TaxTMI 
TaxTMI 
2024 (1) TMI 1027
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....aking submission against the proposed disallowance as per the directions issued by the CBDT for faceless assessment in notification No.61/2019 dated 12.01.2019. 2. That CIT(Appeals)-NFAC has erred in both fact and in law in confirming the disallowance of expenditure made by the National E-Assessment Centre of amounting to Rs. 18,97,193/- which was never claimed by the appellant. 3. That the assessee craves to add, amend or delete any of the above grounds of appeal during the course of hearing." 2. Succinctly stated, the assessee is a Joint venture entity ("JV" for short) formed to procure the work contract of road construction in terms of tenders invited by the Ministry of Road Transport and Highways (North). The JV is a zero-profit entity wherein all the work/project undertaken by it was subcontracted to its members. The project undertaken by JV was executed by its members in their individual capacity including risks and resources and the corresponding revenue of the work was also shared on the basis of the work contribution made by the members. 3. The assessee had e-filed its return of income for A.Y.2018-19 on 28.10.2018 declaring an income of Rs. Nil. Su....
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....xpenditure' incurred consequent to failure to deduct or pay the TDS, as prescribed under the provisions of the Act, cannot be allowed as deduction. 20. In view of the-above elaborate discussion, 1 do not allow payment of interest for the delay in deposit of TDS as a deduction under section 37 of the Act and bring to tax Rs. 18,97,193/-." 5. Accordingly, the A.O vide his order passed u/s. 143(3) r.w.s. 143(3A) & 143(3B) of the Act dated 28.01.2021 after disallowing the assessee's claim for deduction of interest paid on delayed deposit of TDS determined its income at Rs. 18,97193/-. 6. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. The CIT(Appeals) finding no infirmity in the view taken by the A.O upheld the disallowance of assessee's claim for deduction of interest on delayed deposit of TDS of Rs. 18,97,193/- 7. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal. 8. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and material available on record, as well as considered the judicial pronouncements that....
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.... TDS was a back-to-back basis payment which was not claimed by the assessee as an expenditure in its profit and loss A/c. failed to rebut the same. 11. I have given a thoughtful consideration to the aforesaid issue, i.e., sustainability of the disallowance of interest on delayed deposit of TDS of Rs. 18,97,193/- (supra) by the assessee. Before adverting any further, it would be relevant to cull out the Profit and loss account of the assessee for the year under consideration, i.e., A.Y. 2018-2019, Page 5 of APB which reads as under: Admittedly, it is a matter of fact borne from record that the assessee- JV had not claimed/debited the amount of interest on delayed deposit of TDS of Rs. 18,97,193/- (supra) as a deduction in its profit and loss account. As stated by the Ld. AR, and rightly so, the aforesaid factual position can safely be gathered from the "Interest and penalty on TDS A/c." as appearing in the books of the assessee during the year, as under:- As is discernible from the aforesaid ledger account the amount of interest on delayed deposit of TDS of Rs. 18,97,193/- (supra) was debited by the assessee JV to the account of sub-contractor (JV member) i.e. M/s. Barbarik....
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....observations. 15. As the addition made by the lower authorities has been vacated by me, therefore, I refrain from dealing with the contentions of the Ld. AR wherein he has assailed the impugned addition/disallowance on the ground that the same was made without affording an opportunity to the assessee which, thus, is left open. Thus, the Ground of appeal No. 1 is disposed off accordingly. 16. Ground of appeal Nos. 3 & 4 being general in nature are dismissed as not pressed. 17. In the result, appeal of the assessee is allowed in terms of the aforesaid observations. Order pronounced in open court on 22^nd day of November, 2023. ============= Document 1 BARBRIK-DEEVEE (JV) {A Joint Venture between Barbrik Project Limited as leader of JV and Deevee Projects Limited as member of JV) STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED ON 31ST MARCH, 2018 AMOUNT (RS.) PARTICULARS Work Contract Receipts 12.85,43,588.00 Goods & Service Tax Pavable Re-imbursed By Members 28,23,124.00 14,26,726.00 42.49,850.00 PARTICULARS Sub-Contract Expenses By Members - By Others Duties & Taxes Work Contract Tax -Labour Cess Other Expenses ....