TaxTMI 
TaxTMI 
2016 (4) TMI 416
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....he facts on record. 2) The CIT is not justified in law in restoring the assessment order to the AO for re-examination which was already examined by the A.O. 3) The CIT should have noted that the A.O. has passed the assessment order after examining the accounts of the Appellant, bills, vouchers, details of Assets and Liabilities as on 31.03.2008, details of labour charges payable after 15.03.2008 upto 31.03.2008, which is evident from notices dtd 01/11/2010, 6/12/2010 and para 2 of the assessment order dtd 23/12/2010. The A.O. has taken a possible view after examining these statements and details and therefore she was not bound to explain why she was satisfied with the explanation of the Assessee. Ref CIT vs. J.L. Morrison (India) 270 CTR (Cal) 405. 4) The reasons adduced by the CIT in the order u/s. 263 was not itself sufficient to support the finding of the CIT that the order u/s. 143(3) was regarded as erroneous and prejudicial to the interest of the revenue. 5) The CIT should not have passed an order against the Appellant after examining the details and submissions submitted before him at the time of hearing of the case. None of the details produced or none of the as....
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....ng explanation for the discrepancies as mentioned above. The assessee claims that "During the financial year cited above, I have received an amount of Rs. 1,31,89,428 as contract receipts and I have paid an amount of Rs. 80,89,568 as labour charges. This work was undertaken and executed by me directly and have engaged labours directly by me. These labours are my regular workers engaged by me for the last several years. The payments are given directly to them as and when the contract payments are received by me. In certain cases, only after proper inspection by the Public Works Departments the full payments are settled. I pay the workers on account and the payments are settled as and when the bill is passed by the Public Works Department. 5. He also relies on the decision of the ITAT, Kochi in the case of Alleppey Parcel Service Company (I.T.A. 325/Coch/2010 dated 20.7.2012). 6. I have considered the submissions of the assessee and the material available on record. It is clear from the record that the AO has not made necessary enquiries in this regard, and as such the claim of the assessee now needs to be verified. 7. In view of the foregoing reasons, I order revision of as....
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....and the assessee has submitted the same and no defect in the same has been pointed out. He further invited our attention to the order of the ITO, Ward-1(3), Trivandrum where at para 2, the Assessing officer writes that books of account and other documents called for were produced and examined and in the absence of not producing certain bills and vouchers for expenses, a lumpsum addition of Rs. 2,90,000/- was made. The Ld. Counsel argued that the Assessing officer has verified all the payments made to the labours and no defect in the same has been pointed out. The Assessing officer has examined all the labour payments made directly to the labours for which the ledger sheet has been placed on record which clearly shows that even the monthly payment does not exceed to any of the labour more than Rs. 13,583/- and the labours have even been paid upto Rs. 5430 per month. None of the payments exceed the limit as laid down u/s. 194C of the Act which is evident from the vouchers produced before the Assessing officer for which enquiries and verification have been made by the Assessing officer and accordingly, in the Assessing officer's view, no discrepancy has been found on the said paym....
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....r of the Assessing officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent, if the order of the ITO is erroneous but it is not prejudicial to the interests of the Revenue or if it is not erroneous but is prejudicial to the interests of the Revenue, recourse cannot be had to section 263(1) of the Act. In view of the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 0083, though there could be two views possible and if the ITO has taken one view which the Commissioner does not agree, it cannot be treated as erroneous order prejudicial to the interests of the revenue unless the view taken by the ITO is unsustainable in law. In the present case, the Assessing officer having conducted adequate enquiries and having made verification of the labour charges paid, has not invoked the provisions of section 194C of the Act. The Assessing officer has taken one possible view swhich cannot be said to be unsustainable in law. 15. Before the Ld. CIT comes to a conclusion, there should be some material available from record called for by the ld. Commissioner. In the pr....
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....ief facts of the case are that the Assessing Officer has invoked the provisions of section 40(a)(ia) of the Act and disallowed a sum of Rs. 80,89,568/- on the presumption that the assessee had paid the said amount to the sub-contractors for the electrical work carried out, against which tax was not deducted. According to the Assessing Officer, payment made to the sub-contractors who carried out the work assigned by the assessee would attract the provisions of section 194C of the Act and thereby the assessee had obligation to deduct tax when the payment was made to them. Since no such tax was deducted, the Assessing Officer has invoked the provisions of section 40(a)(ia) and disallowed the said amount. 18. The arguments of the assessee and the findings of the Ld. CIT(A) are reproduced hereinbelow: "Contradicting the Assessing Officer, the appellant has argued that section 194C attracts only to a person responsible for paying any sum to any contractor for carrying out any work in pursuance of a contract between the contractor and a specified person and in his case there is no such contractor or subcontractor are involved as the payment was made only to labours directly worked u....
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....g of cables, etc. carried out to the said office. Further, he debited in the Profit & Loss account an amount of Rs. 80,89,568/- paid towards labour charges against which the Assessing Officer has invoked the provisions of Sec. 40(a)(ia) treating the same as paid to subcontractors without deducting tax at source. Not agreeing with the Assessing Officer, the appellant during the course of hearing before the undersigned has contended that the work was undertaken and executed by him directly and therefore the labour charges debited in the Profit & Loss account is nothing but the amount paid by him to the individual workers and not to anyone including subcontractors as allegedly claimed by the Assessing Officer. Further, he contended that he is not obligated to deduct tax u/s. 194C as the payment was not made to any contractor or subcontractor. It emerges from the above, to whom the payment has actually been made, whether to subcontractors as claimed by the Assessing Officer or to the individuals who worked directly under the appellant. 5.3 The Assessing Officer has invoked the provisions of section 40(a)(ia) of the Act on the conclusion drawn that the payment was made to the subcont....