TaxTMI 
TaxTMI 
2017 (8) TMI 441
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.... 1. That the appellate order passed by the learned CIT(A) is contrary to the facts of the case and against the provisions of law and has been passed with pre-conceived notions and is based on conjectures and surmises and is therefore liable to be quashed. 2. That the assessment order has been passed by Deputy Commissioner of Income-tax, Circle 3(1), New Delhi ('learned AO') under section 144 read with section 143(3) of the Act in absolute haste and arbitrary manner without giving an opportunity to the Appellant to justify the false and unjust allegations made in the assessment order which is bad in law and learned CIT(A) has erred in holding such order as valid. 3. That the learned CIT(A) has erred on facts and in law by rejecting the contention of the Appellant that it acts as agent of its clients and disregarding the net basis method of accounting followed by the Appellant which is in accordance with the Accounting Standard ('AS') 9 "Revenue Recognition" as recommended by ICAI and now also prescribed by Central Government as part of Companies (Accounting Standards) Rules, 2006. 4. That the learned CIT(A) has erred on facts and in law ....
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....above grounds, in view of the facts and circumstances of the case and in view of the insertion of second proviso to section 40(a)(ia) of the Act, no such disallowance made by learned CIT(A) under section 40(a)(ia) of the is uncalled for. 14. Without prejudice to the above grounds, the benefit of second proviso to section 40(a)(ia) of the Act should be allowed in the year in which TDS is deemed to be deducted and paid. 15. Without prejudice to the above, learned CIT(A) has erroneously computed additional income as Rs. 1,54,98,15,194 instead of Rs. 90,08,18,069. 16. That the learned CIT(A) has erred on facts and in law in upholding the addition made by the learned AO of Rs. 3,01,15,968 on account of decrease in the net profit ratio based on presumptions, assumptions conjecture and surmises and without giving adequate opportunity to Appellant to support its claim. 17. That the learned CIT(A) has erred on facts and in law in directing learned AO to initiate penalty proceedings under section 201 (1) of the Act 18. That the learned CIT(N has grossly erred on facts and in law by completely ignoring the provisions of law, submissions made by the....
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....Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 6. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. GROUND NO.1 7. Ground No.1 is being general in nature needs no specific adjudication, hence decided accordingly. GROUND NO.2 8. Ground No.2 is not pressed by the ld. AR for the assessee company, hence same is determined against the assessee company. 9. The contention of the ld. DR that assessee is a sub-contractor and not agent is not tenable as this issue has already been determined by the coordinate Bench of Tribunal in assessee's own case qua AY 2005-06 and 2010-11. GROUNDS NO.3, 4, 5, 6, 7, 8 & 18 10. First challenge made by assessee that AO erred in treating the difference between revenue disclosed by the assessee in P&L account and the amount of the receipts shown in Form No.26AS as deemed income. Undisputedly, assessee company disclosed its revenue in P&L account at Rs. 31,70,10,89/- whereas as per Form No.26AS, the total recei....
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....n for the unconfirmed party is bogus. Ld. CIT (A) computed the total disallowance u/s 68 out of pass through cost at Rs. 89,46,18,890/- (Rs.65,52,478/- + Rs. 23,93,44,462/-), detailed as under :- Particulars Amount (in Rs.) Pass through cost 152,15,74,483 (less) confirmed transaction 38,76,11,081 Balance 113,39,63,402 (Less) Unconfirmed transaction 65,52,74,478 Balance 47,86,88,924 15. No doubt, AO issued notice u/s 133 (6) of the Act to 22 vendors of the assessee on random basis to confirm the transaction entered into between the assessee and the vendors out of which 10 vendors have responded and again out of 10 vendors, 8 vendors have confirmed the transaction with the assessee. However, in case of 2 vendors, amount confirmed did not match with the amount claimed by the assessee. 16. On the basis of confirmations received by the AO, forwarded to ld. CIT (A), the CIT (A) has tabulated the confirmation/nonconfirmation as under :- A.Y.2011-12 Sl. No. Name of the Vendors Payment made as per appellant Confirmation received Confirmation not received Remarks 1. TLG India Ltd. ....
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....e India Pvt. Ltd. 24213802 - Confirmation not received The unconfirmed amount of Rs. 24213802 is disallowed 21. Y Design 24135046 Confirmation received - Confirmation received 22. Superwell Services 21843133 - Confirmation not received The unconfirmed amount of Rs. 21843133 is disallowed Total Amount 1146643611 387611081 655274478 17. The CIT (A) proceeded to conclude that out of payments made in case of 22 parties, unconfirmed payments/transactions amounting to Rs. 65,52,74,478/- is treated as unexplained and disallowed as unexplained income u/s 68 of the Act and considered the expenditure/pass through cost shown from unconfirmed parties as bogus. 18. Again, the issue in controversy has already been dealt with by the ITAT, Delhi Bench 'B', New Delhi in ITA No.6184/Del/2014 for AY 2010-11 dated 17.08.2016 in assessee's own case vide which the matter was restored to the file of the AO for deciding this issue afresh after seeking details from the assessee and vendors. For facility of reference, operative part of the order passed in assessee's own case for AY 2010-11 is reproduced as under :- ....
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.... the assessee is carrying on the business of advertisement for Samsung Groups of company in print and electronic media by way of outsourcing from the vendors, When the vendor raises the bill on the assessee for the payment of the amount, then assessee raises bill for the amount payable to the vendors plus its remuneration on its clients. Perusal of P&L account, available at page 74 of the paper book 1 of 2, shows that the assessee has not declared its receipt from its clients on income side and payment to the vendors on the expenditure side which otherwise does not amount to under-statement of income. This issue requires to be determined on the basis of factual and legal position applicable in this case and by following the order dated 17.08.2016 (supra) passed by the coordinate Bench for AY 2010- 11, applicable to the identical facts of this case, the impugned order is set aside and the matter is restored to the AO for deciding this issue afresh after providing an opportunity of being heard to the assessee. In case, the payment is actually made by the assessee to the vendors in terms of the Agreement then no addition can be made otherwise addition on account of alleged payment can....
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....ents are made for work undertaken by the vendors. 24. Vide notice dated24.07.2014, ld. CIT (A) called upon the assessee to file details of payment having been made to third party vendors, details of tax deducted on all invoices received from such vendors and reasons for not deducting the taxes on such payments. Assessee filed detail, available at pages 303 to 335 of Volume 2 of paper book, and then called upon the assessee to show cause as to why payment made to such parties without deducting TDS should not be allowed u/s 40(a(ia) of the Act. Ld. AR for the assessee contended that first of all, CIT (A) has no power to enhance the assessment by discovering new source of income which were not considered by the ITO in the order appealed against. However, this contention of the assessee has already been rejected by coordinate Bench of the Tribunal in ITA No.6184/Del/2014 for AY 2010-11 (supra) in assessee's own case by relying upon the judgment rendered by Hon'ble Delhi High Court in Gurinder Mohan Singh Nindrajog vs. CIT - 248 ITR 170 (Del.) and concluded that the CIT (A) was empowered to enhance an assessment qua the net assessed sum u/s 251(1)(a) of the Act. 25. However, when ....