Case Law Details
DCIT Vs Daawat Foods Ltd. (ITAT Delhi)
Conclusion : In present facts of the case, there were issues pertaining to disallowance under Section 40A(3); disallowance u/s 14A read with Rule 8D; short deduction of TDS u/s 40(a)(ia); undisclosed sales/difference in stock valuations and deduction u/s 80IB (11A) of the Income Tax Act, 1961. All these issues have gone into the favour of the Appellant/ Assessee, most of them were covered by the Assessee’s own previous case serving best precedents.
Held : The first main point in the present case was pertaining to disallowance under Section 40A(3), wherein the amount was paid in respect of freight payments made to transporters and truck operator inter-alia for purchase of paddy. The Ld. AR submitted that this issue is decided against the assessee in its own case for A.Y. 2008-09 in ITA No. 4158/Del/2013. The Hon’ble tribunal observed that no distinguishing facts brought out by the assesse as well as the revenue and as the issue is already covered in the earlier case, therefore the appeal of the assesse pertaining to this issue was allowed.
The second point in the present case pertains to disallowance of Rs. 5,10,020/- u/s 14A read with Rule 8D, wherein the assesse submitted that the amount was received as share in partnership which was claimed as exempted u/s 10 of the Income Tax Act, 1961. Further, it was submitted that AO erred in making disallowance under Section 14A of the Act without recording his satisfaction for denying the claim made by the Assessee and also submitted that under Rule 8D (2)(iii), what is disallowable is an amount equal to 1/2 percentage of the average value of investment, the income from which does not or shall not form part of the total income for which corresponding charts were submitted. The Hon’ble Tribunal observed that the contentions of the assesse were correct and as per the chart given by the assessee, the AO was directed to verify the same and the assessee be given opportunity of hearing by following principles of natural justice. Ground No. 8 and 9 are partly allowed for statistical purpose.
The third point in the present case pertains to short deduction of TDS u/s40(a)(ia), wherein the assessee submitted that the issue relating to non deduction of TDS is decided against the assessee in its own case for A.Y. 2008-09 in ITA No. 4158/Del/2013 vide order dated 19.01.2021, wherein it is held that no disallowance under Section 40(a)(ia) is sustainable in cases of short-deduction of TDS. This view is also decided by the Tribunal in case of LT Foods Ltd., a group company in ITA No. 4164/Del/2013 for A.Y. 2007-08 in favour of the assessee therein. The submissions were accepted by the Hon’ble tribunal and assesse was provided relief on this point.
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