ITAT dismissed the application as the tax effect was less than Rs 10 lakhs
ITAT dismissed the application as the tax effect was less than Rs 10 lakhs
The Revenue filed a miscellaneous application pleading that at the time of filing of the appeal, the disputed addition was more than the monetary limits as prescribed by the CBDT. The total disputed addition and tax effect in this appeal were of Rs.11,86,638 and Rs. 4,03,338. The ITAT held that in view of the CBDT Circular 21/2015, the application was not maintainable as the tax effect was less than Rs 10 lakhs.
1. The assessee derived income from insurance commission. Out of the commission he so received, the assessee had claimed to have paid R.10,45,400/- as referral commission to four individuals. Admittedly, however, no tax was deducted at source from the payments so made. It was in this back drop that the Assessing Officer disallowed, by invoking section 40(a)(ia), payment of commission amounting to Rs.10,45,400/-.
2. CIT(A) upheld the order of the AO.
3. On appeal, the ITAT held as under:
“We have noted that as held by the Hon'ble Delhi High Court in the case of CIT vs. Ansal Landmark Township (P) Ltd, 377 ITR 635 (Delhi) the second proviso to section 40(ia) even though it is stated to be effective from 01.04.2013 is to be taken as retrospective in effect and, therefore, as long as recipients of the income have discharged their tax liability, disallowance under section 40a(ia) cannot be made. As we note this legal proposition, we are alive to this fact that the authorities below have not addressed themselves to this aspect of the matter. In view of this legal and factual position, we deem it fit and proper to remit the matter to the file of Assessing Officer for the factual verification as embedded in the above legal proposition on the fact of this case. In the event of recipients of referral commission having duly discharged their tax liabilities, obviously there cannot be any occasion for disallowance under section 40(a)(ia) of the Act. In any other case, the matter is to be examined on merits and the arguments that the assessee seeks to advance regarding non application of section 194D on fact of this case may also to be examined by the Assessing Officer. Our dealing with the arguments of the assessee in respect of non application of section 194D will be somewhat academic at this stage. We, therefore, refrain from making any observation on merits and remit the matter to the file of Assessing Officer with our directions as above.”
Case Reference-Before Shri N.V Vasudevan, Judicial Member, and Shri M.Balaganesh, Accountant Member Misc. Application No. 99/Kol/2015 [ Arising out of ITA No. 1651/Kol/2013 A.Y 2007-08 ] I.T.O Ward 2(1), Asansol Vs. Vinod Jumrani
IN THE INCOME TAX APPELLATE TRIBUNAL : BENCH ' SMC' : KOLKATA
