TaxTMI 
TaxTMI 
2017 (12) TMI 908
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....ition and the concession given by the ld. AR, we condone the delay and admit the appeal for hearing on merits. 3. The first ground of appeal of revenue is against the deletion of addition of Rs. 6,66,78,916/- u/s. 40(a)(ia) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") 4. Brief facts of the case are that the AO during the scrutiny proceedings found that M/s. Basu & Co. Road Contractors Pvt. Ltd. (in short M/s. BCRCPL) had executed entire contract work of the assessee and the assessee had made payment to the said company without deducting TDS as mandated by sec. 194C of the Act. The AO confronted the assessee on this issue wherein the assessee replied to the AO that the assessee's proprietary business was taken ove....
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....gal, Public Works Department's order No. 1A dated 01.01.2002 included at Sl. No.9 in terms of the list of enlistment published under rule 215 of the PWD Code and was executing contract work for the Govt. of West Bengal. Later, a Private Limited Company was formed by the assessee under the Companies Act, 1956 in the name and style of M/s. BCRCPL which was incorporated on 04.07.2002 by the Registrar of Companies which is noted from page 2 of the paper book. As per the Memorandum of Association, the main object of the company was to take over/acquire the existing proprietorship concern M/s. Basu & Co. having its office at 5/1, Gatbala Lane, Kolkata-700 060 as a going concern with all its assets, properties, credentials, goodwill, liabilities, ....
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....clearly shows that the Private Limited Company i.e. M/s. BCRCPL existed from 04.07.2002 and it was existing for the main purpose of taking over the assessee's proprietary concern M/s. Basu & Co. and vide the Governor's approval the Govt. of West Bengal has permitted the assessee's business to be run through the Private Limited Co. w.e.f. 31.03.2008. In such a scenario, the AO's conclusion that this was a cooked up story to get rid of the clutches of disallowance u/s. 40(a)(ia) of the Act cannot be accepted and the AO erred in making such a conclusion and the Ld. CIT(A) has rightly appreciated the facts and has found that the entire contract work has been executed by M/s. BCRCPL and w.e.f. 31.03.2008, the proprietary concern has been taken o....
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.... for AY 2009-10 which is under consideration, which is reproduced as follows: Share Capital (in the Audited Balance Sheet of M/s. Basu & Co. Road Contractors Pvt. Ltd.) (Annexure-B) Previous Year ending Current Year ending On 31.03.2008 (AY 2008-09) On 31.03.2009 (AY 2009-10) 31,88,800 Share Capital 2,29,58,800 1,97,70,000 Share Application Money -- 2,29,58,800 2,29,58,800 The Ld. AR drawing our attention to the above share capital holding as on 31.03.2008 relevant for AY 2008-09 has stated that the transfer of the proprietary concern along with its assets and liabilities w.e.f. 31.03.2008 and the net value was converted into share capital by the company in the na....
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.... which was 86% of equity shares of the Private Limited Company. The shares were allotted by the Private Limited Company to the assessee after valuation of the assets and liabilities taken over by the Private Limited Company which was valued at their book value and the shares were allotted to the assessee in his individual capacity as a proprietor of the erstwhile proprietary concern. Since no shares were issued in the name of the proprietary concern M/s. Basu & Co. which did not exist after the takeover by Private Limited Company, no investment in shares were reflected in the Balance sheet of the proprietary concern M/s. Basu & Co. We take note that the takeover account was settled through mere book entry by debiting or crediting the amount....