TaxTMI 
TaxTMI 
2018 (1) TMI 972
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....ccompanied by an affidavit filed by Rakesh Sharma, main partner of the assessee firm, the appeal was due to the filed latest by 17.12.2016. It was filed on 15.02.2017, thereby incurring a delay of 58 days. The order dated 13.10.2016 passed by the ld. CIT(A), was served on the assessee on 18.10.2016. On 13.10.2016, there was a religious function at the residence of the main partner of the assessee firm i.e., Rakesh Sharma. The relatives of Sh. Rakesh Sharma had come to Gwalior for attending the religious function, when their jewellery and other valuable articles were stolen, due to which, Sh. Rakesh Sharma, the main partner of the assessee firm and his mother suffered a bout of high blood pressure and the mother of Sh. Rakesh Sharma got bed-....
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....h it was held that only net profit on receipts is taxable. The AO, however, did not accept the assessee's contention and held that it was only the assessee who was responsible to complete the project awarded to him. It was also observed that the concerned departments had also deducted TDS on the payment made to the assessee, which was shown in 26AS. Accordingly, addition of Rs. 3,06,701/- was made. 5. The ld. CIT(A) confirmed the addition by holding as follows: "Ground No.2: With regard the Ground No.2 of the appeal relating to the addition of Rs. 3,06,701/-, I find that the appellant had furnished a copy of ledger account, which shows that an amount of Rs. 3,06,701/- from the two government department was passed on to the subco....
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.... sub contractor), the AO has not considered that prior to treating the assessee in default or disallowing of the expenditure under Section 40(a)(ia) of the Income Tax Act, the AO has to first satisfy himself as per provisions of Section 191 that the person to whom the payment is made (deductee) has not paid tax on such income. If the AO is satisfied that the person to whom the amount is paid has not paid the tax on the amount received to him, then the assessee (deductor) is treating himself in default for non deduction of tax on such payment. Kind attention is further invited towards the provisions of Section 40(a)(ia) of the Income Tax Act. As per Second proviso to Section 40(a)(ia) wherein it is mentioned that where the assessee fails to ....
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....me Tax Officer, 52 ITR Tribunal 168, decision of Hon'ble ITAT Hyderabad 'B' Bench in the case of Diwakar Logistic vs. Assistant Commissioner of Income Tax, 52 ITR Tribunal 150 Hyderabad, and decision of Hon'ble ITAT Pune Bench 'A' in the case of Shri Radhey Shyam Bherulal Bhandari vs. Addl. Commissioner of Income Tax, Satara, ITA No. 954/PN/2011. In these decisions, the Hon'ble ITAT has held that as per IInd Proviso to Section 40(a)(ia) of the Income Tax, if the deductee has proved in respect of the amount received to him, as shown in their income, then the assessee deductor shall not be treated in default for deducting of the tax against the payment made to them. As per provisions of Section 191 read wi....
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....xecute the same. The ld. CIT(A), however, confirmed the addition by invoking the provisions of section 40(a)(ia) of the IT Act, holding that the assessee had not made TDS u/s 194C of the IT Act, though the assessee had made payment to the sub-contractor. 9. The AO does not dispute the assessee having passed on the amount to the sub-contractor. So, it stands admitted/undisputed by the AO that the assessee did not receive the amount and the addition made by the AO was unsustainable. 10. Then, section 40(a)(ia) of the IT Act provides for non-deduction of a sum payable, on which, no TDS has been made or, where made, it has not been paid. In the present case, the factum of payment of TDS by the concerned Departments on the payment made, ha....