TaxTMI 
TaxTMI 
2012 (10) TMI 279
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....f Income-tax (Appeals) has erred in partly confirming the addition of Rs.1,01,21,411/- out of total addition of Rs.1,35,62,524/- made by AO on account of nonpayment of TDS within specified time as per section 40(a)(ia). 2. On the facts and in circumstances of the case as well as law on the subject, the learned commissioner of Income-tax (Appeals) has erred in confirming the action of Assessing Officer in making addition of Rs.7,12,065/- on account of unexplained expenses. 2. Apropos to Ground No.1, facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of the Act dated 31.12.2007 were that the assessee in individual capacity is a civil contractor, therefore constructing buildings under the name and style o....
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...., the AO was not convinced and held that since the entire payment was made after the end of the Financial Year in view of the provisions of section 40(ia) [sic.] r.w.s.194C on account of the said failure to pay the TDS before the prescribed time, henc43e disallowed the entire amount and made an addition of Rs.1,35,62,524/-. The matter was carried before the first appellate authority. 3. Before ld.CIT(A), it was informed that the amount had actually been deposited into the Government account before the due date of filing of the return and that the words used in section 40(ia) were "payable" and not "paid" therefore the said provisions did not apply on the facts of the case. However, CIT(A) was not convinced and held that the interpretatio....
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....the return; therefore, deserves to be allowed in the light of Shri Kanubhai Ramjibhai Makwana vs. ITO in ITA No.3983/Ahd/2008 (A.Y. 2005-06) dated 03/12/2010 and Dynamic Builders vs. ITO in ITA No.1625/Ahd/2008 (A.Y. 2005-06) dated 04/02/2011. Further, he has cited Special Bench Decision pronounced in the case of Merilyn Shipping & Transports, Visakhapatnam vs. Addl.CIT-Range-I, Visakhapatnam in ITA No.477/Viz./2008, A.Y. 2005-2006 [ITAT Visakhapatnam Special Bench]. On the other hand, from the side of the Revenue, ld.Sr.DR Mr.Raj Mehra has agitated that the nature of expenditure has first to be ascertained and if those are confirmed to be genuine and exclusively incurred for the purpose of the business, then only the provisions of section ....
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....l No.706 of 2010 in the case of CIT vs. J.K. Construction Co. has held as under:- "From the record, it emerges that for payment to contractor, the assessee had made deduction as required under law from time to time and in particular latest by 31.3.2005. This is clear from chart supplied by the assessee before CIT (Appeals) which would establish that deduction in case several contractors were made on 31.3.2005. All such amounts were deposited with the Government on or around 28.5.2005. In background of above undisputed facts, tribunal was of the opinion that by virtue of amended provisions of Section 40 (a)(ia) of the Income Tax Act, 1961, assessee has not breached the requirement of deduction and depositing of TDS. Section 40(a)(ia) o....
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....neness of the expenditure notices u/s.133(6) of the I.T.Act were issued on random basis. The AO has referred that in respect of following three parties, the compliance has not been made. "5. Addition on account of unverifiable expenses:- During the course of assessment proceedings, the assessee, vide his submission dated 27.08.2007, submitted expenses details exceeding Rs.50,000/-. Notices u/s.133(6) of the Act were sent on random basis to these parties. However, in the following cases, the notices were either returned unserved by the Postal Authorities or if served no reply was received from the concerned parties:- (i) Shah Trading Corpn. Rs.2,27,065 (ii) Mahendra Shah Rs.2,90,000 (iii) Sureshbhai (POP) Rs.1,95,000 ....
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....rding their identities or even their existence. In such a situation, I am of the view that the AO was fully justified in disallowing such expenses. The addition of the sum of Rs.7,12,065 is therefore, confirmed." 8. Having heard the submissions of both the sides, we have found that M/s.Shah Trading Corporation supplied the iron-goods to the assessee. The assessee has furnished the bills and amount has been paid through banking channel as it was corroborated by filing the bank statement. Next, with regard to Shri Mahendra Shah, it was informed that he happened to be a labour contractor. The payments have been made through account payee cheques and tax was also deducted at source. About the third party, Sureshbhai (POP) it was informed tha....