TaxTMI 
TaxTMI 
2015 (10) TMI 1000
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....mstances of the case and in law, the Commissioner of Income Tax (Appeals) erred in not considering the ground of appeal in respect of invoking of Provisions under section 40(a)(ia) though the said provisions are ultra-virus and unconstitutional bad-in-law and harsh. The provisions being ultra-virus, bad in law and hence the same cannot be invoked on the facts and circumstances of the case of the appellant. (2) Without prejudice to above, and on the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) erred in confirming addition of an amount of Rs. 2,68,02,688/-, though the appellant was not required to deduct TDS on these payments. The appellant had directly transferred the said contracts to other con....
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....eturn and hence no disallowance of the following expenses is warranted vts: 40(a)(ia) of the Act: a) Sub-contract expenses amounting to Rs. 2,68,02,688/- b) Interest expenses amounting to Rs. 31,500/- 2. The Ld. Commissioner of Income-tax (Appeals) has erred in law and in facts not appreciating that the disallowance of various expenses u/s.40(a)(ia) of the Act can only be made in respect of the amount outstanding payable to the parties at the end of the year. 3. The Ld. Commissioner of Income-tax (Appeals) ought to have appreciated that no disallowance u/s. 40(a)(ia) of the Act is warranted in the present case in terms of the 2nd proviso to s. 40(a)(ia) of the Act." Assessee-firm,engaged in the business of Hot Mix Plant,road ....
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....rores on account of sub contract charges. He further disallowed Rs. 3.72 lacs and 31,500 on account of professional fees paid and interest paid. 3.Aggrieved by the order of the AO the assessee preferred an appeal before the First Appellate authority (FAA).Before him, it was argued that the assessee was facing financial hardship and that the funds were not available, that the bank accounts had become non-operative, that due to the difficulties it was compelled to pass on the contract work to other contractors/sub contractors on commission basis,that on passing of the contracts it was receiving a nominal amount by way of commission,that entire contract was passed on to the person executing the contracts, that it was not required to carry o....
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....ts were made before due date of filing of return of income. That the assessee was merely entitled to commission on the said contracts, that the assessee was facing severe financial difficulties, the assessee relied upon the decision of Virgin Creations (ITA 302 of 2011 dt.23.11. 2011 of Hon'ble Cal. HC), Naresh Kumar & Ors (362 ITR 256), Unity S&V Joint Venture (ITA/ 1456/Mum/2013 AY 09-10 dt.24/3/15), Piyush C. Mehta (52 SOT 271). With regard to TDS on professonal fee Rs. 4.00 lacs,the AR stated that nothing was payable on the last date of relevant accounting year, that the case was covered by decision of Merlyn Shipping and Transport [136 ITD 23 (SB)]. The Departmental Representative (DR) supported the order of the FAA. 5.We have heard....