TaxTMI 
TaxTMI 
2014 (3) TMI 504
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....t arise. (4) The CIT(A) erred on the mechanism of JVs adopted by the assessee, just to evade taxes. (5) The CIT(A) should have disallowed the expenditure of Rs. 1,52,09,336 by invoking the provisions of sec. 14A of the IT Act. 3. The assessee raised the following grounds in its CO: 1. The order of the learned Commissioner of Income-tax [Appeals] in so far as it is against the Respondent 1 Cross Objector are opposed to law, weight of evidence, natural justice, facts and circumstances of the case. 2. The Respondent 1 Cross Objector denies itself liable to be "assessed over and above the total income reported by the Respondent 1 Cross Objector of Rs. 5,96,42,217 under the facts and circumstances of the case. 3. The learned Commissioner of Income-tax (Appeals) is not justified in law in confirming the disallowance of Rs. 49,70,460 made by the assessing officer under the provisions of section 40(a)(ia) of the Act, being the payment made by the appellant to Shri. CH. Venkat Reddy and Chalapati & Co., under the facts and circumstance of the case. 4. The learned authorities failed to appreciate the fact that the provisions of section 40[a][ia] of the Act is not applicable to the fac....
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....tion stating as follows: 1. An Order of assessment was passed under section 143[3] r.w.s. 263 of the Income-Tax Act, 1961 for the Assessment Year 2007-08 was passed by the Assistant Commissioner of Income-Tax, Circle - 16[3], Hyderabad on 23.11.2012. 2. Aggrieved by the order of assessment passed under section 143[3] r.w.s. 263 of the Act, for the Assessment Year 2007-08 an appeal was filed before the learned Commissioner of Income-Tax [Appeals] - V, Hyderabad, by the Respondent Cross Objector for the Assessment year 2007-08, was heard and the appeal filed came to be partly allowed. The Order of the First Appellate Authority was passed on 15.4.2013, and the same was received by the Respondent/Cross Objector. 3. The order of the First Appellate authority was received and collected by the authorized representative of the Respondent/ Cross Objector. Subsequently, the revenue being aggrieved by the order of the learned CIT [A] filed an appeal before this Hon'ble Income-Tax Appellate Tribunal, Bangalore Bench, Bangalore. The notice of appeal filed before this Hon'ble Tribunal by the revenue challenging the order of the learned CIT [A] dated 18.07.2013 was received by the Resp....
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.... injury would be caused to the Appellant if this application of Condonation of delay is allowed. Reliance is placed on the decision of the Hon'ble Apex Court in the case of Collector, Land Acquisition Vs. MST Katiji and Others (1987) 167 ITR 471 and also in the case of Concord of India Insurance Co. Ltd., Vs Smt. Nirmala Devi and Others 118 ITR 507. The assessee also filed an affidavit confirming the reasons advanced by the assessee are true and correct. 5. We have carefully gone through the reasons advanced by the assessee for filing the CO belatedly is that the assessee's counsel who represents the case before the CIT(A) did not guide the assessee properly and only after when the assessee engaged the present counsel, he has advised him to file the CO. We find there is no evidence or supporting document to suggest that the earlier counsel has wrongly advised the assessee. There is no confirmation from the earlier counsel what he has advised the assessee. It is observed that nothing has been brought on record by the assessee with regard to the fact that which counsel has advised the assessee as stated in the affidavit and there is no affidavit or letter from the concerned ....
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....ce of Rs. 49,70,460 does not require adjudication as this disallowance is consequent to the order u/s. 263 of the Act wherein the assessee admitted that no TDS was made. Accordingly, there is no adjudication by the CIT(A) and matter has reached finality. 8. Regarding disallowance of Rs. 1,29,980 u/s. 40(a)(ia) it was observed by the AO that no TDS on this amount was paid to Babu Tata Hitachi. However, it was observed by the CIT(A) that this issue was already subject matter of appeal before the Tribunal in questioning the 263 order by the assessee and the Tribunal has deleted the disallowance. Being so, this issue is decided in favour of the assessee by the CIT(A). Against this, the Revenue is in appeal before us. We do not find any merit in the plea of the Revenue as this issue was already decided in favour of the assessee while deciding the order passed u/s. 263 by the Tribunal. 9. Coming to the next ground relating to disallowance of Rs. 1,52,09,336 u/s. 40(a)(ia) of the Act. The facts relating to this addition are that as per TDS certificate enclosed, the assessee is in receipt of gross amount of Rs. 18,49,40,581 vide 6 bills - 3rd bill to 8th bill from Executive Engineer, PJP....
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....also mentioned, which is follows: That insofar as Package No. 108 is concerned PLR shall undertake a portion of the work which is of a tendered value of Rs. 37.70,00,000/- of the Tatikunta Reservoir (Total Project). Which shall be referred to as Part-A of Package No. 108 and KC shall undertake a portion of the work it is of the tender value of Rs. 17,59,46,240/- of Nagardoddi Reservoir total Project which shall be referred as part-B the Package No. l08" 12. The CIT(A) observed that as per the TDS certificate which was issued in the name of JV and not in the name of assessee alone, the payments were made towards Package No. 108 work bills, he observed that there is no reason to disagree with the submissions of the assessee. When the payments were made towards Package No. 108 work bills and the constituents of the JV have a clear understanding of the total works to be carried out between themselves, including Package No. 108, there is no point to disagree to the claim that some payments were directly paid to M/s. Kranthi Constructions by the assessee based on MOU. The other evidences filed by the assessee like bank statements of M/s. Kranthi Construction and confirmation from them a....
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....dmitted fact that the amount has been taxed in the hands of Kranthi Constructions only. There may be so many reasons for accounting this contract receipt in the hands of the assessee and it was pleaded before us that because of mistake in 26AS issued by the contractor, the entry was made in the books of account of the assessee. However, it is an admitted fact that the amount was offered for taxation in the hands of Kranthi Constructions and it cannot be brought to tax in the hands of the assessee. Being so there is no question of deduction of TDS by the assessee on the payment received by the Kranthi Constructions. Further there is insertion of second proviso to section 40(a)(ia) by Finance Act, 2012 w.e.f. 1.4.2013 wherein stated that disallowance u/s. 40(a)(ia) of the Act need not be made if the assessee is not deemed to be an assessee in default under the first proviso to section 201(1) of the Act. It was held by various judicial authorities that its retrospective in nature since it has been introduced to eliminate unintended consequences which may cause undue hardship to the tax payer. For this purpose we refer to the order of the Tribunal Cochin Bench in the case of Antony D. ....
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....at it may not be correct to argue that the contract existed between the customers and the polishing people. In fact, the customer may not have any contact with the polishing people in this type of transactions. Hence, it is hard to believe the claim of the assessee that he has acted as mere conduit pipe between the customers and polishing people. Accordingly, the claim that the assessee stands in a fiduciary capacity is also liable to be rejected. In this kind of factual situation, in our view, the existence or absence of profit element in the polishing works does not make any difference. 7.2 The Ld Counsel, by placing reliance on the decision of special bench in the case of Meryline Shipping and transports (supra) contended that the provisions of sec. 40(a)(ia) shall apply only to amount payable and not to the amount paid. However, the Hon'ble Gujarat High Court in the case of CIT Vs. Sikandar Khan N Tunvar (357 ITR 312) and the Hon'ble Calcutta High Court in the case of CIT Vs. Crescent Export Syndicate (ITAT 20 of 2013) have held that the decision rendered by the Special Bench in the case of Meryline Shipping & Transports is not a good law. The Ld A.R, however, placed r....