CIT Vs Samsung Heavy Industries Company Limited (Uttarakhand High Court)
Uttarakhand High Court held that Section 40(a)(ia) of the Income Tax Act, 1961 cannot be made applicable to short deduction of tax at source and the disallowance made was rightly directed to be deleted. Accordingly, writ of revenue dismissed.
Facts- Samsung Heavy Industries Company Limited (respondent) filed its return of income u/s. 139(1) of the Income Tax Act, 1961 on 29.09.2012, declaring an income of ₹51,79,380/-. The return was selected for scrutiny assessment and the final assessment order was passed under Section 143(3) of the Income Tax Act at total income of ₹117,11,60,400/-.
CIT(A), vide his order dated 19.12.2016, partly allowed the Appeal of the assessee but uphold the additions of ₹2,81,90,744/- and ₹4,20,03,868/- made for short-deduction of tax at source u/s. 40(a)(ia) in respect of payments made for Interior and Electrification Works. ITAT allowed the appeal filed by the assessee. Being aggrieved, the present writ is preferred.
Conclusion- Held that this Court has no hesitation in upholding the finding returned by learned Income Tax Appellate Tribunal, wherein it has held that Section 40(a)(ia) of the Income Tax Act, 1961 cannot be made applicable to short deduction of tax at source and the disallowance made was directed to be deleted. This finding of learned Income Tax Appellate Tribunal is based on the judgment rendered by Hon’ble Calcutta High Court in the case of Commissioner of Income Tax Vs. S.K. Tekriwal (supra). Learned Income Tax Appellate Tribunal have negated the submission of the revenue, which relied on the decision of Kerala High Court in the case of Commissioner of Income Tax Vs. PVS Memorial Hospital Ltd.(supra), by relying on the judgment passed by the Hon’ble Apex Court in the case of “Commissioner of Tax Vs. Vegetable Products”, reported in [1973] 88 ITR 192 (SC), wherein it was held that when there are divergent views of various non-jurisdictional High Courts on an identical issue, the construction that is favorable to the assessee should be considered.
