M/S. Geeyem Motors P.Ltd. Ltd, Cochin vs Assessee
- CitationI.T.A. No. 532/Coch/2014
Ratio decidendi
The rule this decision rests on
Section 40(a)(ia) of the Income-tax Act does not apply where the assessee has deducted tax at source but at a lower rate than prescribed, since the provision does not envisage a case of short or lesser deduction of tax, as contemplated by section 201(1A); a disallowance founded on such short deduction is therefore unjustified and must be deleted.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
M/s. Geeyem Motors P. Ltd., Vs. The Assistant Commissioner of 11/346, NH-47, Bye Pass, Income-tax, Circle-1(2), Kochi. Nettoor P.O., Kochi-682304. [PAN: AABCG 8860A]
(Assessee-Appellant) (Revenue-Respondent)
Assessee by Shri Mathew Joseph, CA Revenue by Shri K.K. John, Sr. DR
Date of hearing 11/05/2015 Date of pronouncement 11/05/2015
ORDER
Per B.R.BASKARAN, Accountant Member:
This appeal by the assessee is directed against the order dated 23-09-
2014 passed by the Ld. CIT(A)-II, Kochi and it relates to the assessment year
2010-11.
2. The assessee is aggrieved by the decision of the Ld. CIT(A) in confirming
the disallowance of Rs.28.99 lakhs u/s. 40(a)(ia) of the I.T. Act. 2 I.T.A. No.532/Coch/2014
3. We heard both the parties and perused the record. The facts are that the
assessee had paid a sum of Rs.57,39,578/- as advertising charges to M/s. KPB
Advertising P. Ltd.. However the assessee had deducted tax at source at the
rate of 1% u/s. 194C of the Act as against the prescribed rate of 2%. Hence the
Assessing officer disallowed 50% of the payment, i.e, 28,99,337/- by invoking
the provisions of sec. 40(a)(i) of the Act for short deduction of tax at source.
The Ld. CIT(A) also confirmed the same.
4. At the time of hearing, both the parties agreed that this issue is covered
by the decision of the Co-ordinate Bench dated 29-05-2013 passed in the case of
Apollo Tyres Ltd. in I.T.A. No. 31/Coch/2010 relating to the assessment year
2006-07. The Ld. AR furnished a copy of the said order.
5. On going through the order of the Tribunal referred above, we notice that
the Co-ordinate Bench, has inter alia, followed the decision of the Hon'ble
Calcutta High Court in the case of M/s. S.K. Tekriwal in ITAT No.183 of 2012 GA
No.2069 of 2012 dated 03/12/2012 and has finally held that section 40(a)(ia)
does not envisage a situation where there was short deduction/lesser deduction
as in the case of section 201(1A) of the Act.
6. Following the above said judgment, we also hold that the impugned
disallowance is not justified since it is a case of short deduction of tax at source. 3 I.T.A. No.532/Coch/2014
Accordingly, we set aside the order of the Ld. CIT(A) on this issue and direct the
Assessing officer to delete the impugned disallowance.
7. In the result, the appeal filed by the assessee is allowed.
Pronounced in the open court on 11-05-2015
sd/- sd/-
(V. DURGA RAO) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Place: Kochi Dated: 11th May, 2015 GJ Copy to:
1. M/s. Geeyem Motors P. Ltd., 11/346, NH-47, Bye Pass, Nettoor P.O., Kochi-682304.
2. The Assistant Commissioner of Income-tax, Circle-1(2, Kochi.
3. The Commissioner of Income-tax(Appeals)-II, Kochi.
4. The Commissioner of Income-tax, Kochi.
5. D.R., I.T.A.T., Cochin Bench, Cochin.
6. Guard File.
By Order
(ASSISTANT REGISTRAR) I.T.A.T., Cochin
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