AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 798
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....d 2016-17, the assessee has declared the income under the provisions of section 44AD of the Act i.e. net profit to tax @ 8% of the gross receipt. Accordingly, notices were issued to the assessee asking for relevant information. After considering the submissions of the assessee, AO has not found any variance in the gross receipt declared by the assessee, in order to verify the major expenditures claimed by the assessee. The assessee was asked to submit the details of transaction with All India Carrying Corporation and Mukesh Transport Agency, expenditure related to Gaya Sight, Majdoori expenses and details of gross rent declared by the assessee in its books of account, accordingly, summons were issued u/s 131 of the Act to Vishal, 665, Mobile Tower Wali Gali, Moti Vihar Colony, Kedar Nagar, Agra to whom assessee has made substantial payments against the work contract assigned to them by the assessee. From the written submissions against 142(1) notice dated 20.09.2019, the AO observed that most of the payments under the head majdoori, expenses are entirely made in cash and all those vouchers were prepared manually and these were remained in proper vouchers. Against the summons issued....
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....appellant has not provided the exact nature of work done by those persons and copies of invoices raised. Secondly, there is only one invoice claimed to be raised by each of these 4 persons and that is also in March, 2017. Thirdly, all the payments had been made in cash below Rs. 20,000/- on a single day before raising the invoice by those persons. Fourthly, TDS was required to be deducted on the date of payment or credit whichever is earlier, but no tax was deducted when payments were made. Lastly, these persons did not appeared before the AO in response to summons issued under section 131 of the Act for personal appearance and even, the appellant had not produced those persons for examination in spite of specifically asked by the AO. It has also been noticed that the disallowance of Rs. 28,66:972/- has been made out of total contract payments of Rs. 1,17,43,682/- as per 26AS. If all these facts are considered in totality, the genuineness of these expenses have not been established. Therefore, I am in agreement with the findings of the AO while disallowing these expenses. The case laws relied upon by the appellant are not going to help the appellant as those decisions were delivere....
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....ualification as to impugned "Sub- Contract Majdoori". ? The Entries in the Books of Account as per Section 34 of Indian Evidence Act is Evidence. 4.6 That during the year and in the preceding year, the Gross Receipts are as follows :- A.Y. Gross Receipts 2017-18 Rs. 2,00,54,349/- (Under Assessment) 2016-17 Rs. 6671295/- 2015-16 Rs. 27,68,209/- In relevant A.Y.2017-18 all the Receipts are through Banking Channels. (It shall not be out of place to mention here that from A.Y.2017-18 the Income u/s 44AD is to be take @6% which comes to Rs. 12,03,260/- on Gross Receipts of Rs. 2,00,54,349/ -. ) The Gross Income shown is Rs. 12,08,940/- (Rs. 4,94,874/- Net Profit + Rs. 6,60,000/- Partner Remuneration + Rs.54,066/- Partner Interest) The Books of Accounts for the first time were Audited u/s 44AB of the I.T. Act for compliance as to 44AB of the I.T. Act, being the Turnover of Rs. 2,00,54,349/- 4.7.1 That the Case was Selected for Scrutiny (CASS) categorically mentioning ONLY Reason in Notice u/s 143(2) dt. 27.09.2019 :- "2. While acknowledging the care and diligence you may have taken in preparin....
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.... Nagar, Agra (Para 4.9.2) (iii) Rs. 6,63,980/- Shri Vivek Miittal (PAN ASVPM6766E) 102, 6/19 ML Plaza, Barah Bhai Gali, Belanganj, Agra (Para 4.9.3) (iv). 7,43,367/- Shri Vikash Mittal (PAN AUMPM6768P) 102, 6/19 ML Plaza, Barah Bhai Gali, Belanganj, Agra (Para 4.9.4) Rs. 28,60,972/- 4.9.1(i) Re: Impugned Addition Rs.7,03,217/- w.r.t. "SUB-CONTRACT MAJDOORI" OF "VISHAL GOYAL" (PAN: BZHPG7627J) The following Documents stands furnished in confirmation & proof of Genuineness of Rs.7,03,217/- to "VISHAL GOYAL" (PAN: BZHPG7627J), Khasra No.665, Mobile Tower Bali Ganj, Moti Vihar Colony, Kedar Nagar, Agra -282010 (U.P.) are enclosed: NAME PAN AMOUNT PAID TDS DEDUCTED/ PAID SHRI VISHAL BZHPG7627J Rs. 7,03,217/- Rs. 14,064/- (i.) Copy of "Ledger Account" duly Confirmed by "VISHAL" for amount of Rs. 7,03,217/- (Pg.22) (ii.) Copy of TDS Certificate (Form No.16A) issued by Traces (I.T. Department) is also mentioning Full Address showing TDS Paid of Rs.14,064/- on Amount of Rs.7,03,217/- (Pg.23) As per above TDS Certificate itself, the Nature of Payment is 194C of the I.T. Act which proves under the he....
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....ng Officer holding that on ground of residential address and registration address of some sub-contractors being same, there was no reason to disbelieve evidence - Whether where TDS was deducted on payments made to sub-contractors and other details were also furnished, Tribunal committed no error in deleting entire addition made by Assessing Officer - Held, yes. (Emphasis Supplied Pg.42, Head Note Para) Held: 6.1 .. It has also been argued before us by learned senior counsel Mr. Shah that these being the sub-contractors who are mainly on the move from one place to another and therefore, ordinarily for the convenience of one and all, the address given by many of them was the same address. It could be also noticed that the TDS was deducted on payments made to these sub- contractors and other details were also furnished. From the totality of the 'facts, the Tribunal has committed no error in deleting the entire addition made by the Assessing Officer. The entire issue is based on factual matrix. From the sufficiency of evidence, when the Tribunal has held in favour of the assessee and when no question of law much less substantial question of law has arisen, this....
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....d the rival submissions as also the documents placed before us. It is understood that the income under the head 'business and profession' would be earned by making certain relevant expenditure. While demonstrably unjustified expenditure could be disallowed, but it is also clear that there are limits to the kind of documentation and evidences that a normal business would be expected to maintain. In this case, the assessee has adequately demonstrated that he has meticulously maintained documents and even deducted tax at source on the payments made to vendors who were associating with him in executing turnkey projects. It is felt that even the ld. CIT(A) has failed to appreciate that there are limits to the kind of evidences that any normal business entity would have with it to justify the expenditure incurred for earning business income. In this case it is felt that the assessee could not have done any better than what he has already done in terms of filing detailed documents to justify the expenditure incurred. We draw strength from two cases of the Hon'ble Calcutta High Court in this regard to show that the burden of proof on the assessee regarding proving expenditure u....
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....ax authorities have to decide whether the expenditure claimed as an allowance was incurred voluntarily and on grounds of commercial expediency. In applying the test of commercial expediency for determining whether the expenditure was wholly and exclusively laid out for the purpose of the business, reasonableness of the expenditure has to be adjudged from the point of view of the businessman and not of the revenue. (Emphasis supplied Pg.71, 8th Line) We agree with the High Court that the Order of the Tribunal disallowing the claim for allowance of the whole of the additional remuneration was not supported by any evidence" (Emphasis supplied Pg.71, Last Para, Last 3rd Line) It was Categorically submitted in the Submission dt.14.10.2019 (Para 5) :- "5. That the onus that lay upon the assessee stands unequivocally fulfilled and discharges by providing the PAN, copy of ITR, confirmations and respective TDS Certificate." (vi.) 7 ITJ 319 (Hon'ble High Court of MP) The C.I.T. vs. Barjatiya Children Trust (Copy enclosed Pg.55 to 58) Head Note: "AO required production of creditor- Creditor not produced- Addition made - ....