Colo Colour Pvt. Ltd. vs. ITO-Ward-6(2)(1)

Parties Involved

Facts Summary

The assessee, Colo Colour Pvt. Ltd., filed a return of income on 11.10.2018 declaring a loss of Rs.21,41,595/-. The return was selected for scrutiny assessment and statutory notices under the Income-tax Act, 1961 were issued and complied with. The Assessing Officer observed that the assessee debited interest payments totaling Rs.9,38,61,640/- but no tax was deducted at source, leading to a disallowance of Rs.2,81,58,492/- under section 40(a)(ia) of the Act. The assessee appealed against this disallowance, arguing that tax had not been deducted at source due to Form 15G/15H submitted by the recipients. The Commissioner of Income-tax (Appeals) upheld the disallowance, finding that the assessee had incorrectly accepted the Form 15G/15H as the recipients' income exceeded the maximum amount not chargeable to tax. The assessee further appealed to the Income Tax Appellate Tribunal, which allowed the appeal for statistical purposes and directed the matter to be restored to the Assessing Officer for verification of additional evidence.…

Legal Issues

• 1. Disallowance of interest under section 40(a)(ia) of the Income-tax Act, 1961
• 2. Claim for invoking proviso to section 201 of the Act

Judgment Outcome

Decided in favour of Assessee.

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