form No. 15J as required under th

TAX TALK-16.01.2012-THE HITAVADA TAX TALK BY CA. NARESH JAKHOTIA (Chartered Accountant) “AMENDMENT IN SECTION 40(a)(ia) BEING REMEDIAL/CURATIVE IN NATURE, HAVE RETROSPECTIVE APPLICATION” Query 1] Sir, in my case, disallowance of expenses has been made u/s 40 (a)(ia) of the I.T. Act for the A.Y. 2009-10 due to late payment of TDS on rent & transportation expenses paid to various parties during the months of January and February 2009 on 15.06.2009. Please elaborate the consequences of this disallowance? How will the expenses be allowed in the Assessment Year 2010-11? Whether it can be corrected by making an application u/s 154 or I have to revise my return filed for the A.Y. 2010-11? What will be the interest payable/consequences? What will be the implications of penal proceedings u/s 271(1)(c)? Whether disallowance u/s 40(a)(ia) will be treated as filing of inaccurate particulars of income & made liable to penalty u/s 271(1)( c)? Please give case laws if any on the matter. It wi

TAX TALK-09.01.2012-THE HITAVADA TAX TALK BY CA. NARESH JAKHOTIA (Chartered Accountant) “CORRECTION IN INCOME TAX CHALLAN” Query 1] I had deposited Advance Tax on 10/06/2009 of Rs. 3,000/- in a Nationalized Bank at Pune. I had written my name and PAN correctly. I received the counterfoil & submitted the same with my IT Return for A.Y. 2010-11 along with other tax payments counterfoils. Recently I received Tax Refund and observed that it is lesser by Rs. 3,000/- than actually claimed refund. On taking up the matter with the concerned Ward office, I was told that the credit is not appearing in my A/c for the said Rs. 3,000/- deposited by me on 10.06.2009. I took up the matter with Bank who issued me a computer Generated Receipt (In Annexure A-IV-II). I observed that Bank has entered wrong PAN No. while remitting funds to Govt. though counterfoil of IT challan shows correct PAN. The name mentioned is correct. I request you to please guide me as to take steps for refund of Rs. 3,000/-

TAX TALK-02.01.2012-THE HITAVADA TAX TALK BY CA. NARESH JAKHOTIA (Chartered Accountant) “OWNERSHIP IS A CONDITION PRECEDENT FOR CLAIMING DEDUCTION U/S 24(b) & U/S 80C” Query 1] 1. Please refer to the Tax Talk dated 30.05.2011 wherein it is mentioned in reply to the first part of Query No. 1 that ”Ownership is a condition precedent for claiming deduction towards Interest on housing loan u/s 24(b) & towards Principal repayment u/s 80C of the Income Tax Act -1961. Without ownership, deduction claim shall not be admissible.” 2. I am a DDO of PSU. The sale deed of the land is in the name of the wife of our employee. However, the employee (along with wife) has taken housing loan from the bank and repaying the same, and wants to claim deduction u/s 24 and 80C for self occupied property. 3. On the basis of your opinion in Tax Talk dated 30.05.2011 & Opinion of Shri A.N. Shanbhag in Hitavada Dated 23.05.2011, we have refused claim for deduction u/s 24(b) & U/s 80C in respect of