Assessee's Appeal Partially Allowed: ITAT Disallows Adhoc Income Addition, Partial TDS Disallowance

The appeal filed by the assessee was partly allowed. The Assessing Officer's adhoc addition to total income was dismissed as the appellant did not press the ground during the hearing. Regarding the disallowance of TDS deduction under sections 194C and 194J, the ITAT found that the revenue authority erred in disallowing the entire expenses when only a small percentage was short deducted. The ITAT allowed the appeal, agreeing with the appellant's contention that only a proportionate amount should have been disallowed, leading to a partial success for the appellant.

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Issues involved: Adhoc addition to total income, Disallowance of TDS deduction u/s 194C and 194J.

Adhoc addition to total income: The Assessing Officer made an adhoc addition of Rs. 4,11,800 to total income on account of difference between balances with C&FA agent. The appellant did not press this ground during the hearing, so it was dismissed.

Disallowance of TDS deduction u/s 194C and 194J: The Assessing Officer disallowed Rs. 28,24,415 to total income due to a shortfall in TDS deduction u/s 194C and 194J. The appellant argued that only 7% of TDS was short deducted and 93% had been paid. The revenue authority erred in disallowing the entire expenses. The ITAT found that the actual deduction was short by Rs. 1,617 u/s 194C and Rs. 6,761 u/s 194J, but the entire amount had been disallowed. Referring to a similar case, the ITAT held that the revenue authority was not reasonable in disallowing the entire expenditure. The appellant had agreed to the disallowance of proportionate expenses, which were Rs. 73,971 u/s 194C and Rs. 1,23,738 u/s 194J. Following the decision of a co-ordinate Bench, the ITAT allowed this ground of appeal and partly allowed the appeal.

Decision: The appeal filed by the assessee was partly allowed.

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