1 ITA No. 497/Nag/2016. IN INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. No. 497/Nag/2016 Assessment Year : 2007-08. Goenka Vasant Kumar Vinay Kumar, Income-tax Officer, Akola. Vs. Ward-1, Akola. PAN ACFPG8530J. Appellant. Respondent. Appellant by : Shri K.P. Dewani. Respondent by : Smt. Agnes P. Thomas. Date of Hearing : 06-10-2016 Date of Pronouncement : 7th Oct., 2016 O R D E R. This appeal by assessee is directed against order of learned CIT(Appeals)-I, Nagpur dated 02-06-2016 and pertains to assessment year 2007-08. grounds of appeal read as under : 1. order passed is illegal, invalid and bad in law. 2. learned A.O. erred in making addition at Rs.2,75,000/- under section 40(a)(ia) of I.T. Act, 1961 on account of non-deduction of TDS on lease rent paid during year. 3. Hon ble CIT(A) erred in upholding addition made by A.O. at Rs.2,75,000/- u/s 40(a)(ia) of I.T. Act, 1961. 4. assessee denies liability to pay interest under section 234A, 234B, 234C and 234D of I.T. Act, 1961. Without prejudice, levy of interest under section 234A, 234B, 234C and 234D of I.T. Act, 1961 is unjustified, unwarranted and excessive. 2. In this case AO made addition of Rs.2,75,000/- u/s 40(a)(ia) on account of non deduction of TDS on payment made for lease rent. assessee 2 ITA No. 497/Nag/2016. submitted before learned CIT(Appeals) that lease rent was actually paid during year and amount was not payable or outstanding. Learned counsel of assessee has submitted before learned CIT(Appeals) that there are conflicting decisions on this issue, that there is no jurisdictional High Court decision. assessee s plea to follow High Court decision in favour of assessee particularly Allahabad High Court decision SLP against which had been dismissed by Hon ble Apex Court was not accepted by learned CIT(Appeals). learned CIT(Appeals) in his wisdom chose to follow decision of Hon ble Punjab & Haryana High Court and held that provisions of section 40(a)(ia) are applicable even when said amount has been paid and is not outstanding at close of year. 3. Against this order assessee is in appeal before ITAT. 4. Learned counsel of assessee in this regard placed reliance upon decision of this ITAT in ITA No. 333/Nag/2014 in case of M/s Chadda Transport vide order dated 25-02-2016 wherein identical issue had been discussed. Hence he pleaded that same view may also be adopted in this case . 5. Per contra learned D.R. relied upon orders of learned CIT(Appeals) and also submitted that learned CIT(Appeals) has considered latest Hon ble Punjab & Haryana High Court decision. Hence she pleaded that orders of Learned CIT(Appeals) should be upheld. 6. I have carefully considered submissions and perused records. I find that this ITAT in identical situation in case of Chadda Transport (supra) considered similar issue as under : 12. We have carefully considered submissions and perused records. First we deal with issue on ground that provisions of section 40(a)(ia) are not attracted inasmuch as entire freight expenditure is paid and nothing is payable as on 31-03-2007. facts in 3 ITA No. 497/Nag/2016. this regard are undisputed. assessee s plea is that entire freight amount was paid and nothing is payable as on 31-03-2007, and that this is duly reflected by perusal of balance sheet/profit & loss account where no amount is payable as on 31-03-2007. In this regard learned counsel of assessee has placed reliance upon CIT vs. Vector Shipping Services (P) Ltd. 357 ITR 642 (All.). In said case Hon ble Allahabad High Court has upheld finding that when expenses incurred by assessee is totally paid and not remained payable as at end of relevant accounting period, provisions of section 40(a)(ia) are not applicable. Hion ble High Court in para 10 of order has concluded as under : It is to be noted that for disallowing expenses from business and provision on ground that TDS has not been deducted, amount should be payable and not which has been paid by end of year. 13. Revenue s appeal against above said decision of Hon ble Allahabad High Court was dismissed by Hon ble Apex Court in CC No. 8068/2014 vide order dated 02-07-2014. Hon ble Apex Court has held as under : Heard Mr. Mukul Rohatgi, learned Attorney General, for petitioner. Delay in filing and refilling special leave petition is condoned. Special leave petition is dismissed. We are also aware that there are certain other Hon ble High Court decisions wherein this proposition has not been upheld that provisions of section 40(a)(ia) are attracted only when amount is payable. However, we note that there is no jurisdictional High Court decision on this issue. In such situation we now have Hon ble Allahabad High Court decision which is in favour of assessee. Revenue Department s petition for special leave to appeal has been dismissed by Hon ble Apex Court by condoning delay in filing leave petition. In such situation, in our considered opinion, decision of Hon ble Apex Court in case of CIT vs. Vegetable Products Ltd. 188 ITR 192 has to be followed. In said decision Hon ble Apex Court has expounded that in case there are two views possible, view in favour of assessee should be followed. Accordingly in absence of any jurisdictional High Court decision, we respectfully follow decision of Hon ble Allahabad High Court in case of Vector Shipping Services (P) Ltd. as above. Accordingly since no amount of freight was unpaid or was payable as on 31-03-2007 we hold that provisions of section 40(a)(ia) 4 ITA No. 497/Nag/2016. are not attracted and in this view of matter we are of opinion that Revenue s appeal is liable to be dismissed. 7. I find that above adjudication is fully applicable on facts of this case. It is settled law that when there is no jurisdictional High Court decision and there are conflicting decisions of other High Courts, decision in favour of assessee should be adopted. This proposition is duly supported by Hon ble Apex Court decision in case of Vegetable Products 88 ITR 192. In background of aforesaid discussion and precedent, I find that order of learned CIT(Appeals) is not at all sustainable. Hence I set aside same and decide issue in favour of assessee. 8. In result, this appeal filed by assessee stands allowed. Order pronounced in Open Court on this 7th day of Oct., 2016. Sd/- ( SHAMIM YAHYA) ACCOUNTANT MEMBER. Nagpur, Dated: 7th Oct. , 2016. Copy forwarded to : 1. Goenka Vasant Kumar Vinay Kumar, Prop. Goenka Cotton Traders, Nishant Towers, M.G. Road, Akola-444001. 2. I.T.O., Ward-1, Akola. 3. C.I.T.- I, Nagpur. 4. CIT(Appeals), -I, Nagpur. 5. D.R., ITAT, Nagpur. 6. Guard File True Copy By Order Assistant Registrar, Income Tax Appellate Tribunal, Nagpur Bench, Nagpur. Goenka Vasant Kumar Vinay Kumar v. Income-tax Officer, Ward-I, Akola