TaxTMI 
TaxTMI 
2016 (10) TMI 495
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....sed by the assessee per its appeal are as under:- "1. "whether on the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) has erred in deleting the addition made on account of Rs. 2,35,500/- unexplained purchase from M/s Konked International as the same could not be verified." 2. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) has erred in deleting the addition made on account of outstanding liability in relation to M/s Bharat Somani as the same could not be verified." 3. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) has erred in deleting the addition made on account of non-deduction of TDS on transport charges u/s/s 40(a)(ia) of the Income-tax Act, 1961." 4. First issue raised by Revenue is that Ld. CIT(A) erred in deleting the addition made by Assessing Officer for Rs. 2,35,500/- from M/s Konked International (for short KI) which was not verified u/s. 133(6) of the Act. 5. Facts of the case are that assessee- an individual is engaged in the business of civil construction as a Govt. contractor and running its proprietorship business und....
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....the alleged payments being made in cash and the amount involved being Rs. 50,675 and Rs. 1,00,737 respectively during the relevant assessment year and at the same time, the appellant having failed to produce any of the parties except the bills alleged to be raised by those concerns, the Tribunal was justified in disbelieving those transactions and there is no reason to interfere with such finding which is basically a finding of fact based on appreciation of material evidence. However, as regards the payments made to SP are concerned amounting to Rs. 3,12,302, those have been made by account payee cheques and those have been encashed through the bankers of SP. It appears that according to the appellant, at the time of assessment, the appellant had no business transaction with SP and consequently, the said party did not co-operate with the AO. However, the transaction having taken place through account payee cheques, the contention of the advocate appearing for the Revenue that the transaction was a non-existent one cannot be accepted. If an assessee took care to purchase materials for his business by way of account payee cheques from a third party and subsequently, three years after....
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....Rs. 8,31,748 - Rs. 4,31,748/-] was shown as sundry creditor in the balance sheet as at 31/3/2006. Copies of relevant bills, R.C of Central and State and bank statement were filed before the AO in response to his letter dated 16.12.200, a copy of which is also filed during appellate proceedings. As in the case of Konked International, the AO alleged that the notice u/s. 133(6) of the Act could not be served by postal authorities and even by the Inspector deputed by the department, which promoted him to treat the transaction ingenuine, resulting in addition to the total income as unexplained credit. For the reasons discussed hereinabove while dealing with the addition of Rs. 2,35,500/- in respect of Konked International, I find no plausible ground to concur with such arbitrary action of the AO an addition made thereunder. That apart, the AR has pointed out that the AO made conflicting observation in respect of Bharat Somani, inasmuch as on one hand addition of Rs. 4,00,000/- was allegedly made as unexplained credit and on the other hand the transportation charge of Rs. 5,51,995-, which was shown by Bharta Somani in his supply bills were disallowed u/s. 40(a)(ia) of the Act. If total ....
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....the transport charges have been shown in the books of account of assessee separately. Had it been the cost of purchase then it should have been added in the cost of material. Accordingly, AO disallowed the same of Rs. 25,32,484/- and added to the total income of assessee. 14. Aggrieved, assessee preferred an appeal before Ld. CIT(A) who deleted the addition made by AO by observing as under:- "7.4. I have considered the submissions made on behalf of the appellant, gone through the various documents filed and the impugned assessment order. It is apparent from the table (supra) that except in the case of Suresh Gupta, in all other cases of three suppliers, the cost of transportation was higher than the cost of materials supplied by those parties. The AR tried to explain that the suppliers were charging the price of raw materials for their convenience under different headings seemingly for the reasons that the price of such raw materials were either of negligible value or of no value and the suppliers may add their expenses with the cost of goods and collected the price of raw materials in the garb of transportation cost and loading cost. Whatever it may be, it was submitte....
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....e issue, it is amply clear that as the suppliers were not the transport contractors and the AO could not bring on record evidence establishing existence of any oral or written agreement, provisions of section 194C of the Act do not come into play warranting any disallowance u/s 40(a)(ia) of the Act. That being so, the observation of the AO in respect of default in deducting tax at source on transport charges u/s 194C of the Act is misconceived and not sustainable in the eye of law. 7.5. Without prejudice to what has been stated above the case of the appellant impliedly falls under the category of 'contract for sale' and not contract for carrying out any work. Although there was no oral or written agreement between the appellant and the suppliers, but on the facts of the case it emerges that there was impliedly a contract for sale on the part of the supplier. The appellant used to purchase raw materials from the suppliers. Therefore, there was a relationship of purchaser and seller between them. The appellant purchased raw materials for the purpose of use of the same in his construction job and it was, therefore, a contract for sale and not a contract for any work. ....
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....T no. 96 of 2012, GA No. 1368 of 2012 where it was held as under:- "We have heard the learned Counsel Smt. Sinha [Das de], appearing for the appellant, and we have gone through the impugned judgment and order. We are of the view that this appeal does not require admission for hearing as the applicability of law involved herein is admittedly settled. It is admitted position that the matter relates to the assessment year 2006-07, whereas Section 194C(1) has been made applicable to the individual assessee with effect from 1.6.2007. There is no dispute that the respondent is an individual assessee. Considering the position of the law, the learned Tribunal has consistently held that Section 194C(1) cannot be made applicable for the assessment year 2006-07. On identical fact the learned Tribunal has held so in the case of Ajay Rawla vs. DCIT, Circle-28, Kolkata [ITA No.353/Kol/2010 dated 22.6.2011]. It has not been submitted that the aforesaid judgment has been upset by this Court. In fact, on narration of undisputed fact, we do not think that the learned Tribunal has decided wrongly in this case or in the previous year. Accordingly, this appeal is dis....
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....6/- has been made to 'P.Beriwal' and 'Sun Enterprises' respectively. The AO further deputed the Inspector to conduct the enquiry from the party M/s SE to confirm the transaction who confirmed the purchases for Rs. 1,65,346/- only. Accordingly the AO has held the difference of the purchases of Rs. 14,89,888/- as bogus and added to the total income of the assessee 20. Aggrieved, assessee preferred an appeal to ld. CIT(A) whereas assessee submitted that the payment of Rs. 3,61,716/- was made to the party (M/s SE) only but the bank has entered the short name in its statement as 'Sun Enterprises'. Similarly, the payment of Rs. 3,58,500/- was made 'P. Beriwala' as authorised by the party (M/s SE). The closing balances as appearing in the books of accounts in the name of SE for Rs. 7,69,672/- was cleared through account payee cheque in the subsequent year. The ld. CIT(A) accordingly deleted the addition made by the AO by observing as under:- "5.9 Fourthly, as is found from the impugned assessment order, the Inspector deputed by the AO restricted his query/inspection to the purchase transaction i.e. sale transactions of Sunidhi Enterprise without verifying the payments received....
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....d by the Revenue in this appeal is that the learned CIT(A) erred in deleting the addition made by the AO for Rs. 90,752/- on account of excess liability shown in the respect of ESS Refilling Station (for short ERS). 23. The AO during the assessment proceedings issued notice u/s 133(6) of the Act to ERS to confirm the transaction. In response to the notice of section 133(6) of the Act the AO found the excess balance of Rs. 90,750/- shown by the assessee. On question by the AO assessee failed to provide any supporting evidence to explain the difference. Accordingly the AO has treated the excess liability shown by the assessee as income and added to the total income of the assessee. 24. Aggrieved, assessee preferred an appeal to learned CIT(A). The assessee before the ld CIT(A) submitted that the party ERS in the response to the notice u/s 133(6) of the Act has furnished the details of the purchase transactions took place during the year but failed to incorporate the opening balance of Rs. 90,752/-. The difference of Rs. 90,752/- is arising only on account of the opening balance as shown by the assessee and the party in the response to the notice u/s 133(6) of the Act. The ld CI....
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....d the amount of the purchases corresponding to the excess balance shown by the assessee. In the instant case before us the AO has admitted all the purchases as genuine in relation to the excess balance shown by the assessee for Rs. 90752.00. The AO has not taken into account the opening balance as shown by the assessee. All the transactions took place during the year are matching with the confirmation of the party as received in response to the notice issued under section 133(6) of the Act. The learned DR has not brought anything on record contrary to the finding of ld. CIT(A). We also find that the confirmation received by the AO in response to notice under section 133(6) of the Act have not been confronted to the assessee. In view of above we find no reason to interfere in the order of learned CIT(A). Hence this ground of appeal of the Revenue is dismissed. 26. Next issued raised by the Revenue in this appeal is that ld CIT(A) erred in deleting the addition made by the AO for Rs. 17,30,671/- on account of short deduction of TDS under section 194-I viz a viz 40(a)(ia) of the Act. 27. The assessee for the year under consideration has incurred expenses for Rs. 21,63,339/- towa....