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2019 (6) TMI 35 - AT - Income TaxTDS u/s 194C - non deduction of tds - treating the transaction of sale of goods as part of works contract and thereby invoking the provisions of section 40(a)(ia) - admission of additional evidence - HELD THAT:- The assessee has filed form No. 26A before us for the first time as additional evidence which need verification. In case the payee has included the said income in his return of income and paid the tax due thereon, there will be no disallowance u/s 40(a)(ia) in the case of the assessee. Hence, we admit this issue and direct the AO to verify the same. We find that this issue is squarely covered in favour of the assessee by the decision of Ansal Landmark Township Pvt. Ltd. [2015 (9) TMI 79 - DELHI HIGH COURT] AO will delete this disallowance after verifying the facts. Needles to say, the issue being covered in favour of assessee, we need not adjudicate this issue on merits. Addition on account of revaluation of closing work-in-progress as on 31.03.2009 - AO rejected the method of valuation of the closing stock i.e. closing WIP, regularly followed by the appellant from-year to year - difference in contract receipts as per AIR information and declared in the return of income - HELD THAT:- The assessee has filed the detailed working relating to opening work in progress and subsequent bills raised in respect of opening WIP or closing WIP during the appellant proceedings before CIT(A). We noted that despite assessee’s details filed before AO, the AO could not pointed out any mistake in the books of accounts or any discrepancy and no books of accounts were ever rejected by the AO while applying the profit rate to the work in progress. The assessee is following the method of accounting consistently and it is followed consistently year after year by ascertaining and accumulating the direct cost such as material cost, labour and other identifiable expenses directly relating to a particular ongoing job as on the last day of the accounting year. We also noted that the work in progress followed at cost + net profit so as to bring the contract revenue for the period lying with the requirement of accounting standard AS 7 as prescribed by ICAI and adopted by assessee as per section 145 of the Act. In such circumstances, we are of the view that the AO and CIT(A) has wrongly made adhoc addition, which we delete. - Decided in favour of assessee Penalty u/s 27(1)(c) - addition made by AO on work in progress on adhoc basis - HELD THAT:- It is to be mentioned that we have already deleted the addition of work in progress while deciding the quantum appeal of the assessee. Hence, this penalty will not survive. This penalty is deleted. - Decided in favour of assessee
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