TaxTMI 
TaxTMI 
2019 (4) TMI 1282
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....443/2012 dated 14-3-2013. 2. FOR THAT the Ld. CIT(A) did not appreciate the petitioner's written submission in proper perspective and he was not justified in arbitrarily sustaining estimated disallowance of discount to field staff and salary to staff to the tune of 15% of the expenses made. 3. FOR THAT the Ld. CIT(A) erred in law in sustaining disallowance to the tune of Rs. 1,33,500/- on account of advertisement charges U/S 40(a)(ia) although no TDS was deductible under the law on the said expenses as the sums were paid to various advertisers through agent and each payment being below threshold limit for deduction of TDS. 4. FOR THAT the Ld. CIT(A) was not justified in sustaining 15% of ad hoc disallowance of bona fide and genuine supervision charges without bringing any material on record for confirming such disallowance. 5. FOR THAT the Ld. CIT(A) failed to appreciate that the legal charges paid amounting to Rs. 34,700/- to Advocate which was inclusive of various reimbursement of expenses and such payment cannot be subjected for Tax Deducted at Source. 6. FOR THAT the Ld. CIT(A) omitted to adjudicate the appellant's submission....
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..... Aggrieved by the addition made by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the addition made by the Assessing Officer. 6. Aggrieved by the order of the Ld. CIT(A) the assessee is in appeal before us. 7. The ld. Counsel for the assessee reiterated the submissions made before the authorities below whereas the ld. The ld. DR has primarily reiterated the stand taken by the Assessing Officer which we have discussed in our earlier para and the same is not being repeated for the sake of brevity. 8. We have heard both the parties and perused the material available on record. We note that the assessee was unable to reconcile the difference in Form 26AS and ld. Counsel also fairly agreed with us that assessee has failed to reconcile the difference. However the counsel submitted before us that the entire difference of Rs. 5,82,626/- should not be treated as income of the assessee. Only the gross profit rate should be applied on Rs. 5,82,626/-. The Assessing Officer as well as ld. CIT(A) both were wrongly treated the entire receipt as undisclosed income of the assessee instead to tax the profit element. We note that ....
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.... parties and perused the material available on record. We note that the Assessing Officer has not quoted various cases in respect of salary paid by the assessee found to be bogus. He has not pointed out any reason by which it can be inferred that the assessee's employment of persons on salary would have been for non-business purposes and to inflate the expenses. Apart from this we note that the discount allowed to field staff were for the purpose of assessee's business therefore it is allowable expenses u/s 37 of the Act. We note that the Assessing Officer could have ventured into estimation only after rejecting books of accounts of the assessee u/s 145(3) and thereafter by best judgment assessment u/s 144 of the Act. Here in this case, the Assessing Officer has not passed any order u/s 144 of the Act. The Assessing Officer thus without rejecting books of accounts of the assessee has gone for estimation on suspicion and conjectures that the assessee may be inflating its expenses by paying salary to staff and allowing discount to field staff. Therefore, action of the Assessing Officer is not acceptable. On appeal by the assessee, the ld. CIT(A) held that in order to protect the i....
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....oods/ material on which no TDS is required to be deducted. However, ld. CIT(A) has confirmed the addition for the balance amount of Rs. 1,33,500/- (Rs. 6,28,978/- - Rs. 4,95,478/-) However for the balance amount of Rs. 1,33,500/- as confirmed by ld. CIT(A), the ld. Counsel explained the Bench that the recipient of the said amount has shown in his return of income, as income and offered the taxes thereon. We find merit in the submissions made by the counsel that if the payee has included the receipts of Rs. 1,33,500/- in his books of accounts and has offered for taxes then disallowance on account of non-deduction of TDS, will not arise. The ld. DR for the revenue has fairly agreed with the submission made by ld. Counsel, therefore, we remit this issue back to the file of Assessing Officer with the direction to examine whether receipts of Rs. 1,33,500/- has been offered for taxation by the payee. If the payee has offered for taxation then no disallowance shall be made in respect of receipts of Rs. 1,33,500/- In respect of supervision charges of Rs. 11,28,047/- the ld. CIT(A) disallowed, on ad hoc basis 15% of the said supervision charges. We note that ld. Assessing Officer disa....
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....n below: Smt. Sur Rs. 1,71,000.00 Mr. Yogesh Nigam Rs. 75,731.00 Mr. Abhishekh Nigam Rs. 75,731.00 Ms. Ankita Nigam Rs. 75,731.00 Rs. 3,98,193.00 We note that all the payments to each person is below threshold limit of Rs. 1,80,000/-, and since it is below threshold limit therefore this does not require any deduction of TDS. However, considering the principle of natural justice and fair play we remit this issue back to the file of the Ld. Assessing Officer to examine whether each payment to these three land lord is below threshold limit of Rs. 1,80,000/- or not, if it is below Rs. 1,80,000/- no disallowance would be made. Therefore we direct the Ld. Assessing Officer to examine the payments and adjudicate this issue in accordance with law. Hence we allow this ground raised by the assessee for statistical purposes. 24. Ground no. 7 raised by the assessee relates to ad hoc disallowance to the tune of Rs. 30,56,072/- on account of general expenses, miscellaneous expenses, conveyance expenses, printing, repairs and maintenance expenses. 25. The brief facts qua the issue are that the Assessing Officer made the estimated disallowance @ 20%....