2021 (1) TMI 326

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....tains to the Assessment year 2008-09. The appeal was initially admitted by a bench of this Court vide order dated 03.01.2018 on the following substantial question of law: "Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in setting aside the disallowance made under section 40(a)(ia) of the Act by holding that assessee made only journal entries in the books and as such it does not require deduction of TDS even when the assessing authority has rightly held that the assessee required to deduct TDS towards payments made sub contractor as per section 195 of the Act and non deduction of TDS attracts section 40(a)(ia) of the Act?". 2. Thereafter, after hearing the parties, by an order passed ....

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....return for the Assessment Year 2008-09 on 06.09.2008 in which total income of Rs. 1,70,10,894/- was declared. The case was selected for scrutiny and notices under Section 143(2) dated 21.08.2009 and Section 142(1) dated 04.06.2010 and 12.08.2010 were issued and served on the assessee. 4. The Assessing Officer on perusal of the statement of accounts, noticed that assessee has debited a sum of Rs. 62,49,85,438/- as sub contract charges under the head of 'personnel cost' as per profit and loss account. Thereupon the show cause notice was issued as to why the aforesaid payment should not be disallowed under Section 40(a)(i) of the Act. The Assessing Officer by an order dated 29.12.2011 held that the assessee has not established by su....

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....d invoices detailing out the transactions to show that they were raised in connection with providing of services claimed by the assessee and the said amount is paid towards reimbursement of expenses. It is also urged that the tribunal ought to have appreciated that the assessee had failed to discharge the burden. It is also argued that the tribunal ought to have determined the question whether the claim of the assessee has been established or not but, the tribunal without analyzing the findings recorded by the Assessing Authority as well as the Commissioner of Income Tax (Appeals) has held that the entry in question is a journal entry and allowed the appeal. It is submitted that the finding recorded by the tribunal is perverse and it has fa....

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....preme Court. It is also argued that the person who has paid money is responsible to deduct tax and pay the same to the government and no tax at source has to be deducted in the absence of any oral / written agreement. 7. We have considered the submissions made by learned counsel for the parties and have perused the record. The Assessing Authority inter alia held that even though opportunities were given to the assessee to substantiate its claim, however, the assessee has only relied on several decisions without establishing its claim by producing the documents called for, which would support its claim. The Assessing Authority for the reasons recorded in para 3.3 to para 6 has rejected the claim of the assessee under Section 40(a)(i) of t....