TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 875
X X X X Extracts X X X X
X X X X Extracts X X X X
....the business of providing information technology and related services, Medical transcription, E-Governance project, trading in shares and commodities and investments. The assessee company filed its return of income for the AY 2013-14 on 05/09/2013 declaring total income of Rs. 67,79,590/-. The case was selected for scrutiny under CASS and notices were issued u/s 143(2) and 142(1) of the Act. The assessment was completed on 04/01/2016 u/s 143(3) by determining total income at Rs. 1,20,52,407 by making various additions. 3. On appeal before the CIT(A), the CIT(A) confirmed some additions and deleted some additions in which he deleted the disallowance of Rs. 50,80,764/- u/s 40(a)(ia) of the Act, which is the subject matter of the present appe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shed the details of TDS Paid. From the details, Assessing Officer took out amount on which TDS made as Rs. 15,31,422/- towards contract payments and assumed the same to be towards payments made for SECC projects. The assessee submitted that during the year it had made an expenses of Rs. 66,12,186/- towards the amount paid for SECC project and the same was reflected under Business support charges in the profit and loss account. As the Individual payments were below the exemption limit for the purpose of TDS, hence TDS not made. Further, it was submitted that the assessee's accounts are Audited u/s. 44AB and the Auditors have also not qualified for non-compliance relating to TDS. 6. After considering the submissions of the assessee, the CIT(....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appreciated the legal position that the word 'payable' occurring in section 40(a)(ia) not only covers cases where amount is yet to be paid but also those cases where amount has actually been paid as on 31" March of the relevant previous year as observed by Apex Court in the case of M/s Palam Gas Services vs. CIT (394 ITR 300). (5)The appellant craves leave to add, delete, substitute and amend any ground of appeal before and/or at the time of hearing of the appeal. (6)For these and other grounds that may be urged before/at the time of hearing of the appeal, it is prayed that the addition of Rs. 50,80,764/- made by the Assessing Officer u/s 40(a)(ia) be restored." 8. Ld. DR submitted that ld. CIT(A) has accepted the additiona....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he revenue on this are allowed for statistical purposes. C.O No. 22/Hyd/17 by assessee 11. In the C.O. the assessee has raised the following objections: "1. The order of the learned Commissioner of Income-tax (Appeals) is erroneous both in facts and law to the extent it is prejudicial to the assessee. 2. The learned CIT(A) having given a finding of fact that the submissions on disallowance u/s.40(a)(ia) are to be accepted that the payments are less than taxable limit, erred in relying on the decision of the Special Bench in the case of Merilyn Shipping & Transport though there is no such requirement of relying on any decision as the provisions of Sec.40(a)(ia) itself are not attracted in the absence of liability to make TDS. 3. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed, the assessee preferred an appeal before the CIT(A) and submitted that company is dealing in the trading of shares/derivatives/commodities etc. It has got investment (trade investments) in the form of shares to the tune of Rs. 1,55,26,107/-. The profit/loss on the trading of the shares/derivatives/commodities is considered as income from business and company is not availing any exemption on profit/loss on sale of these of shares/derivatives/commodities. During the year, the company has earned dividend on shares amounting to Rs. 89,543/-. As the same is exempted under section 10(34), the company has claimed the exemption. Conservatively, though not required, company on its own, calculated the disallowance under section 14A read with rule ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l not form part of the total income, as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year; C = the average of total assets as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year; In particular, the notes for 'B' clearly states that the average value of investment, income from which does not or shall not form part of the total income. It is clear that we have to include those investments which has generated income and exclude those investments, which have not generated income. In the present case, AO had taken the total investment instead of those investments, which have generated income. Accordingly, we direct the AO to calculate th....