TaxTMI 
TaxTMI 
2018 (1) TMI 1041
X X X X Extracts X X X X
X X X X Extracts X X X X
.... maintenance, sanitary and plumbing material, cartage inwards, freight cartage and transport expenses (Rs. 1,39,77,399/-) u/s. 40a(ia) by relying upon the documents produced during the appellate proceedings as additional evidence even though the AO has raised concerns about their genuineness. 3. That the appellant craves for the permission to add, delete or amend grounds of appeal or at the time of hearing of appeal. 3. The brief facts of the case are that the assessee filed its e-Return on 25.9.2008 declaring income of Rs. 1,51,300/- which was processed u/s. 143(1) of the Income Tax Act, 1961 (hereinafter referred as the Act) on 16.10.2009 at the returned income. The case of the assessee was selected for scrutiny through CASS. Accordingly, statutory notice u/s. 143(2) of the Act was issued on 4.8.2009 by the AO. Again notices u/s. 143(2) of the Act was issued on 11.9.2009 and 22.9.2009 and service of notice was also effected through affixture on 18.9.2009 by the AO. The case of the assessee was received on transfer. Accordingly, notice u/s. 142(1) of the Act alongwith questionnaire was issued by the AO on 15.6.2010 fixing the case for 24.6.2010. Again notice u/s. 143(2) of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing the appellate proceedings has filed the additional evidences vide his letter dated 17.1.2011 stating therein as under:- "I (Assessee) was not given proper opportunity of being heard as my counsel requested for an adjournment on 13.12.2010 but the AO without considering the request passed the assessment order on 14.12.1010 through reasonable time was still available. I (Assessee) was prevented by sufficient cause from producing the evidence before the AO and these evidences are relevant to the grounds of appeal. I myself was not able to argue my case independently without the help of my counsel." 6.1 We further note that Ld. CIT(A) sent the additional evidence to the AO for examination both with regard to its admissibility as well as the merits of addition made and in the light of additional evidence, the AO submitted the following report :- ''As far as circumstances of the case are concerned, I am of the opinion that the assessee was never refused to admit the evidences produced by him nor there certain genuine circumstances which prevented him to produce the evidence which he was called upon as no such communication has been received in this office. Therefore,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... this case, summons were issued to creditors of assessee from whom he had taken loan. These summons came back unserved and loan amount was treated as undisclosed income. Before AAC assessee sought to produce documentary evidence which was refused to be entertained. It was held that AAC should have admitted evidence in exercise of power u/s 250(5). 6.5 Keeping in view of the above said precedent, the Ld. CIT(A) has rightly held that the additional evidence filed by the assessee during the appellate proceedings should be admitted, hence, we uphold the action of the Ld. CIT(A) on the issue. As regards the merits of the case, we find that AO made the addition of Rs. 1,71,85,574/- on account of non-deduction of TDS on payments made by the assessee. The AO on perusal of the Trading and Profit and Loss Account noticed that the assessee had made payments of Rs. 1,71,85,574/- without deducting tax at source. In the absence of any details provided by the assessee which could have enable the AO to ascertain the nature of these expenses and to examine the liability of the assessee to TDS in respect of these expenses, the AO held that the assessee by not deducting tax at source violated provis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....isallowed were in respect of workers/employees engaged in a project in a Kathua district of J&K. The appellant by producing the wages/salary register could substantiate the fact that there was no employee/worker whose income was above the income limit in respect of which TDS provisions are applicable. The A.O's observations that the evidence in the form of wages register have been fabricated does not have any basis and is thus rejected. Accordingly I hold that since TDS- provisions were not applicable in respect of wages/ salary amounting to Rs. 65,45,311/ -, no addition was called for by invoking the provisions of Section 40(a)(ia) of the Income Tax Act. Accordingly the appellant gets a relief of Rs. 65,45,311/- b) Sit Preparation Expenses:- As in the case of wages/Salary, non- submissions of details by the appellant led to the addition of Rs. 36,61,340/- by the A.O u/s 40(a)(ia) of the Income Tax Act. As per the additional evidence submitted, this expenditure was incurred in the project undertaken at Kathua District of J&K to improve the condition of land under construction in which there were a lot of pits and holes. The expenditure was incurred in relation to land fillin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts a relief of Rs. 25,52,185/-. d) F,G,H - These represent disallowance on account of carriage inward(Rs. 5,63,150/-), legal and professional charges (Rs. 1,23,664/-) and accounting charges (1,20,000/-). As regards carriage inward, the appellant submitted that it represented payment to drivers for transportation. In the additional evidence the appellant gave vehicle number and payment details of these expenses on a perusal of which it was revealed that no one was paid in excess of Rs: 20,000/- which could have resulted in attraction of provisions of Section 40(a)(ia) of the Income Tax Act. The A.O in his remand report has harped on the point that there is every possibility that this evidence may have been created subsequently. But in view of lack of any basis behind A.O's statement, and exhaustive details submitted by the appellant I hold that no addition in respect of carriage inward should have been made by invoking u/s 40(a)(ia) of the Income Tax Act. Accordingly the appellant gets a relief of Rs. 5,63,150/-. As regards legal and professional charges, the appellant has given full details, giving the names of persons to whom these payments were made. The appellant also ....