TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 401
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....firming disallowance of expenses u/s.40(a)(ia) of Rs. 18,29,036/- on the ground that the appellant either failed to deduct TDS or deducted and paid short TDS on these expenses. 5. The Ld.CIT(A) erred on facts and in law in confirming addition u/s.68 for Rs. 3,94,000/-. Your appellant craves leave to add, alter and/or amend all or any of grounds before the final hearing of appeal. 2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 01/03/201, thereby the Assessing Officer (AO in short) made various additions on account of disallowances of expenditure. The AO made disallowance of depreciation of Rs. 1,51,059/-, disallowance on account of late payment of employees' contribution to PF & ESI into Government Account of Rs. 4,73,003/-, disallowance by invoking the provisions of section 40(a)(ia) of the Act on account of late deposit of tax to the Government account of Rs. 18,53,850/-, disallowance by invoking the provisions of section 40(a)(ia) on account of non-deduction of TDS of Rs. 18,29,036/- and addition on ac....
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.... ground that TDS was not paid before the due date specified in the section. The Revenue has not controverted the fact that the assessee has deposited the tax before the due date of filing of the return, therefore we direct the AO to delete the disallowance. Thus, this ground of assessee's appeal is allowed. 7. Ground No.4 is against confirming the disallowance of expenses by invoking the provisions of section 40(a)(ia) of the Act of Rs. 18,29,036/- for short deduction or non-deduction of TDS. The ld.counsel for the assessee submitted that no order u/s.201 has been passed against the assessee and, therefore, assessee cannot made subject to disallowance u/s.40(a)(ia) in view of second proviso inserted by Finance Act, 2012 w.e.f. 1.4.2013 but this amendment has been held to be curative and has retrospective effect from the date when section 40(a)(ia) was inserted by Finance (No.2) Act, 2004 by the judgement of Hon'ble High Court of Delhi in the case of CIT vs. Ansal Land Mark Township (P) Ltd. in ITA 160/2015 & ITA 161/2015 dated 26/08/2015. 7.1. On the contrary, ld.Sr.DR supported the orders of the authorities below. 8. We have heard the rival submissions, perused the material ava....
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....t". Therefore, his contention that he was not required to deduct tax on the total payments to M/s Mahavir Cranes cannot be accepted. In the result, the assessee has failed to establish that he has deducted the tax correctly and fairly on the payments made to various payees as per para 11 of the assessment order and therefore, these payments are liable to be disallowed u/s 40(a)(ia) of the Act. However, in the case of M/S Om Sai Engineering, the amount on which tax was not deducted as per the Assessing Officer was Rs. 10,64,245/-, whereas the same figure as conceded and offered by the assessee during assessment as well as appellate proceedings was Rs. 12,12,145/-. Since the amount on which tax has not been deducted by the assessee out of the payments made to M/s Om Sai Engineering, is offered by the assessee himself, the Assessing Officer is directed to calculate the disallowance u/s 40(a)(ia) adopting the figure of Rs. 12,12,145/- instead of Rs. 10,64,145/- as far as disallowance of payments to M/s Om Sai Engineering is concerned. The assessee fails on this ground of appeal." 8.1. The ld.counsel for the assessee has placed reliance on the judgement of Hon'ble High Court of Delhi ....
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....e hands of the recipient. The scheme of Section 40(a)(ia), as we see it, is aimed at ensuring that an expenditure should not be allowed; as deduction in the hands of an assessee in a situation in which income embedded in such expenditure has remained untaxed due to tax withholding lapses by the assessee. It is not, in our considered view, a penalty for tax withholding lapse but it is a sort of compensatory deduction restriction for an income going untaxed due to tax withholding lapse. The penalty for tax withholding lapse per se is separately provided for in Section 271 C, and, section 40(a)(ia) does not add to the same. The provisions of Section 40(a)(ia), as they existed prior to insertion of second proviso thereto, went much beyond the obvious intentions of the lawmakers and created undue hardships even in cases in(which the assessee's tax withholding lapses did not result in any loss to the exchequer. Now that the legislature has been compassionate enough to cure these shortcomings of provision, and thus obviate the unintended hardships, such an amendment in law, in view of the well settled legal position to the effect that a curative amendment to avoid unintended consequen....
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.... to explain deposit so receipt only an amount of Rs. 1,52,000/- received on 17/11/2009 was to be explained. Balance amount was representing receipt of amount against advances made earlier or amounts squared up on the same date. The amount of total credit stands at Rs. 3,44,000/- against addition of Rs. 3,94,000/- in the assessment order. He also submitted that no show-cause was issued to the assessee by the AO for making the addition in this respect. 9.1. On the contrary, ld.Sr.DR supported the orders of the authorities below and submitted that the assessee was required to furnish the details in support of his claim. The ld.CIT(A) confirmed this addition in paras- 9.3 to 9.6 of his order by observing as under:- "9.3 I have carefully considered the facts and circumstances of the case, the observations of the AO, the submissions of the assessee material available on record and the judicial pronouncements on the subject. It is clear from the records that the assessee has failed to establish the identity and creditworthiness of the claimed creditor viz Shri Mustafa Abbasbhai. He refused to comply with the summons u/s 131 issued by the Assessing Officer. There are cash deposits in th....
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....action of loan. 9.5 The assessee has claimed during the appellate proceedings that the credit may be treated as genuine since the transactions through cheque may be treated as genuine. However, in the absence of the proof of creditworthiness of the creditor, it cannot be accepted that the assessee has discharged the onus. In Nemi Chand Kothari vs CIT [2003] 264 ITR 254 (Gau), it was held that it cannot be said that a transaction which takes place through a cheque is always sacrosanct. 9.6 In view of the above discussion, it is clear that the assessee has failed to discharge" the burden of primary onus cast on him to establish either the identity or creditworthiness of the alleged creditor and has also failed to prove the genuineness of the transaction. Therefore, the credit of Rs. 3,84,000/- in assessee's bank account is held to be unexplained and the order of the Assessing Officer in this regard is upheld. The assessee fails on this ground of appeal." 9.2. The ld.counsel for the assessee drew our attention towards page No.82 to 87 of the paper-book in support of his contention that there were debit and credit entry into the ledger account of the depositor. We find that the....