TaxTMI 
TaxTMI 
2011 (2) TMI 1430
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....o carting contractor. For this, Revenue has raised the following effective three grounds:- "1) The ld. Commissioner of Income-tax(A)-XV, Ahmedabad has erred in law and on facts in deleting the penalty of Rs. 2,04,334/- levied u/s.271(10(c) in respect disallowance of Rs. 5,58,404- made u/s.40(a)(ia) of the Act. 2) On the facts and in the circumstances of the case, the Ld. CIT(A)-XV, Ahmedabad ought to have upheld the order of the Assessing Officer. 3) It is therefore, prayed that the order of the Ld. Commissioner of Income-tax (A)-XV, Ahmedabad may be set-aside and that of the Assessing Officer be restored." 3. The brief facts leading to the above issue are that assessee-firm is engaged in construction activities and it has filed it's return income on 30-11-2005 declaring total income at Rs. 36,24,921/-. The Assessing Officer issued notice u/s.143(2) of the Act and during assessment proceedings he found that assessee had made TDS of Rs. 18,115/- from gross contract payment to carting contractor of Rs. 5,58,404/-. However, TDS amount was not deposited into govt. exchequer before expiry of time prescribed under sub-section 1 of Section 200 of the Act. According to him, the amount....
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....s." 4. The Assessing Officer considered reply but the same was found as irrelevant in the facts and circumstances of the case, according to him. In this case, as already discussed above, though the assessee had made He found that TDS of Rs. 18,115/- from sub-contract payment to carting contractor to the tune of Rs. 5,58,404/- was deducted but the amount of TDS was not deposited into the government account within the time prescribed under sub-section 1 of Section 200 of the Act and as per the clear cut provisions of Section 40(a)(ia) of the Act, the assessee himself should have disallowed and added back the said payment to carting contractor of Rs. 5,58,404/- to his total income of the year and then could have claimed the same expenses as deduction in subsequent year on payment basis. The Assessing Officer noted that this is inspite of the fact that the assessee was guided by a qualified Chartered Accountant and assessee has consciously deliberately and in defiance of provisions of the Act furnished inaccurate particulars of income and Assessing Officer levied the penalty of Rs. 2,04,334/- as against maximum penalty leviable on Rs. 6,13,002/-. Aggrieved, assessee preferred appeal b....
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....1987) 167 1TR 776 (AP) held that it is not possible to extend the fiction beyond the field legitimately intended by the statute. The Hon'ble court was dealing with the provisions of sec. 171(1) of the I.T .Act in the context of which it was held that joint family shall be deemed to continue for the limited purpose of assessing cases of joint families which have been hitherto assessed as such. It Is not possible to extend that fiction to other cases. Similar view was taken by the Hon'ble Kerala High Court in the case of CIT v. Kar Valves Ltd. (1987) 168 ITR 416 (Ker.) wherein it is held that legal fiction is limited to the purpose for which they are created and could not be extended beyond that legitimate frame, Hon'ble Kerala High Court was dealing with the case where assessee sought to take advantage of sec.41(2) by submitting that if liabilities are not liquidated and outstanding are not collected, then business could be deemed to continue. The Hon'ble Allahabad High Court in the case of Controller of estate Duty v. Krishna Kumar Devi (1988) 173 ITR 561 (All) held that in interpreting the legal fiction the court should ascertain the purpose for which it was creat....
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....amp duty then it was thought necessary to introduce section 50C for substituting apparent sale consideration by valuation done by Stamp Valuation Authorities. This fiction cannot be extended any further and, therefore, cannot be invoked by Assessing Officer to tax the difference in the hands of the purchaser. Hon'ble Madras High Court in CGT v, R. Damodaran (2001) 247 ITR 698 held that Stamp Valuation Authorities have their own method of evaluating the property. Merely because for the purpose of stamp duty, property is valued at higher cost, it cannot be said that assesses has made more payment than what is stated in the sale deed. The Hon'ble Allahabad High Court in Dinesh Kurnar Mittal v. ITO (1992)193 ITR 770 (All.) quashed the order of authorities below, wherein half of the difference between the amount paid and the value for purposes of stamp duty was added as income of the assessee by the Assessing Officer. It is held that there is no rule of law to the effect that the value determined for the purposes of stamp duty is the actual consideration passed between the parties to the sale. In the present case the Assessing Officer has applied this provision of Section 50C fo....