TaxTMI 
TaxTMI 
2022 (8) TMI 188
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....s.12,01,860.00 and Rs.80,259.00 instead of deleting the same in entirety. 3. The facts in brief are that the assessee in the present case is an individual and is a proprietor of the firm namely M/s Vijay trading Co. and Vasuki Trading Co. The assessee is also a partner in the partnership firm. The AO during the assessment proceedings found that the assessee has, inter-alia, not shown certain receipts/income from various parties despite the fact that these parties have deducted the TDS in the name of the assessee as evident from form 26AS. The necessary details of the parties, amount of gross income, amount of TDS is detailed below: Section Name of the party Amount TDS 194A Gruh Finance Ltd. 6895 690 194C &nb....
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.... in cash and without deducting the TDS. Thus, the AO was pleased to make the addition of Rs.20,91,670.00 to the total income of the assessee. 7. The AO, likewise, against the receipt of commission of Rs.80,259.00 from the Bajaj Allianz life insurance company Ltd was of the view that the assessee has already claimed expenses on account of maintaining his office at Wankaner. Thus, as per the AO, there cannot be allowed any other deduction against such income in the name of the expenses. Accordingly the learned AO was pleased to confirm the addition of Rs.80,259.00 to the total income of the assessee. 8. Aggrieved assessee preferred an appeal to the learned CIT-A who has confirmed the addition in part by observing as under: "6.4....
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....mount has been paid in cash without deduction of any TDS. The appellant's P&L a/c was perused and it was seen that the appellant has shown receipts of only Rs.8,90,000/- as "Explosive Job Work Income" in place of Rs.20,91,670/-. In the said P&L a/c. appellant has claimed various expenses including purchases, administrative expenses, etc. The AO has added the entire item of Rs.20,91,760/- only on the ground that appellant has not shown any receipts from IVRCL in his P&L a/c. I don't agree with the AO in adding the entire receipts of Rs.20,91,760/-. Appellant has already shown Rs.8,90,000/- as "Explosive Job Work Receipts." Meaning thereby that implicitly expenses of Rs.12,01,670/- as payments to sub contractor had been claimed. AO....
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.... u/s. I94C and therefore this receipt is definitely from contractual work. Thus it is Evidence and admitted even by the Ld. CIT(A) that this transition relates to contract received, 3. Thus, the department accept that this is contract receipt Then even if it is remain to be disclosed what should be rate of the taxability of such income. The Hon I TAT, special bench has been kind enough to hold that if should be taxed @ maximum bruin rate as described by the department at 8% only. 4. In this case out of amount of Rs.291760 assessee has already shown Rs.890000 which is more than 8% requiring no addition. 5. Alternatively from the balance of Rs.1201670 not accepted by the ld.CIT(A) who him self admitted that entred r....
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....O to the tune of Rs.12,01,860.00 after giving part relief of Rs.8,90,000.00 only. 13. From the preceding discussion, we note that there is no ambiguity to the fact that the amount received by the assessee from the company namely IVRCL LTD. for Rs.20,91,760.00represents the contract receipt/business receipts. Thus the entire amount cannot be added to the total income of the assessee. In our considered view only a percentage of profit embedded in such amount of contractual receipts can be brought to tax. In this regard we find support and guidance from the order of the Hon'ble Gujarat High Court in the case of CIT vs. President Industries reported in 258 ITR 654 where it was directed to make the addition only to the extent of gross profit ....
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....Act, it is pertinent to see whether the provisions of TDS are applicable to the assessee being an individual. In other words the provisions of TDS shall be applicable in case of an individual if its books of accounts are subject to audit in pursuance to the provisions of section 44AB of the Act. But there is no such finding qua to this provision of law. Until, it is brought on record that the assessee was subject to the provisions of section 194C of the Act, we are of the view that no disallowance can be made of the expenses claimed by the assessee under the provisions of section 194C of the Act read with section 40(a)(ia) of the Act on account of non-deduction of TDS. In view of the above, we disagree with the finding of the learned CIT-A ....