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2016 (6) TMI 38 - AT - Income TaxRevision u/s 263 - non deduction of tds on payment to contractor for supply of labour and transportation - Held that:- There is no error in the order of the AO causing prejudice to the Revenue. The assessee had duly demonstrated before the Ld. CIT, that it was not required to deduct TDS on the impugned payments. The assessee has stated before the Ld. CIT that no payment was made for supply of labour & transportation, in pursuance to any contract for the supply of the same. In fact, the assessee had explained, that the so called contractors used to only facilitate payments to various temporary unskilled labour employed by the assessee. The modus operandi was explained as being that entire payment relating to a group of labourers being made to one so-called contractor, who in turn distributed it to the individual labourers. The assessee had demonstrated the same through monthly wage sheets of various labours. The assessee had also stated that it had not paid any commission to these so-called contractors. Further the assessee demonstrated before the Ld. CIT that no payment to a single labour exceeded ₹ 20,000/- i.e., the prescribed limit for deducting tax at source. The Ld. CIT we find has not controverted all these facts. In fact the entire case of the Ld. CIT rests on the submission of the assessee in which he has termed these persons as “Contractor” This alone cannot lead to the conclusion that the payments were made to contractor, without controverting the evidences produced by the assessee in support of its contention. In view of the same, we hold that the impugned payments are not liable to be tds deduction. - Decided in favour of assessee Claim of 100% depreciation on temporary structures of office - CIT held that the assessee had claimed double deduction since no bills and vouchers in support of this expenditure had been furnished by the assessee on this aspect - Held that:- We find that this issue had been investigated during assessment proceedings and the AO after considering the assessee reply, had taken a plausible view and allowed the assessee 100% depreciation on the temporary structure. Moreover the case of the Ld. CIT we find is that in the absence of bills and vouchers pertaining to the impugned expenses, the assessee has claimed double deduction. We fail to understand how the assessee has claimed double deduction when the fact is that the impugned amount was debited to capital account and 100% depreciation claimed thereon.- Decided in favour of assessee Bogus purchases - Held that:- We find that during assessment proceedings, the issue of purchases was considered by the AO and a lump sum addition of ₹ 12 lacs on account of unverified purchases was made. Having done so, we find that the Ld. CIT intends to revisit this very issue in the current proceedings and that too for verifying the genuineness of the impugned purchases. Meaning thereby that there is no categorical finding of any error in the order of the AO. In our considered opinion, revisionary powers under section 263 cannot be exercised in such circumstances. Moreover, the fact that two supplies are presumably defaulters being not registered under the relevant law, does not lead to any adverse inference being drawn against the assessee, more particularly when no defect has been found in the bills and vouchers produced by the assessee. Further we find that in the assessment order passed in consequence to the order passed under section 263, no addition on this issue has been made - Decided in favour of assessee Purchase made on 31/03/2008 but not shown as work in progress - Held that:- We find that no addition on this account has been made in the assessment order passed in consequence to the order passed under section 263. Any adjudication on this issue is of no consequence and it remains only academic in nature.- Decided in favour of assessee Interest not found to have been included in the income of the assessee - Held that:- We uphold the order of the Ld. CIT, since clearly there was an error in the order of the AO, having not examined the issue of taxability of interest, which resulted in an amount of ₹ 36,287/- escaping assessment thus causing prejudice to the Revenue. The assesssee we find has given no plausible explanation for not disclosing the impugned amount in its Profit & Loss account.- Decided against assessee Disallowance of rent paid for equipment and legal expenses - non deduction of tds - Held that:- Undeniably the issue of tax deduction at source on legal expenses & Rent was not examined during assessment proceedings. Even before the Ld. CIT the assessee though furnished an explanation for not deducting tax at source but failed to substantiate the same with copies of ledger accounts , bills and voucher. In view of the same we hold that the assessee has not been able to establish categorically before the Ld. CIT that it was not required to deduct tax at source in the payments of rent and legal expenses and the same having not been examined during assessment proceedings also, the Ld. CIT had rightly held the order of the AO to be erroneous so as to cause prejudice to the Revenue.- Decided against assessee
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