TaxTMI 
TaxTMI 
2025 (4) TMI 2140
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....s rent instead of the actual payments made for contract by the assessee. The action of authorities below is wrong, illegal, misconceived, unjustified and bad at law therefore it should be quashed. 3. On the facts and in the circumstances of the case and in law, the authorities below have erred in rejecting the books of account of the assessee u/s 145(3) of the act on the basis of wrong allegations whereas the books of accounts of assessee were duly audited under Companies Act as well as Income Tax Act respectively without any qualification. The action of authorities below is wrong. illegal, misconceived, unjustified and bad at law therefore it should be quashed. 4. On the facts and in the circumstances of the case and in law, the authorities below have erred in making addition for a sum of Rs. 1,62,86,587/- to the income of the assessee by enhancing the estimated NP ratio to 16.35% of total turnover instead of actual 5.45% NP ratio occurred by the assessee. The action of authorities below is wrong, therefore it should be quashed. misconceived, unjustified and bad at law 5. On the facts of the circumstances of the case and in law the authorities below have....
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....unt u/s 145(3) and assessed the income of the assessee at an estimated NP ratio of 16.35% of total turnover as against NP of 5.45% declared by the assessee resulting in addition of Rs 1,62,86,587/- 5. The assessee was aggrieved and made an appeal before the CIT(A), who upheld all the additions made by the AO. Aggrieved, assessee is now before us. 6. With respect to ground no 1 and 2, the Ld. AR of the assessee submitted that the issue of deduction u/s 40(a)(ia) has been settled by the Delhi High Court in the case of Pr. CIT vs. Future First Info Services Pvt. Ltd where in it was held that whenever there is short deduction of TDS, there is no applicability of 40(a)(ia). The assessee also relied on the decision of Calcutta High Court in the case of CIT Vs S.K.Tekriwal (2014) 46 taxmann.com 444(Cal). The ld. AR fairly conceded that the Kerala High Court in the case of CIT versus PVS Memorial Hospital Ltd reported in 60 taxmann.com 69 (Kerala)( 2015) has differed from the view of the Calcutta High Court. 7. Per contra, the Ld. DR relied on the orders of the AO and the CIT(A). 8. We have heard the rival submissions and perused the material available on record. We find that t....
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....payments proportionately by invoking the provisions of section 40(a)(ia) of the Act. The Ld. CIT, DR also argued that there is no word like failure used in section 40(a)(ia) of the Act and it referred to only non-deduction of tax and disallowance of such payments. According to him, it does not refer to genuineness of the payment or otherwise but addition u/s. 40(a)(ia) can be made even though payments are genuine but tax is not deducted as required u/s.40(a)(ia) of the Act. We are of the view that the conditions laid down u/s.40(a)(ia) of the Act for making addition is that tax is deductible at source and such tax has not been deducted. If both the conditions are satisfied then such payment can be disallowed u/s. 40(a)(ia) of the Act but where tax is deducted by the assessee, even under bona fide wrong impression, under wrong provisions of TDS, the provisions of section 40(a)(ia) of the Act cannot be invoked. Here in the present case before us, the assessee has deducted tax u/s. 194C(2) of the Act and not u/s. 194I of the Act and there is no allegation that this TDS is not deposited with the Government account. We are of the view that the provisions of section 40(a)(ia) of the Act ....
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....hich have been duly explained before the CIT(A) by providing additional evidences on the discrepancies pointed out by the AO. It is also the say of the ld AR that no formal show cause notice was given for applying the profit ratio of the preceding years. 12. With respect to fall in the net profit ratio in the impugned year, the ld AR further explained that the company is engaged into two types of activity: one is Event Management and second is Manpower supply activity. The profit margin is high in the Event Management activity whereas the profit margin in the manpower supply activity is low. The ld AR explained the reason for low profit in the instant year on account of change in business arrangement with RIM India Private Limited (BlackBerry), the assessee's main client. It is stated that earlier in financial year 2009-10 and 2010-11, the business arrangement with RIM was such that profit ratio was as high as 17.52% to 30.27%. With effect from 1.3.2011 there was a new arrangement which drastically reduced the profit margin to -1.64% as in the new arrangement the assessee was provided salary for the employees with a mark-up. The assessee was further fastened with the liability o....