TaxTMI 
TaxTMI 
2017 (3) TMI 576
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.... other source. Subsequently, the case was selected for scrutiny and notice u/s. 143(2)/142(1) of the Act was issued upon assessee. Assessment was framed u/s. 143(3) of the Act at a total income of Rs.26,31,610/- after making certain additions / disallowances to the total income of the assessee. 3. First issue raised by assessee in ground No.1 to 4 are that Ld. CIT(A) erred in confirming the order of Assessing Officer by sustaining the addition of Rs.4,27,330/- on account of non-deduction of TDS. 4. The assessee in the year under consideration has made the payments to counsels and advocates as detailed below:- Sl.No Name Amount (Rs) 1 A. Chatterjee 1,30,000 2 P.K.Das 34,000 3 Raja Basu Choudhury 2,29,330 4 Pratap Chattrjee 34,000 The AO observed that in each case payment is exceeding the limit of Rs. 20,000/- and assessee was under obligation to deduct the TDS on aforesaid payments under section 194J of the Act. It was also observed that the accounts of the assessee were also subject to audit u/s 44AB of the Act in the immediate preceding Assessment Year. On question by AO for the non-deduction of tax, the assessee subm....
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....as Advocates payments u/s. 40(a)(ia) of the Income Tax Act, 1961, (in short 'Act') under the facts and circumstances. (2) For that the payments made by the Appellant Assessee engaged in legal profession as solicitor and advocates were reimbursements by appellant assessee's clients and disallowance u/s. 40(a)(ia) of the Act in respect of reimbursement expenses were devoid of any substantial basis. (3) For that the accounting entries made in the books of account are not decisive of nature of payment which is a settled principle of law and the same has been ignored by Ld. CIT(Appeals). (4). For that the disallowances u/s 40(a)(ia) were deleted by Hon'ble ITAT Kolkata Bench in the case of Sharma Kajaria & Co. Vs. deputy Commissioner of Income Tax, Circle-54-Lol. (2012)50 SOT 282 (Kol) and Ld. CIT(Appeals)had erred in not following the same although the said case was brought to his notice in appeal proceedings." 6. Before us Ld. AR for the assessee filed paper book which is running pages from 1 to 40 and reiterated same submissions as made before Ld. CIT(A). He also drew our attention on pages 5 to 9 where the copies of sample bills were placed. In those sample bills, th....
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....o the Explanation to section 194-I; (vi) "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;] A plain reading of the above statutory provision makes it clear that this provision seeks to restrict the deductions which are otherwise permissible under section 30 to 38 of the Act. In other words a disallowance can be made only in respect of an amount which is sought to be deducted by virtue of the provisions of these sections. In the instant case before us the contention of the assessee is that the payment made to the lawyers is nothing but the reimbursement of expenses therefore there cannot be any occasion to invoke the provisions of section 40(a)(ia) of the Act. However the learned CIT-A observed that the payment to the Counsels has been debited in the profit and loss account. The argument of the learned AR is that the treatment given to a transaction in the books of accounts or profit and loss account is not decisive of the true nature of the transaction. On perusal of the pages 1 to 4 of paper book where the bills raised to the parties are placed, we find that the assessee has claimed the payment for senior counsel ....
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....d investment is without any base, however, Ld. CIT(A) confirmed the action of AO by observing as under:- "4.3 I have considered the facts of the case and the appellant's submissions. The appellant's explanation regarding the payment of Rs. 9,50,00/- made by him to M/s Geeta Ganesh Promoters Ltd. on 31.12.2009 is that although it was not reflected in the books of account, the payment had been made out of a disclosed bank account. However, the appellant has not explained as to how the books of account balanced under the double-entry method of book-keeping in the absence of entry regarding the payment of Rs. 9,50,000/-. This shows that books are unreliable and the discrepancy of Rs. 9,50,000/- which would arise if the payment of Rs. 9,50,000/- is taken into account in the books of account remains unexplained . In the light of the gaps in the explanation of the A./R, the addition of Rs. 9,50,000/- is confirmed." Being aggrieved by this order of Ld. CIT(A) assessee came in second appeal before us. 11. Before us Ld. AR for the assessee has reiterated same submissions as made before Ld. CIT(A) whereas Ld. DR for the Revenue vehemently relied on the order of Authorities Below. ....