Case Law Details
Vivek Bhole Architects Pvt. Ltd. Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that amendment to section 40(a)(ia) of the Income Tax Act vide the Finance (No.2) Act, 2014 is effective from 01/04/2015 and shall be applicable from the Assessment Year 2015-2016.
Facts- During the assessment proceedings, on perusal of the details of interest expenses furnished by the assessee, it was observed that the assessee has claimed interest on vehicle loans/other loans of Rs.40,42,961 as interest expenses. It was further observed that the aforesaid interest has been paid to Tata Capital, Kotak Mahindra P. Ltd., Reliance Capital Ltd., and Shagun Corporation without deduction of tax at source. Accordingly, the Assessing Officer vide order dated 31/03/2015 passed under section 143(3) of the Act disallowed the interest on vehicle loans/other loans of Rs.40,42,961 under section 40(a)(ia) of the Act for non-deduction of tax at source. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee. Being aggrieved, the assessee is in appeal before us.
Conclusion- CBDT, while explaining the provisions of the Finance (No.2) Act, 2014, vide Circular No.1 of 2015 dated 21/01/2015 clarified that the amendment by the Finance (No.2) Act, 2014 to the provisions of section 40(a)(ia) of the Act takes effect from 1st April 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent years. We further find that the Hon’ble Supreme Court in Shree Choudhary Transport Company vs ITO, [2020] 426 ITR 289 (SC) held that the amendment by the Finance (No.2) Act, 2014 is with effect from 01/04/2015 and shall be applicable from the assessment year 2015-16. Since the amendment to section 40(a)(ia) of the Act by the Finance (No.2) Act, 2014 is with effect from the assessment year 2015-16, therefore, the said amendment is not applicable to the year under consideration. As a result, the additional ground raised by the assessee is dismissed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
