2017 (8) TMI 1247

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....hat that the payments to the payee were already made and there was no outstanding balance to be paid to the benificiary, hence TDS is not applicable to the assessee. The Ld CIT(A) deleted the addition following the decision of Hon‟ble Special bench in the case of Merlyn Shipping Company and the Hon‟ble Allahabad High Court judgment in the case of Vector Shipping Services P (Ltd.). However, this issue is set at rest by the Hon‟ble Supreme Court judgment in the case of Palam Gas Service v. Commissioner of Income-tax, [2017] 81 taxmann.com 43 (SC) against the assessee. The Ld.AR has not pressed this ground during the appeal. Therefore, this ground of appeal is dismissed as not pressed. 4. Ground No.3 is related to the addition of Rs. 3,90,032/- related to the sales tax payment. In the profit and loss account, the assessee debited a sum of Rs. 12,63,637/- and furnished evidence for proof of payment of Rs. 8,73,605/-. Therefore AO made the addition of the remaining amount and the Ld. CIT(Appeals) has confirmed the addition made by the assessing officer. During the appeal hearing also the assessee did not produce any evidence to show that the balance amount of Rs. 3,90....

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....g officer the assessee went on appeal before the CIT. The Ld. CIT confirmed the addition made by the assessing officer. Aggrieved by the order of the CIT(Appeals), the assessee filed before this Tribunal. 6. Appearing for the assessee, the Ld.AR argued that the assessee is having two contract divisions one is civil contracts and the other one is ready mix concrete works. The assessee engaged the employees and paid salaries for both the divisions separately. The assessing officer allowed the payment of salaries in respect of civil contracts, but disallowed the entire salaries incurred for ready mix contract works. The Ld.AR argued that it is unjustified to disallow the entire salaries when the assessee has declared the turnover and filed the return of income. The total contracts declared by the assessee was Rs. 7,84,94,244/-. Therefore, assessee argued that without the payment of salaries, the assessee would not have carried out the contract works and declared the turnover of Rs. 7,84,94,244/-. 7. On the other hand, Ld. DR argued that the assessee has maintained the books of accounts and it is the obligation on the part of the assessee to prove the genuineness of the expenditure. ....

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.... assessment proceedings, assessing officer noticed that there was an outstanding amount to the extent of Rs. 21,40,000/- under the head creditors for expenses. Outstanding expenses were related to the expenses incurred for electrical, hardware, bonus for staff etc. The assessee did not produce the vouchers, confirmations in support of the outstanding creditors for expenses. Out of the total outstanding amount of Rs. 21,40,000/- a sum of Rs. 10,00,000/- was bonus payable which is allowable on actual payment basis u/s 43B of the Act. The assessee went on appeal before the CIT (A) and the CIT confirmed the addition. 11.1. We have heard both the parties and perused the material placed on record. The outstanding creditors expenses were related to the expenditure incurred during the year or the earlier years and debited to the P&L account but remained outstanding without making the payment. The assessee was following mercantile system of accounting and debited the expenditure on accrual basis, however, it is the duty of the assessee to prove that the outstanding expenses were not paid outside the books of accounts and the same are genuine. The assessee did not submit the details and con....

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....gain, the assessing officer made the disallowance of outstanding labour charges. Whether the expenditure disallowed under head labour charges debited to the P&L account and the outstanding labour charges (Balance Sheet item) are one and the same or different is not clarified in the assessment order. If the outstanding labour charges in the Balance Sheet and the labour charges debited to the P&L account, both are one and the same this amounts to double taxation of the same amount which is not permissible. In case, both are different, in the absence of non production of vouchers and non furnishing the details of outstanding liabilities the disallowance is justified. Therefore, we remit the matter back to the file of the assessing officer and direct the assessing officer to verify the outstanding expenses and the labour charges and decide the issue a fresh on merits. Accordingly this issue is remitted back to the file of the assessing officer and kept open to decide afresh. The appeal of the assessee on this ground is allowed for statistical purposes. 13. Ground No.8 is related to the disallowance made u/s 40(A)(3) of Income tax act. The assessing officer disallowed a sum of Rs. 20,9....