2017 (4) TMI 1333 - HC - Income Tax

High Court upholds Income Tax Tribunal decision on appeal, dismissing claims for assessment year 2009-10.

The High Court dismissed the appeal under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal for the assessment ... Disallowance u/s 40(a)(ia) - non deduction of tds on professional fee to Shri Radhey Shyam Sharma on account of supervision of works of the factory building - Held that:- The order of CIT(A) as confirmed by Tribunal deserves to be upheld as the assessee has failed to deduct TDS on the payment made to Shri Radhey Shyam Sharma as the provisions relating to TDS are mandatory. Accordingly, we dismiss ground of the assessee’s appeal Issues:1. Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal.2. Whether the benefit of closing cash in hand can be set off in the relevant assessment year.3. Discharge of onus under Section 68 of the Income Tax Act for proving the source of cash deposits.4. Disallowance under Section 40(a) (ia) of the Act for failure to deduct TDS on professional fee payment.Analysis:1. The appellant filed an appeal under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal for the assessment year 2009-10. The Assessing Officer made an addition of Rs. 26,77,000 under Section 68 of the Act due to unsatisfactory explanation of the source of cash deposit. The CIT(A) partly allowed the appeal, deleting Rs. 14.42 lacs out of the total addition. The Tribunal dismissed both appeals and upheld the CIT(A)'s order, leading to the present appeal before the High Court.2. The CIT(A) found that the cash deposits in the bank account were explained as sourced from cash withdrawals from the same account. The Tribunal upheld this finding, noting no evidence that the withdrawals were invested elsewhere and no substantial gap between deposits and withdrawals. The appellant's claim of cash deposits from available cash, withdrawals, and sale proceeds of land belonging to another individual lacked evidence, leading to dismissal of the miscellaneous application.3. Regarding the disallowance under Section 40(a) (ia) for failure to deduct TDS on professional fee payment, the CIT(A) and the Tribunal upheld the Assessing Officer's decision. The appellant's failure to deduct TDS on the payment justified the disallowance, as TDS provisions are mandatory. The Tribunal's findings were based on facts and not shown to be illegal or perverse, leading to the dismissal of the appeal on merits.4. The Tribunal's decision was based on factual findings, and no substantial question of law arose from the case. The dismissal of the appeal on merits left the question of condonation of delay in filing the appeal open. The detailed analysis of the facts and legal provisions led to the dismissal of the appeal before the High Court.