TaxTMI 
TaxTMI 
2016 (6) TMI 38
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....aw and on facts in challenging the genuinity of purchases of Rs. 15,95,001/- made in the month of February merely on the ground that due to typographical error the date of end of month was wrongly mentioned as 31.02.2008 instead of 29.02.2008. 4. Because the Ld. CIT has erred in law and on facts in treating the purchases made on different dates from M/s Bajrang Int Udhyog- Rs. 47,31,100/- and M/s Rahimuddin & Sons- Rs. 53,60,594/- as ingenuine on the presumption that these parties are not registered with the Trade Tax Department and are also liable to get their accounts audited u/s 44AB of the Income Tax Act, 1961. Whereas, the assessee has complete bills and vouchers of the purchases made from them and the assessee should not be held responsible if these persons are presumed to be defaulters. 5. Because the Ld. CIT has erred in law and on facts in adding back the amount of purchases of Rs. 10,09,208/- made on 31.03.2008, as it is not being reflected in closing stock or work in progress. He has completely ignored the fact that as a consistently adopted accounting policy the assessee treats the stock delivered at site as consumed and neither includes the same in opening nor in c....
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....fore, as per provision of section 40a(ia) of the Act, and amount of Rs. 86,65,626/- is required to be added to the total income of the assessee firm. ii. From perusal of assessment records it is found that the assessee has claimed depreciation amounting to Rs. 13,82,300/- on the temporary structure of office, whereas no separate capital bills & vouchers were furnished in support of this claim of capital nature of expenditure. Therefore, by debiting the depreciation of Rs. 13,82,300/-, the assessee has claimed double deduction for the same amount. Hence, an amount of Rs. 13,82,300/- is required to be added to the total income of the firm. iii. From perusal of month-wise details of purchases made during the yearit is noticed that the assessee has claimed to have made purchases to the tune of Rs. 15,95,001/- from four parties namely (i) M/s Kumar Building Material, (ii) M/s Rahimuddin & Sons, (iii) Sh. Tula Ram Rajput and (iv) Sh. Bhanwar Lal Thekedar. The genuineness of above purchases are also to be verified as the purchases are claimed to have been made on 31.02.2008. iv. It is further noticed that the assessee firm has made purchases on different dates which exceeds Rs. 40 l....
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....ised before us the assessee has challenged the exercise of revisionary powers by the Ld. CIT u/s 263 on various issues. 7. Before us the Ld. AR stated that the order passed by the AO was not erroneous in so far as being pre judicial to the interest of the Revenue and challenged the validity of the order passed under section 263 by the Ld. CIT. 8. The first issue raised in the proceeding under section 263, is that, it was found that the assessee had made payment to contractor for supply of labour, and transportation to the tune of Rs. 86,65,626/- but no TDS had been deducted on the same. Therefore as per the Ld. CIT the amount ought to have been added to the total income of the assessee as per the provision of Section 40a(ia) of the Act. With regard to the same Ld. AR submitted that it was demonstrated before the Ld. CIT that no TDS was required to be deducted on the aforestated payments. Ld. AR drew out attention to the assesses letter dt. 26/03/2013 placed at PB No. 3 - 6 filed before the Ld. CIT wherein it was explained that the impugned amount related to payments made to temporary labour to whom payment was made on a daily basis and since it was not possible to record payment....
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....see as a consequence of which there was prejudice cause to the Revenue. The order passed under section 263 on this count was therefore valid. 10. We find that on this issue there is no error in the order of the AO causing prejudice to the Revenue. The assessee had duly demonstrated before the Ld. CIT, that it was not required to deduct TDS on the impugned payments. The assessee has stated before the Ld. CIT that no payment was made for supply of labour & transportation, in pursuance to any contract for the supply of the same. In fact, the assessee had explained, that the so called contractors used to only facilitate payments to various temporary unskilled labour employed by the assessee. The modus operandi was explained as being that entire payment relating to a group of labourers being made to one so-called contractor, who in turn distributed it to the individual labourers. The assessee had demonstrated the same through monthly wage sheets of various labours attached to the so called contractor which stated "तुलाराम राजपूत के साथ अमानी ल&....
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....n the construction of such temporary structures. The reply of the assessee is reproduced hereunder. "यह कि प्रार्थी का पी डब्ल्यू डी के अंर्तगत कार्य भाग्य नगर रोड पर, एरवा कटरा रोड पर गोपियापुर, इटैली, गढवाना, सोधेपुर में तथा गेल इण्डिया लि. के अंर्तगत गेल पाता में एव गेल गाँव परिसर में कार्य....
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....ed on the order of the Ld. CIT. 13. We find that this issue had been investigated during assessment proceedings and the AO after considering the assessee reply, had taken a plausible view and allowed the assessee 100% depreciation on the temporary structure. Moreover the case of the Ld. CIT we find is that in the absence of bills and vouchers pertaining to the impugned expenses, the assessee has claimed double deduction. We fail to understand how the assessee has claimed double deduction when the fact is that the impugned amount was debited to capital account and 100% depreciation claimed thereon. The assessment order we therefore hold cannot be held to be erroneous and the Ld. CIT has wrongly invoked revisionary powers under section 263 of the Act on this issue. 14. The third issue, pertains to purchases made from four parties namely (i) M/s Kumar Building Material, (ii) M/s Rahimuddin & Sons, (iii) Sh. Tula Ram Rajput and (iv) Sh. Bhanvar Lal Thekedar amounting in all Rs. 15,95,001/-which as per the Ld. CIT needed to be verified, since the same were made on 31/02/2008. Ld. AR submitted that with regard to the same copies of bills relating to the same had been submitted before ....
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....g to Rs. 15,95,001/- it was found from the copies of bills submitted by the assessee that there were various discrepancy in the same. Ld. DR pointed out the observations of the Ld. CIT in this regard reproduced at para 6 of its order: 6. Regarding purchase claimed to have been made from four parties on 31.02.2008 the assessee firm in its reply has stated "............Therefore, the entire purchase made in the month of February, 2008 cannot be held to be bogus just because of a typographical error." Assessee's contention is not correct. The entire purchase made during the month of February is not being doubt. Assessee has furnished copies of bills of M/s Kumar Building Material and M/s Rahimuddin & Sons. From perusal of these copies it is noticed that the bill No. 940 of Rs. 9163/- is dated 01.02.2008 to 29.02.2008 whereas in the list of month wise purchases furnished by the assessee before the AO bill No. 940 of Rs. 9163/- is mentioned in month of July 2007dated 31.03.2007. Similarly, bill No. 340 dated 31.07.2007 is listed in the month of February, 2008 dated 31.02.2008. Similarly bill No. nil dated 31.01.2008 of Rahimuddin & Sons is not mentioned interest the list in the month o....
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....aforesaid raw material. Ld. AR submitted that all raw material purchased was laid out on the construction site itself and consumed in the construction work on the same day therefore the assessee never showed any stock of raw material in its books of account. 18. Ld. DR on the other hand relied upon the order of the Ld. CIT and stated that this matter required verification since the assessee had not produced any evidence to prove that similar purchases made in the preceding year were not shown as opening stock in this year. Therefore Ld. DR pleaded that proceeding under section 263 on this count were valid. 19. We find that no addition on this account has been made in the assessment order passed in consequence to the order passed under section 263. Any adjudication on this issue is of no consequence and it remains only academic in nature. 20. The next issue relates to interest amounting to Rs. 36,287 not found to have been included in the income of the assessee. While the TDS certificate showed that the assessee had received interest of Rs. 81,507/- during the year from Vidhamal Idandas, Dibiyapur on which TDS of Rs. 8,395/- had been deducted, the assessee had shown only Rs. 45,3....