TaxTMI 
TaxTMI 
2018 (5) TMI 60
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....ear 2008-09 wherein the additions made by the Assessing Officer has been confirmed which are not correct, not justified and bad in law. The following are the Grounds of appeal which may please be considered in favour of the Appellant for the Asst. Year 2008-09. 1. That the Order of the learned CIT (A) is not only erroneous both on facts and in law but is perverse. 2. That on facts and in law, the CIT (A) erred in upholding the disallowances made u/s. 40A(3) of the LT. Act, 1961 of Rs. 1,33,68,613. - without appreciating the fact that the cash payments made by the Appellant on different dates are below Rs. 20,000/- and hence to be allowed. 3. That on facts and in law, the learned CIT (A) ought to have given a clear finding in respect of disallowances made u/s. 40(a)(ia) of Rs. 5,21,75,632/- instead of directing the A.O to verify the claim of the Appellant in the light of the decision of the Hon'ble ITAT Spl. Bench, Visakhapatnam in the case of M/s. Merilyn Shipping and Transport, Visakhapatnam vs. ACIT vide ITA No. 477/Viz/2008. 4. That the provisions of S. 40(a)(ia) are extracted hereunder for your kind information: (ia) any interest, commissioner or brokerage....
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....e to payments made of Rs. 34,79,005/- towards Contract salaries. 12. The Ld AO ought to have appreciated that the provisions of section 194C are not applicable to payments made of Rs. 6,04,7731- towards Building maintenance. 13. The Ld AO ought to have appreciated that the provisions of section 194C are not applicable to payments made of Rs. 89,03,975/- towards Repairs & maintenance. 14. The Ld AO ought to have appreciated that the provisions of section 194C are not "applicable to payments made of Rs. 24,75,179/- towards Computer maintenance. 15. The Ld AO ought to have appreciated that the provisions of section 1941 are not applicable to payments made of Rs, 96,19,2001- towards Lease rent. 16. The Ld AO ought to have appreciated that the provisions of section 194C are not i applicable to payments made of Rs. 1,65,93,176/-towards Advertisement (others). 17. The Ld AO ought to have appreciated that the provisions of section 194C are not applicable to payments made of Rs. 15,81,965/- towards Vinyl Flooring Expenses. 18. The Ld AO ought to have appreciated that the provisions of section 194C are not applicable to payments made of Rs. 9,04,228/- towards Video Photo....
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....obtained the copies of bank A/c statements of the assessee, which revealed that the assessee has made payments through bearer cheques in excess of Rs. 20,000/- in violation of section 40A(3) of the Act. He arrived at the total sum of Rs. 1,33,68,613 as paid in violation of section 40A(3) of the Act and he accordingly disallowed the same. Aggrieved, the assessee preferred an appeal before the CIT (A) who confirmed the addition by holding that the assessee has not produced any evidence in support of its contention that the payment in question were below Rs. 20,000 on different dates and that there was no violation of section 40A(3) of the Act. The assessee is in second appeal before us. 5. The learned Counsel for the assessee has raised further an alternative argument before us that out of the total payments made in cash/bearer cheques, main payments are made to the employees of the assessee and therefore, they are not covered by the provisions of section 40A(3) of the Act. He also drew our attention to the details of the payments at Pages 8 to 12 of the paper book filed by him and submitted that all these details were filed before the authorities below, but they have not looked int....
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.... disallowable u/s 40a(ia) if no TDS has been made. Therefore, the decision of the CIT (A) on this point has to be set aside. In such circumstances, the alternate plea of the assessee assumes importance. 10. The learned Counsel for the assessee has placed reliance upon the decision of the Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd vs. CIT, reported in (163 Taxmann.355) wherein the Hon'ble Supreme Court was considering the case of the assessee who was considered as an assessee in default u/s 201(1) and interest u/s 201(1A) was also made. The Hon'ble Supreme Court has held that the assessee therein, cannot be treated as "as assessee in default" u/s 201(1), if the recipient has offered the income and has paid the taxes thereon. However, with regard to the interest u/s 201(1A), the Hon'ble Supreme Court has held that the same is payable till the date of payment of taxes by the deductee assessee. He submitted that in the case of the assessee before us, the recipients of the payment, have already offered the income in their hands and therefore, the assessee cannot be treated as "as assessee in default". Further, the learned Counsel for the a....
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....y the resident payee referred to in the said proviso.]" In view of the above provision and since the assessee has not been treated as an "assessee in default" u/s 201(1) of the Act, we hold that no disallowance u/s 40a(ia) can be made. The assessee's additional ground of appeal No.10 is accordingly treated as allowed for statistical purposes. 13. As regards the grounds of appeal No.7 against the disallowance u/s 43B of the Act of the payments made towards APGST, VAT, ESI, Professional Tax Payable amounting to Rs. 25,35,314 is concerned, brief facts are that the assessee had shown these amounts as outstanding at the end of the previous year and therefore, the AO made the disallowance. The CIT (A) also confirmed the said disallowance holding that the assessee has not substantiated the claim and has not brought out any evidence to prove that the payment, in question, were made within the time specified as per the provisions of section 43B of the Act. The learned Counsel for the assessee submitted that the assessee has not debited these amounts to the P&L A/c and has not claimed the same as expenditure and hence they cannot be disallowed u/s 43B of the Act. He has drawn our attentio....