TaxTMI 
TaxTMI 
2016 (1) TMI 245
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....JVVNL (2009) (25 DTR 79) quoted by the assessee even when this decision was based on different facts and circumstances of a unrelated assessee.'' ITA No. 383/JP/2013 - Assessee ''1. The Ld. CIT (A) is wrong, unjust and has erred in law in holding that duty draw back amounting to Rs. 85,93,907/- received by assessee is not eligible for deduction u/s 10BA of I. T. Act, 1961. 2. That the Ld. CIT (A) is wrong and has erred in law in confirming the action of Ld. A.O. of invoking provisions of section 145 (3) of I. T. Act, 1961 and of rejection of books of accounts of assessee and further confirming the application of G.P. rate of 17.20% on declared turnover of Rs. 20,95,87,304/- as against declared G.P. rate of 12.03% thereby confirming trading addition of Rs. 1,08,46,091/-. 3. That the Ld. CIT (A) while deciding that as the following amounts were 'paid' during the financial year and not 'payable' and so provisions of section 40 (a) (ia) are not applicable in case of assessee but is wrong and has erred in law in holding: (a) that appellant was liable to deduct TDS on transport charges of Rs. 43,21,000/- despite that the assessee only reimburs....
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.... it therein and raises a bill there for which assessee reimbursed. The total charges paid are Rs. 1,23,24,384.26 which are debited in P & L A/c as C & F charges. The breakup of charges are as under:- (i) THC etc. charges 42,56,773.49 (ii) ICD/cfs Inland haulage charges 21,81,974.23 (iii) Transportation & Handling charges 43,21,000.00 (iv) fumigation charges 3,01,746.00 (v) GSP charges 74,400.00 (vi) Sachin Cargo Agency charges 2,66,500.00 Service Tax on (vi) above 62,718.00 (vii) other charges 7,89,270.24 (viii) Ocean freight 70,071.50 Rs. 1,23,24,384.26 Ld. AO picked up transport charges of Rs. 43,21,000/- and held that assessee has not deducted due TDS there from and disallowed the same u/s 40(a)(ia) of I.T. Act, 1961. In this connection it is submitted that assessee has not directly paid these transport charges but are reimbursed by him to Sachin Cargo Movers. M/s Sachin Cargo Movers who has paid the transport charges and deducted due TDS from transporters and deposited the same in accordance with provisions of I.T. Act, 1961. This is neither disputed....
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....eing for reimbursement of expenses cannot be disallowed u/s 40(a)(ia) of the Act. Thus Ground No. 3 of the assessee is allowed.'' 5.1 Apropos Ground No. 4 of the assessee, it is contended that the A.O. made disallowance of Rs. 15,372/- u/s 40 A(3) being 20% of Rs. 76,860/- being payment exceeding Rs. 20,000/- which is in accordance with amendment made in Section 40 A(3) by Finance Act, 2008 w.e.f. 1-4-89 (i.e. from A.Y. 2009-10). However, it is submitted that the amount disallowed u/s 40A(3) will correspondingly increase the profits and gains of eligible business and same is allowable to assessee while computing deduction u/s 10BA. The Ld. CIT (A) has wrongly rejected the contention of assessee without appreciating legal position. It is prayed that it may be held the profits of the eligible business deductible u/s 10BA. 6.1 Apropos Ground No. 5 of the assessee, the AO made the addition of Rs. 32,47,159/- which was challenged before the ld. CIT(A) in first appeal. On assessee's submission, a remand report was called for by the ld. CIT(A) which is as under:- ''(i) The opening stock was wrongly adopted while preparing the trading account as on date of survey. The co....
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....ce u/s 40 (a) (ia) was made there from and certain direct expenses on account of carriage inward, transportation charges inward, loading-unloading and packing forwarding, were not considered by A.O. in his remand report. The difference in sales, was on account of foreign currency rate difference which was corrected at the time of audit. The assessee thereafter on the basis of the remand report provided re casted trading account. The Ld. CIT (A) thereafter held that there was excess stock of Rs. 30,96,058/- as on date of survey which is to be treated as unexplained investment of assessee u/s 69 of the Act and thereby confirmed addition of Rs. 30,96,050/- in income of assessee as against addition of Rs. 32,47,159/- made by Ld. A.O. as profit @ 17.20% on alleged shortage of stock of Rs. 1,88,78,833/- as on date of survey. It is submitted that Ld. CIT (A) has erred in law in working stock on date of survey as per remand report sent by A.O., while the working of assessee was as per books of accounts produced before Ld. A.O. in course of assessment proceedings wherein declared sales and purchase were accepted. The closing stock will work out to Rs. 1,67,12,716/- if G.P. rate of 17.2% is ....