TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 83
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....ng national highway works, expenditure covered with rules 6DD, therefore the disallowance is totally unjustified as per settled case laws in the cases of (2007)ITD-104, Pg:-537, Vishal infrastructure Ltd Vs ACIT.(Hyd), (2016) ITD-156, Pg:- 34, ITO Vs Shanti Comrn odities. (Pune). 3. The CIT (A) furthererred in law in disallowing amount of Rs. 5,77,052/- represents interest in remittance of delay in TDS where the law itself allows under the relevant provisions to pay TDS with interest at a _ prescribed rate and therefore it is not a violative and prohibitive under explanation 1 of 37(1) and as per settled case law "2016-TT]-175, Pg:-81, Gillco developers & Builders (P) Ltd Vs DCIT(Chd). 2. The assessee also filed the following additional ground relying on the decision of National Thermal Power Co. Ltd. Vs. CIT, [1998] 229 ITR 383: "Appellant being exclusively in the construction of National Highways, is eligible to claim deduction U/s 80IA of the Income Tax Act, 1961 in respect of profit & gains, which was omitted to claim in the assessment stage or in appellate stage may kindly be admitted in accordance with provisions of law." 3. Since this ground is purely legal in nature f....
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....7 for under declared tax and the Audit raised a penalty demand of Rs. 4,10,288/-, which is no way connected to the payment as penalty and, therefore, it is an allowable expenditure. He further stated that though it is mentioned as sales penalty it is a sales tax adjustment. He relied on the decision in the case of ITO Vs. Shanti Commodities, [2016] 156 ITD 34 (Pune). 7.4 The ld. DR relied on the orders of revenue authorities and submitted that the penalty was raised by the commercial taxes department for under declared tax and not for delay in payment of sales tax and, therefore the same cannot be allowed u/s 37(1) as held by the revenue authorities. He, therefore, submitted that the order of the CIT(A) may be upheld. 7.5 We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. We observe that it is payment raised for the period from 4/2005 to 5/2007 for under-declared tax and imposed penalty vide order dated 30/07/2009 by the commercial tax department. Any penalty paid for violation of any law, is not allowable u/s 37 of the Act. Our view is supported by the decision of Hon'ble Delhi High Court in the ....
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.... on this account and accordingly, upholding the order of CIT(A), we dismiss the ground raised by the assessee on this issue. 8. As regards ground No. 2 relating to Disallowance of Rs. 35,28,444/- towards cash payments to labour, during the assessment proceedings, the AO noticed from the books of account and bills/vouchers that some of the labour payments were made in cash. The AO, therefore, proposed to disallow 15% of cash payments to labour. The AR of the assessee company stated that the projects sites were in remote areas and the labour procured from respective localities where bank facility is not available. Further, he also stated that labour were illiterate, hence, the company was forced to make cash payments to labour. The assessee was, therefore, requested to confine the disallowance to the extent of 10%. Rejecting the submissions of the assessee, the AO made a disallowance of Rs. 35,28,444/- @ 15% (Rs. 2,35,22,961 x 15%) of the cash portion of labour payments. 8.1 Before the CIT(A), the assessee submitted that the execution works spread over different states in remote places for construction of roads and the labour payments supported by bill and vouchers which was author....
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....the assessee claimed expenditure of interest on TDS amounting to Rs. 55,77,052/-. When the AO asked the assessee as to why it should not be disallowed and the AO noted that the AR of the assessee stated no objection for addition. Therefore, the AO disallowed the aforementioned amount. 9.1 Before the CIT(A), the assessee submitted that the delay was caused in payment of TDS was on account of paucity of funds and the TDS is nothing but withholding amount of the respective parties from whom services/materials/goods procured which is allowable deduction in its hands and the credit goes to the respective parties. Further, it was submitted that according to the provisions of section 2(43) rws 40(A)(ii) of the Act, any interest relatable to the tax payable by the assessee which inclusive of self-assessment. It was also submitted that advance taxes, self-assessment and interest thereon is not allowable expenditure whereas in this case, the interest relates to TDS payable under Chapter XVII - B i.e. deduction at source. It was therefore submitted that the disallowance made by the AO was totally unjustified. The assessee relied on the decision in the case of M/s Gillco Developers & Builders....