TaxTMI 
TaxTMI 
2016 (1) TMI 614
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.... business of construction and trading of Potatoes assessee filed his return of income for A.Y. 2008-09 on 28.01.2010 declaring total income of Rs. 1,41,57,150/- and agriculture income of Rs. 3,03,262/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 27.12.2010 and the total income was determined at Rs. 1,49,67,650/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 04.04.2012 granted partial relief to the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us and has raised the following ground:- 1. Ld. CIT (A) erred in law and on facts in confirming disallowance of Rs. 1, 96, 9....
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....1(1)(c) of the Act. 1st ground is with respect to addition made u/s. 40(a)(ia) of the Act. 4. During the course of assessment proceedings and on perusing the Profit and Loss account, A.O noticed that Assessee has claimed expenses of Rs. 1,96,945/- as preservation charges paid for Potato storage to a cold storage and that Assessee has not deducted TDS on the same. He was of the view that non deduction of TDS would result in attraction of provisions of Section 40(a)(ia) and he accordingly disallowed the amount of Rs. 1,96,945/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who upheld the order of A.O by holding as under:- 3.2. In the assessment order, AO observed that the impugned amount w....
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....nts were less than Rs. 20,000/- but the aggregate payment during the year was Rs. 1,96,945/- which was in excess of Rs. 50,000/- being the limit prescribed u/s. 194C(5) and therefore the Assessee was liable to deduct TDS and therefore A.O. has rightly disallowed the expense and therefore no interference to the order of A.O. was called for. 7. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to addition made u/s. 40(a)(ia) on account of non deduction of TDS. It is an undisputed fact that Assessee has paid preservation charges to the cold storage, the aggregate of the payments/credit to the account is of Rs. 1,96,945/-. During the relevant time, subsection (5) and proviso....
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.... of provisions of Section 2(22)(e) of the Act. The submissions of the Assessee was not found acceptable to the A.O. as he was of the view that the agreement that was entered between the Assessee and the company was to use the funds of the company as and when required by the Assessee. Therefore, provisions of Section 2(22)(e) were attracted and he therefore considered Rs. 1,30,502/- (to the extent of accumulated profit of the company) as deemed dividend u/s. 2(22(e) of the Act and added to the income. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who upheld the order of A.O by holding as under:- 5. Ground No.3 is as under. - "3.1. Rs. 2,31,01,000/- received from M/s. Vaibhav Corporation Pvt. ....
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....ompany; he received loan of Rs. 2,31,01,000/- from the said company; the accumulated reserves of the company were to the extent of Rs. 1,30,502/- and accordingly he added Rs. 1,30,502/- as deemed dividend u/s.2(22)(e). The written submission reproduced above are general, vague and do not controvert the findings of the AO. This ground of appeal is devoid of merit and is therefore dismissed. 6. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us. 7. Before us, ld. A.R. reiterated the submissions made before A.O and ld. CIT(A) and further submitted that Assessee is owner of land which it wanted to develop and for the purpose of development of land and construction it had engaged Vaibhav Corporation Pvt. Lt....
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....entered into an agreement with Vaibhav Corporation for development and construction on the land, the land being owned by the Assessee. The perusal of the agreement reveals that various conditions have been incorporated which also includes one of the condition being that the sale price of the land has been decided between both the parties, namely, assessee and Vaibhav Corporation and which the Assessee would receive on it being collected by Vaibhav Corporation from the members on the sale and the assessee shall give registered sale deed in the name of such member. The perusal of the aforesaid and other clauses of the agreement which has been entered by the assessee with Vaibhav Corporation supports the argument of the ld. A.R. that the trans....