TaxTMI 
TaxTMI 
2013 (11) TMI 838
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.... by us as "Sundry Balance written off account", by treating it as merely advances and not routed thorough Profit & Loss A/c, though such advances are business loss since not recovered after due exercise. 3. The learned CIT(Appeals) has erred in retaining addition of Rs. 10, 44, 010/- on account of non deduction of T. D. S. on payment to contractor which is covered under section 194C(1), though, section 194C(1) of Income tax Act was not applicable to Individual / HUF cases till Assessment Year 2006-07. 4. The Appellant permission of your Honour to delete, amend, add or alter any ground of this appeal. Brief facts of the case: Assessee, an individual filed his return of income on 30. 10. 2006 declaring total income of Rs. 10, 62, ....
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....itted that assessee had incurred revenue expenditure, that payment made by the assessee was allowable u/s 37(1) of the Act. He referred the judgment of Hon'ble Bombay High Court delivered in the case of Otis Elevator (195 ITR 682). Departmental Representative(DR)submitted that assessee was an individual, that no evidence was produced that expenditure was wholly and exclusively for the purpose of business, that AO and FAA had restricted the disallowance to 50%. 2. 3. We have heard the rival submission and perused the material before us. We find that in the matter of Otis elevator issue before the Hon'ble court was disallowance made u/s. 40(a)(v). Hon'ble Court had observed as under: The Income-tax Officer disallowed under section 40(a)....
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....ference: Held, that the Appellate Assistant Commissioner had categorically found that the payment of the club fees was with a view to enable the assessee to improve its business relations and prospects. The factual findings arrived at by the Appellate Assistant Commissioner had not been disturbed by the Tribunal. Therefore, the payment of club fees was business expenditure not falling under section 40(a)(v). Similarly, the house rent allowance being a cash amount paid was not a perquisite. " Thus, the facts of the case decided by the Hon'ble Bombay High Court are not applicable to the facts of the matter under consideration. The issue before us not the revenue/capital nature of the expenditure. We are aware that in certain cases issue....
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....ce of Rs. 4. 87 lacs in this regard. 3. 1. Assessee preferred an appeal before the First Appellate Authority(FAA). After considering the order of the AO and submissions of the assessee, he held that burden of proving that expenditure was wholly and exclusively incurred for the purposes of business was on the assessee, that it was for the tax payer to establish by producing evidences that particular allowance was justified, that assessee had not produced evidences why such advances were made or written off. As a result, disallowance made by the AO was upheld by the FAA. 3. 2. Before us, AR submitted that advances were given to the supplier and job workers for purchases as well as labour charges, that they had neither supplied goods nor....
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....ssessee vide its letter dated 19. 12. 2008 submitted to the AO that individuals and HUFs were not liable to deduct tax as per section 194C(1)of the Act. But, AO was of the opinion that said section provided that any person responsible for paying any sum to any resident for carrying out any work in pursuance of a contractor had to deduct tax for payment made by it. He made a disallowance of Rs. 10. 44 lacs. 4. 1. Assessee preferred an appeal before the FAA. After considering the submission of the assessee FAA held that provisions not requiring individuals to HUF not to deduct tax at source were applicable to a certain category of tax payers, that if the turnover exceeded Rs. 40 lacs assessee had to deduct tax at source, that assessee was ....
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....fession exceeded the monetary limits specified in the section 44AB of the Act. We are aware that subsection K of the section 194C of the Act, referred to by the AR, was applicable from AY. 2009-10 only. But, that does not mean that proviso was also applicable from that year. As per the provisions of the Act individuals and HUFs, who were subject to mandatory audit, had to deduct tax at sources from AY. 2003 -04. While introducing the amendment to section w. e. f. , 01. 06. 2002, if legislature in its wisdom did not include the individuals and HUFs, who had not to get their accounts audited u/s. 44AB of the Act, to deduct tax source than it was a case of reasonable classification. But, legal position was very clear that during the year under....