TaxTMI 
TaxTMI 
2016 (6) TMI 331
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....gnored the fact that assessee is a small taxpayer. He is a civil contractor and 70% of the total contract was executed by way of sub-contract i.e. Piece Work. Thus, confirming such substantial amount in year under appeal and allowing in subsequent year will have adverse consequences and financial stress. 3. This results in shifting of the year in which expenditure can be claimed. Principle of matching i.e. matching of receipts with expenditure to the extent indicated in section 40(a)(ia) will be affected. This principle will not affect the Income Tax Department or large tax payers having necessary cushion to absorb the effect. However, for small taxpayer like the appellant, effect of order u/s 40(a)(ia) is substantial and will cause real hardship which is apparent from the case of Commissioner of Income Tax Vs. Naresh Kuma, Delhi High Court and CIT Vs. Talbros (P) Ltd. 4. Thus, by adding income of Rs. 1,52,95,475/- the total income sums up to Rs. 1,77,88,140/- which is 80% of turnover which is practically impossible in such business. Assessee's income has decreased in the subsequent years and deduction of Rs. 1,52,95,475/- will not be absorbed even in next 6-7 ass....
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....assessment year 2005-06, dated 09.09.2011. The Assessing Officer noted that the amendment has been made to section 201 of the Act and also to section 40(a)(ia) of the Act by the Finance Act, 2012, which clearly states that the said amendment would come into effect from first day of April, 2013. In view thereof, the Assessing Officer was of the view that the said amendment would come into effect from 01.04.2013 and for the year under consideration, the assessee was in default and hence, sum of Rs. 1,52,95,475/- was added to the income of the assessee. 5. The CIT(A) upheld the order of Assessing Officer by rejecting the plea of assessee with regard to the amount being paid during the year under consideration and nothing being payable at the end of year. In respect of second claim of the assessee of applicability of proviso to section 40(a)(ia) of the Act, he held that from the combined reading of section 40(a)(ia) of the Act and proviso to the said section clearly lays down that the deduction of expenditure was to be disallowed in the year in which it was incurred, but the same is to be allowed in the year in which the payee of the expenditure has filed return of income. In view t....
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....ch resident has included the receipts as part of his income and paid taxes thereon and also furnished the return of income under section 139(1) of the Act, then the assessee could not be held in default for non-deduction of tax at source. The assessee had made the sub-contract payments to one Mr. Anil Patil. The learned Authorized Representative for the assessee before us has furnished the Paper Book, in which he has filed the copy of computation of income filed by the said concern along with tax audit report. The perusal of details furnished at pages 7.1 to 7.22 of the Paper Book reflects that the said concern has shown sub-contract receipts to the extent of Rs. 3.66 crores, which as per the assessee includes the sub-contract payments made by it to the said concern at Rs. 1.52 crores. He has further filed the copy of computation of income for the year under consideration, wherein the income from business has been included in the hands of the said person and tax payable by the said person is adjusted against the tax deducted at source out of other payments received by the said concern. 9. The issue arising in the present appeal is whether the proviso added under Finance Act, 201....
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....ntony D. Mundackal (supra) in a similar circum stance. The Ld. Representative submitted that the matter be restored back to the file of the Assessing Officer in the light of the order of the Tribunal dated 06,01.2014 (supra). The aforesaid plea of the respondent-assessee has not been seriously opposed by the Ld. Departmental Representative appearing for the Revenue. 5. Following the aforesaid precedent, we therefore deem it fit and proper to restore the matter back to the file of the Assessing Officer who shall consider the plea of the assessee based on the second proviso to section 40(a)(ia) of the Act inserted by the Finance Act w.e.f. 01.04.2013 in the light of the directions of the Tribunal contained in its order dated 06.01.2014 (supra). Needless to say, the Assessing Officer shall allow the assessee a reasonable opportunity of being heard before passing an order afresh on this aspect as per law." 11. The issue raised in the present appeals is squarely covered by the order of Tribunal (supra) and following the same parity of reasoning, we deem it fit to restore the matter back to the file of Assessing Officer, who shall consider the plea of the assessee based....