TaxTMI 
TaxTMI 
2018 (3) TMI 37
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessment Year 2011-12. 2. The only issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in confirming the disallowance of Rs. 37 lacs claimed by the assessee on account of expenses incurred through sub-contractors, in the facts and circumstances of the case. 3. The brief facts of this issue is that the assessee is engaged in the business of fabrication and galvanizing of steel structures and erection of transmission towers. The return of income for the assessment year 2011-12 was filed by the assessee on 29.09.2011 declaring total income of Rs. 69,22,768/- under the normal provision of the Act and book loss of Rs. 72,68,669/- u/s 115JB of the Act. During the course of scrutiny proceedings, the ld. AO observed t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2010 and that they were in the business of trading in shares and investment in various unquoted companies. The only contract job done by most of them were only with the assessee. The ld. AO from the balance sheet downloaded from the ROC observed that, these companies are not in the business of doing these kind of services i.e. foundation services nor does have the infrastructure to render those services. He further observed that all these companies are declaring negligible income in their returns and the tax deducted by the assessee company is claimed as refund by the respective companies. The ld. AO observed that these companies have no means to render any kind of alleged foundation services that could be rendered to the assessee. Accordin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eturn of income; ii) Computation of total income for the assessment year 2011-12; iii) Audited accounts for the year under 31.03.2011; iv) Confirmation of accounts for the year under 31.03.2011; v) Bank statement of the payment from where the amount paid was clear; vi) Xerox Copy of the bank statement of the sub-contractor wherein the receipt of payment is recorded; The assessee pleaded that all the payments towards sub-contract charges were paid by the assessee through account payee cheques after due deduction of tax at source and that those companies in turn had disclosed the receipts from the assessee as their income in their respective income tax returns. Merely because the parties did not appear before the ld. AO would ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unt of expenses incurred through sub contractors on the alleged ground that the said expenses are bogus. 2. That on the facts and in the circumstances of the case, the ld. Commissioner of Income Tax (Appeals) failed to appreciate that all these payments were subjected to tax deducted at source (TDS) and the amount of TDS on such expenses were deposited to the credit of Central Government and that the said expenses were duly declared by the recipient sub contractor as their income in their Income Tax Returns and credit of TDS was allowed to them. 3. That on the facts and in the circumstances of the case, the ld. Commissioner of Income Tax (Appeals) erred in alleging that the aforesaid expenses incurred by the Appellant company were bogus....
X X X X Extracts X X X X
X X X X Extracts X X X X
....all the parties have duly disclosed the subject mentioned contract amount as income in their returns but the assessee could not produce any of the parties before the ld. AO and had not proved that those parties possess necessary infrastructure to render the specialized job of foundation services to the assessee, that too in Shillong, when they are stationed in Kolkata. Accordingly, he placed heavy reliance on the orders of the lower authorities and prayed for non-interference of the same in the facts and circumstances of the case. 7. We have heard the rival submissions and perused the materials available on record. It is not in dispute that the payments to sub-contractors were indeed made by the assessee through account payee cheques after....