2006 (4) TMI 108

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....1 crore 83 lakhs odd. It claimed to have received a sum of Rs. 75 lakhs from M/s. Himachal Futuristic Communication Ltd. (HFCL) in connection with the setting up a cable unit for benefit of the latter. Against the said amount, the assessee debited a sum of Rs. 65 lakhs on account of consultancy/service charges which were according to it paid by the assessee to M/s. IST Ltd. who had actually undert....

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....e petitioner-company on the one hand and IST Ltd., on the other hand to show that not only was IST Ltd. equipped with highly skilled and semi-skilled staff and engineers but the work assigned to IST Ltd. had actually being executed by it. It was also demonstrated before the Commissioner that tax had been deducted at source at the time of payment of Rs. 65 lakhs to IST Ltd. which payment was made t....

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....power and the capacity to execute the work in question and that payments made to it had resulted in a tax deduction at source of a sum of Rs. 2,87,500 paid to the Central Government. The Tribunal observed: "We also observe that the Assessing Officer has included the sum of Rs. 75 lakhs claimed by the assessee to have been received from HFCL as income but has not allowed the expenses of Rs. 65 l....

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.... it cannot be said that the work was not executed. The assessee claimed that the work was executed by M/s. IST Ltd. the associated concern of the assessee, as the assessee did not have the manpower and capacity to execute the work. It is the submission of the assessee that by executing the said contract the assessee has earned Rs. 10 lakhs as income. Had the assessee not undertaken this contract t....