TaxTMI 
TaxTMI 
2015 (3) TMI 1118
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....n grounds of appeal the assessee has also raised additional ground agitating the validity of reopening of the assessment. However, during the course of hearing Ld. AR did not press any grounds except Ground No. 4(b) and the fact that he did not press other grounds is mentioned on the ground of appeal itself on the date of hearing. Ground No.4 in both the appeals read as under: "Ground No.4: in ITA No.2293/Mum/2013: 4.0 The Ld. CIT(A) before confirming the disallowance u/s. 40(a)(ia) r.w.s. 194C of labour charges of Rs. 1,35,05,623/- ought to have appreciated the understated vital facts, being; a) There is no oral or written contract executed by the appellant with the labourers. b) The provision of Sec. 40(a)(ia) shall apply only....
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....s. (65,83,283) Balance Labour charges Payable on which TDS is not Deducted Rs. 69,22,340 A.Y. 2006-07: Particulars Amount (Rs.) Labour charges on which TDS is not deducted (disallowed in assessment) Rs. 97,93,037 Less: Labour charges Paid Rs. (96,65,685) Balance Labour charges Payable on which TDS is not Deducted Rs. 1,27,353 It was mentioned by Ld. AR that to the extent labour charges are paid during the year the issue may be taken as covered in favour of the assessee by the following decisions: (1) CIT vs. Vector Shipping Services (P) Ltd., ITA- 122/2013 (SC) And 262 CTR 545 (HC-All) (2) Merilyin Shipping & Transports vs. Addl. CIT, 136 ITD 23 (ITAT -Visakhapatnam)(SB) Copie....
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....produced below: 4. Though number of grounds were urged before us in the grounds of appeal annexed to Form No. 36, at the time of hearing the learned counsel for the assessee submitted that the assessee having made the payment, section 40(a)(ia) cannot be attracted because it speaks of the amount "payable" and it does not cover the amount already paid. In this regard he relied upon the following decisions of the ITAT Chennai Benches wherein the Bench had taken into consideration the decision of the ITAT Special Bench in the case of Merilyn Shipping & Transport, the order of which was suspended by the High Court but at the same time there was a subsequent judgement of the Hon'ble Allahabad High Court in the case of M/s. Vector Shipp....
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....that section 40(a)(ia) is not attracted in respect of payment already made by the end of the previous year. The AO is directed to verify the claim of the assessee and if it is in line with the view taken herein the same may be considered accordingly. As regards levy of interest under section 234B and 234C of the Act, the same is consequential in nature and need not to be considered independently. 7. In the result, the appeal filed by the assessee is treated as allowed for statistical purposes 5.1 Moreover, Hon'ble Allahabad High Court in the case of CIT vs. Vector Shipping Services (P) Ltd.(supra) has held that for disallowing expenses from business and profession on the ground that TDS has not been deducted, amount should be payable and....