TaxTMI 
TaxTMI 
2020 (11) TMI 338
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.... The Commissioner of Income tax (Appeals) is contrary to facts and circumstances of the case. 2. The learned CIT(A) ought to have upheld the disallowance u/s.40a(ia) for the A.Y 2012-13 as the assessee did not submit any confirmation from the payee to the effect that returns of income including receipts from the assessee was filed u/s.139(1) of the Act by the payee. 3. The learned CIT(A) erred in allowing the appeal for the A.Y 2012-13 of the assessee by relying on certificate issued by the payee for the A.Y 2013-14." 3. Brief facts of the case are that the assessee company is engaged in the business of manufacturing and trading in stamping and molding components filed its return of income for the assessment year 2012-13 on 30.09.2012 ....
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....made M/s.Spectronic Plating Pvt. Ltd., u/s.40a(ia) of the Act for non-deduction of TDS as per provisions of section 194C of the Act. 4. Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). Before the CIT(A), the assessee has challenged the findings of the Assessing Officer in coming to the conclusion that amount paid to M/s.Spectronic Plating Pvt. Ltd is job work which comes under the definition of job work as defined under section 194C of the Act in the light of copies of invoices issued by the supplier and argued that M/s.Spectronic Plating Pvt. Ltd. Purchases gold plates directly from supplier and makes value addition and then sell goods to the assessee charging central sales tax and thus,....
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.... provisions, then no disallowance could be made u/s.40a(ia) of the Act. The learned CIT(A) further noted that the assessee has also proved the fact that payee has included the impugned amounts in their income tax returns and paid necessary taxes and hence, once particular receipt is taxed in the hands of payee, then disallowance u/s. 40a(ia) cannot be made for non-deduction of TDS u/s.194C of the Act. Aggrieved by the CIT(A) order, the revenue is in appeal before us. 6. The learned DR submitted that the learned CIT(A) ought to have upheld the disallowances made by the Assessing Officer u/s.40a(ia) of the Act, as the assessee did not submit any confirmation from the payee to the effect that return of income included receipts from the assess....
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....e could be made u/s.40a(ia) of the Act for non-deduction of tax at source on said payment. 8. We have heard both parties and perused the materials on record along with the case laws cited by the assessee. We find that the CIT(A) has recorded categorical finding to the effect that gold plating done by the supplier M/s.Spectronic Plating Pvt. Ltd., would not come within the mischief of section 194C of the Act, because the payment was in the nature of purchase of materials which attracts central sales tax. We further noted that learned CIT(A) has also recorded categorical findings in the light of the decision of the Hon'ble Supreme Court in the case of M/s. Hindustan Coco cola Beverage (supra) that when the payee has included the amount recei....