TaxTMI 
TaxTMI 
2015 (7) TMI 70
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....y order of ld CIT(A), both the assessee and department are in appeal before us. 4. First, we take up the appeal of the department. Grounds raised are as under: "1. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in deleting the addition of Rs. 28,60,000/- and Rs. 10,00,000/- made on account of discrepancy in the balance sheet regarding unsecured loans claimed. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in deleting the addition of Rs. 9,75,000/- made by the AO u/s.69C. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in deleting the addition of Rs. 1,55,000/- made by the AO u/s.40(a)(ia). 4. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in accepting the contentions of the assessee in violation of Rule 46A of the I.T. Rules, when the remand report of the AO was not comprehensive and the same was not binding upon the Ld. CIT(A)." 5. Brief facts apropos Ground Nos.1 & 2 are that in the course of assessment proceedings, the Assessing Officer observed that another file under scrutiny for assessment year 2008-09 was of M/s. Anand....
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....these loans were not shown under the head loans and advances or unsecured loans, the AO apparently made the addition in the assessment. However, with the remand report of the AO clearly substantiating the contentions of the assessee that these amounts have been shown in the balance sheet, I agree with the view of the AO given in the remand report that these additions are not sustainable. Similarly, the hire charges payable of Rs. 9,75,000/- is again clearly a part of the balance sheet and the addition was due to the fact that because of typographical omission of this amount in the balance sheet. However, this amount is part of the liabilities in schedule - 4 amounting to Rs. 1,01,31,350/- as verified by the AO during remand and, accordingly, the addition of Rs. 9,75,000/- is also not sustainable. Thus, the additions of Rs. 28,60,000/-, Rs. 10,00,000/- and Rs. 9,75,000/- are deleted and the ground No.5 is, thus, decided in favour of the appellant." 9. In view of the findings of the Assessing Officer in the remand report, inter alia, that ..on verification of the same, it was found that the total figure of Rs. 41,71,000/- shown under the head 'advance from customers' in the balance ....
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....For that disallowance of expenses of Rs. 1,75,000/- paid to Sri Subrat Sahoo U/s.40(a) (ia) of the Act is out and out illegal, since, the said payment made as advance to the said employee towards payment of expenses and the individual entry in the ledger is the conglomeration of several vouchers of below Rs. 20,000/-, thereby, the TDS provision is not attracted to this expenses. Hence this disallowance may kindly be allowed for the interest of justice. 3. For that, the disallowances of expenses of Rs. 78,100/- U/s. 40 (a) (ia) is arbitrary since the individual debit entry in the ledger is the conglomeration of several vouchers of below Rs. 20,000/- and as such the TDS provision is not attracted and liable to be allowed. 4. For that, the disallowance of expenses of Rs. 10,00,000/- payment made to subcontractor M/s. S.S. Builders, U/s. 40 (a) (ia) is illegal and non-application of mind, since the authorities below failed to appreciate the fact that, the total balance to the credit of S.S. Builders is Rs. 47,58,316/- which includes an opening balance of Rs. 10,00,000/- and under the provision of section 194C tax is required to be deducted at the time of credit of such sum to the a....
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....edly assessee did not deduct the tax as required under the provisions of section 194C. However, it is also not disputed that no amount was payable at the end of the year to sub-contractors. Under such circumstances, the majority view decision of Special Bench in the case Merilyn Shipping & Transports (supra), is squarely applicable to the facts of the case. However, the Special Bench decision was examined by various High Court and it was held by Hon'ble Allahabad High Court in the case of M/s Vector Shipping Services (P) Ltd. (supra), as under: "We do not find that the revenue can take any benefit from the observations made by the Special Bench of the Tribunal in the case of Merilyn Shipping and Transport Ltd. (136 ITD 23) (SB) quoted as above to the effect Section 40 (a) (ia) was introduced in the Act by the Finance Act, 2004 with effect from1.4.2005 with a view to augment the revenue through the mechanism of tax deduction at source. This provision was brought on statute to disallow the claim of even genuine and admissible expenses of the assessee under the head 'Income from Business and Profession' in case the assessee does not deduct TDS on such expenses. The default i....