TaxTMI 
TaxTMI 
2014 (8) TMI 790
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....es at residence Rs. 3,04,873/- 2.1. Ld. CIT(A) while allowing the assessee's appeal, deleted the aforementioned disallowances. 2.2. Being aggrieved with the order of ld. CIT(A), the department is in appeal before us and has taken following grounds of appeal: "1. Whether the ld. CIT(A) was justified in ignoring the Income Tax Provision that TDS u/s 194C is liable even on a single payment above Rs. 20,000 as one of the single payment involved in this case was of Rs. 34,495/-. 2. Whether the ld. CIT(A) was correct in holding that norms overrule Income Tax Act Provision on the issue of non deduction of tax on payment of Rs. 1,37,794/- made by the assessee firm to Kokad Chambers of Commerce, Mumbai for office space. 3. Whether the ld. CIT(A) was correct in treating as expenditure of Rs. 6,26,400/- on account of replacement of asset i.e. supply, erection, testing and commissioning of 'main panel' AC supply, as revenue in nature. 4. Whether the ld. CIT(A) was correct in ignoring the clear narration on bills of expenditure and holding expenditure of Rs. 83,131, Rs. 73,967, Rs. 2600 ....
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.... deducted thereon. The assessee did not respond to two notices issued by the assessing officer. Therefore, the assessing officer concluded that payment had been made to Kakad Chamber of Commerce, Mumbai in violation of section 194C and therefore he disallowed Rs. 1,39,794/- observing as under: "The following payments have been made by the assessee as per ledger account under the head 'Repair & maintenance':- Sr. No. Payment made to Party Date of payment (Rs.) Expenses TDS 1 Kakad Chamber of Commerce, Mumbai 01-05-2007 30219 194C 2 Kakad Chamber of Commerce, Mumbai 01-08-2007 30219 194C 3 Kakad Chamber of Commerce, Mumbai 01-11-2007 39678 194C 4 194C -01-2008 39678 194C Total 1,39,794 4.1. Before ld. CIT(A) the assessee pointed out that no show cause notice was issued by assessing officer and no reasonable opportunity was given to prove that the expenses were in the nature of reimbursement of expenses. Ld. CIT(A) deleted the disallowance observing as under: "I have carefully considered the findings of the Assessing o....
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....ia). He pointed out that this was in the capital field as the said installation of AC supply electrical equipment provided enduring benefit to th4e assessee. He, therefore, allowed depreciation of Rs. 59,600/- @ 10% of electrical fittings and made a disallowance of Rs. 6,26,400/-. 5.1. Before ld. CIT(A) it was pointed out that an amount of Rs. 14,338/- had been deducted u/s 194C of the I.T. Act on the total payment of Rs. 6,96,000/- @ 2.06%. It was further pointed out that before assessing officer the assessee had placed on record form no. 16A to prove that the TDS was deducted against this expenditure. Therefore, assessing officer erred in disallowing the impugned amount u/s 40(a)(ia). It was further submitted that assessing officer contradicted his own stand by taking this expenditure both as revenue expenditure as well as capital expenditure at the same time because he had disallowed the expenditure u/s 40(a)(ia), treating the same as revenue expenditure and also allowed depreciation treating the same as capital expenditure. No show cause notice was, however, issued by assessing officer in course of hearing. The assessee pointed out that main panel for supply, erection, testi....
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.... disallowance was called for u/s 40(a)(ia). As far as the claim of expenditure is concerned, it is not disputed that the main panel was replaced after a gap of 15 years and the entire expenditure was incurred at the business premises which was evident from the copy of I.T. return filed by the assessee. Under these circumstances, we do not find any reason to interfere with the order of ld. CIT(A). Ground is dismissed. 6. Brief facts, apropos ground no. 4 are that assessing officer noted that two bills of M/s Level one of Rs. 60,681/- and Rs. 22,450/- related to electrical installation. He noted that the narration in the bill was as under: "Bill for electrical installation work at Mr. V. Shridharan's residence at B-6/13, Safdarjang Enclave, New Delhi." 6.1. The assessing officer pointed out that the office is at basement and rest above is residence portion. Therefore, he disallowed the sum of Rs. 83,131/- treating the same as personal expenditure. The assessing officer further noted that following bills related to the residential premises of family members: (i) Bill dated 24-3-2008 from M/s K.L. Sharma & Sons, C-4/130, SDA, New De....