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2017 (12) TMI 1708 - AT - Income TaxAddition u/s 40(a)(ia) - TDS was not deposited with the statutory period, the expenditure so claimed was voluntarily added back in the computation of income as not allowable under section 40(a)(ia) - HELD THAT:- Where in respect of any sum, tax has been deducted in any subsequent year, such sum shall be allowed as deduction in computing the income of the previous year in which such tax has been paid. In such circumstances, the conclusion of CIT(A) to hold that since genuineness of expenditure stood examined in assessment year 2005-06 and tax was duly deducted in assessment year 2006-07, therefore, the disallowance made in the impugned order of assessment was on account of non-genuineness of expenditure was not tenable. We also find that CIT DR has though extensively relied on enquiries conducted by learned AO but has failed to controvert the factual findings recorded by learned CIT (A), and the status of directions to the revenue authorities to take appropriate action as per law for AY 2005-06 and bring to tax the above expenditure as non genuine in AY 2005-06. As relying on SIR KIKABHAI PREMCHAND VERSUS COMMISSIONER OF INCOME-TAX (CENTRAL) , BOMBAY [1953 (10) TMI 5 - SUPREME COURT] we uphold the deletion of addition Addition on account of discrepancy in the books of accounts of the assessee company - HELD THAT:- The fact of the matter remains that ₹ 2,00,00,000/- was explained by the assessee having been paid by debiting account of the group company and such payments have been made through banking channels. The revenue has not been able to place any material to rebut the aforesaid cogent explanation tendered in the appellate proceedings. No opportunity was granted in the assessment proceedings. We also notice that identical addition had been made in the order of assessment dated 31.12.2010 u/s 153A/143(3) of the Act in pursuance to search conducted on 5.11.2009 under section 132(1). The said addition stood deleted in an order passed by CIT(A) though the revenue has preferred an appeal but such deletion of addition has not been challenged before us which also supports the aforesaid claim of the assessee company. Having regard to the aforesaid factual position, we uphold the deletion of addition Addition being an expenditure incurred on payments to SCLL as compensation by the assessee company - statement of Shri S.K Gupta, Director SCLL recorded in which Shri Gupta and reportedly stated that SCLL was involved in giving bogus entries, that the impugned transaction with Puri Construction Ltd. was not a genuine transaction - HELD THAT:- The addition so made solely on the basis of statement of Sh. S.K. Gupta’s statement and without rebutting the documentary evidences so relied on by the assessee company is hereby deleted - The material available on record that the statement of arbitrator, Sh. Om Prakash, retired Additional & Sessions Judge, who acted as an arbitrator between assessee company and M/s SCLL wherein, the learned judge had accepted regarding the award so granted between dispute pending between assessee and M/s SCLL and the said fact has not been rebutted by the learned counsel of Revenue and as such, this fact is also important to establish and substantiate the fact that the amount so paid to M/s SCLL is genuine and justified. Addition on account of land development expense paid to M/s Manami Construction Pvt. Ltd. - HELD THAT:- Documentary evidences were arbitrarily brushed aside by both learned AO and CIT (A) and further, the reliance so placed on investigation carried out by learned AO was prior to the date of affidavit of director of M/s Manami Construction Co. Pvt. Ltd., wherein, current address of the said concern was furnished by the assessee company and further, all the details in the shape of nature of work done and payment made was also furnished before the learned AO, which all remained unrebutted and uncontested by lower authorities - Thus the disallowance made and sustained is deleted and the ground raised by the appellant is allowed. Assessment u/s 153A - original assessment proceedings under section 143(3) - HELD THAT:- We have noticed that AO in section 153A proceedings has merely repeated the additions so made in original assessment proceedings under section 143(3) of the Act and there was no new addition made by learned AO during section 153A proceedings. Thus, on the date of search i.e. on 05.01.2009, the assessee company’s assessment was finalized on 31.12.2008 and as such, the proceedings were not pending on the date of search and thus, additions could only have been made in proceedings under section 153A of the Act only when any incriminating material was found during the search. The only material (if any) on which reliance is placed by AO is the statement of Sh. Mohinder Puri and construing it to be incriminating in nature is also unjustified, as the statement cannot be construed to be incriminating in nature and more specifically when the said statement has been retracted subsequently and has not been acted upon and as such, the additions so made in an order under section 153A/143(3) of the Act for impugned assessment year are in excess of scope of assessment. Thus, it is held that the additions so made under section 153A of the Act are mere repetition of additions made in assessments already made under section 143(3) of the Act and as such, all the additions so made are beyond the scope of assessment of provisions of section 153A of the Act and thus, the said ground raised in Rule 27 of ITAT Rules by assessee – appellant is allowed.
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