Disallowance 15-g
This query is : Resolved
21 September 2011
CASE:
ONE OF MY CLIENT HAS PAID RS. 164100
AS INTEREST TO THIRD PERSON
SINCE THAT PERSON HAS GIVEN 15-G, NO TDS WAS DEDUCTED FOR INTEREST.
HOWEVER THE I.T. OFFICER HAS ISSUED A SHOW CAUSE NOTICE TO DISALLOW THE INTEREST U/S.40(a)(ia) DESPITE SUBMITTING 15-G IN TIME.
IS HE RIGHT BY DISALLOWING THE INTEREST DESPITE SUBMITTING 15-G ?
ONE OF MY CLIENT HAS PAID RS. 164100
AS INTEREST TO THIRD PERSON
SINCE THAT PERSON HAS GIVEN 15-G, NO TDS WAS DEDUCTED FOR INTEREST.
HOWEVER THE I.T. OFFICER HAS ISSUED A SHOW CAUSE NOTICE TO DISALLOW THE INTEREST U/S.40(a)(ia) DESPITE SUBMITTING 15-G IN TIME.
IS HE RIGHT BY DISALLOWING THE INTEREST DESPITE SUBMITTING 15-G ?
21 September 2011
No but such 15 G form will not be in good means it will not be issued within 7th date of next month of transaction or the details furnished under it will be falsified.
21 September 2011
NO, ALL THE DETAILS ARE PROPERLY DONE
21 September 2011
the action of AO is not correct'
In Shri Vipin P.Mehta, v. ITO (2011) 39 (II) ITCL 408 (Mum ‘F’-Trib) The assessee submitted that all the payees to whom the interest aggregating to Rs.7,87,291 was paid had furnished declarations in form No. 15H/15G, as the case may be, before the date on which tax ought to have been deducted and therefore the assessee was not liable to deduct the tax. It was therefore pleaded that section 40(a) (ia) was not applicable to the assessee’s case since it would apply only if the assessee was required to deduct the tax, but had not deducted the same. The assessee also submitted that by oversight he did not submit the copies of the declarations in Form No. 15G/15H to the office of the CIT (TDS) and that these forms were recently submitted to him.
on these facts the ITAT held that since the assessee had the declarations of the payees in the prescribed form before him at the time when the interest was paid, he was not liable to deduct tax therefrom under section 194A. If he was not liable to deduct tax, section 40(a) (ia) was not attracted. Therefore, the assessee’s appeal was accepted and disallowance of interest of Rs. 7,87,291 was deleted.
CA MANOJ GUPTA
JODHPUR
09828510543
In Shri Vipin P.Mehta, v. ITO (2011) 39 (II) ITCL 408 (Mum ‘F’-Trib) The assessee submitted that all the payees to whom the interest aggregating to Rs.7,87,291 was paid had furnished declarations in form No. 15H/15G, as the case may be, before the date on which tax ought to have been deducted and therefore the assessee was not liable to deduct the tax. It was therefore pleaded that section 40(a) (ia) was not applicable to the assessee’s case since it would apply only if the assessee was required to deduct the tax, but had not deducted the same. The assessee also submitted that by oversight he did not submit the copies of the declarations in Form No. 15G/15H to the office of the CIT (TDS) and that these forms were recently submitted to him.
on these facts the ITAT held that since the assessee had the declarations of the payees in the prescribed form before him at the time when the interest was paid, he was not liable to deduct tax therefrom under section 194A. If he was not liable to deduct tax, section 40(a) (ia) was not attracted. Therefore, the assessee’s appeal was accepted and disallowance of interest of Rs. 7,87,291 was deleted.
CA MANOJ GUPTA
JODHPUR
09828510543
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22 September 2011
THANK YOU SO MUCH SIR
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