2018 (10) TMI 982

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... labour charges payments, interest of Rs.13,26,873/- u/s. 36(1)(iii), miscellaneous cash purchases of Rs.6,80,842/-, sales promotion expense of Rs.2,34,810/- and payment made to certain individuals of Rs.3,82,000/-; respectively in assessment order dated 25.03.2013. 2. We advert to first issue of estimated disallowance amounting to Rs.16,01,158/- @ 10% of the total labour charges paid amounting to Rs.1,60,11,582/- there does not appear to be much dispute about the fact that both the lower authorities have made the impugned disallowance on account of assessee having paid this labour charges in cash without being supported by the relevant bills/vouchers produced for necessary verification during assessment as well as lower appellate procee....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s to disallowance of Rs. 13,26,873/- made by the AO. The fact of the case is that the AO found that thee appellant had taken secured/unsecured loan on which interest during the year of Rs. 14,53,036/- was paid and claimed. But at the same time certain interest free loan and advances to the tune of Rs. 1,31,24,199/- was given to various persons on which no interest was charged. The AO calculated interest on such advances at Rs. 13,26,873/- and accordingly claim of interest u/s. 36(1)(iii) was reduced/disallowed. However, the appellant claimed that out of total advances Rs. 15,00,000/- was paid to Eastern India Health Care Foundation who were running a hospital, Rs. 1,50,000/- was given to supplier, Kotlron Components, Advance given to Sanroy....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....see's books of account qua the impugned loans. He has rather added notional interest thereupon to the tune of Rs.1,63,090/- Rs.18,000/-, Rs.1,80,000/- and Rs.9,65,783/-; respectively, totaling to the sum in dispute of Rs.13,26,873/-. Hon'ble Delhi high court's decision in M/s Shivnandan Build Con Pvt. Ltd. vs. CIT Writ Petition 625/2013 dated 30.02.2015 summarises the relevant settled legal proposition to conclude that such an addition of notional interest is not sustainable. We thus direct the Assessing Officer to delete the instant disallowance in question of Rs.13,26,873/-. 7. We proceed further to notice that assessee's next two substantive grounds challenge correctness of disallowance / addition(s) of miscellaneous cash purch....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....stant corresponding substantive grounds. 8. This leaves us with the assessee's last grievance challenging both the lower authorities action disallowing its payment of Rs.3,82,000/- made it various individuals on account of its failure in deducting TDS attracting u/s. 40(a)(ia) of the Act. There is no dispute as per assessment order that the impugned payment made to Ramashish Mukherjee, Anjan Cooomer, Nirmala Saha, A.S. Khan, N.K. Maity and Bipulendra Thakur involve accounting charges and legal/professional charges paid deducting TDS. The Assessing Officer rejected assessee's plea claiming the same to be salary payments because the fact that there was no evidence of regular employment as upheld in the course of lower appellate proceedings....