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On verification of the assessment record, the ld. PCIT found from the profit and loss account for the year ending 31.3.2014 that besides interest expenses to other parties, the assessee has claimed an expenditure of Rs. 76,772/- under the head “interest on tanker loan”. Further, ongoing through the details on the record, he noticed that the assessee had borrowed capital from M/s. Magma Financial Corporation, a non-banking financial company (NBFC) engaged in the activities of financing loans for acquiring assets. As per section 194A of the i.T.Act, the assessee was required to deduct tax at source on payment of interest to the above NBFC and such deducted amount was required to be credited to the Central Government Account, however, no tax was deducted u/s.194A of the Act and, accordingly, the expenditure of Rs. 76,772/- claimed under the head interest on tanker loan’ was required to be disallowed u/s.40(a)(ia) of the Act. Ld PCIT observed that since tax has not been deducted by the assessee and the AO has not disallowed the same, the assessment order is erroneous and prejudicial to the interest of the revenue. Therefore, the Pr CIT set aside the assessment order and directed the AO to modify the assessment order by disallowing a sum of Rs. 76,722/- u/s.40(a)(ia) of the Act. Hence, the assessee is in appeal before the Tribunal.

Shanti Prime Publication Pvt. Ltd.

Sec. 263 of Income Tax Act, 1961— Revision —Assessment order is erroneous and prejudicial to the interest of the revenue as it is vivid clear that AO has not made any enquiry on the issue of payment of interest by the assessee during the relevant financial period since tax has not been deducted by the assessee and the AO has not disallowed the same - CHANDI FILLING STATION V/s ITO - [2020] 28 ITCD Online 038 (ITAT-CUTTACK)