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2015 (12) TMI 507 - AT - Income TaxDisallowance of expenses - @ 1% of total expenses by CIT(A) instead of 10% made on account of inflation of expenses relating to earth work, excavation, filling and leveling by AO - Held that:- there is every possibility of leakage of the revenue on account of various work done along with labour payments declared by the assessee. Accordingly, the Ld. CIT(A) is not justified in restricting the addition to 1% instead of 10% of expenditure disallowed by the Assessing officer which in fact is without any basis. Though no past trends have been placed on record, however, in the circumstances and facts of the present case, the disallowance of 1% of expenses made by the Ld. CIT(A) is very much on the lower side and therefore, we restrict the disallowance on account of various expenses, as mentioned hereinabove, to 8% instead of 10% disallowed by the Assessing officer, to meet both the ends of justice - Decided partly in favour of revenue. TDS u/s 194C - Disallowance u/s. 40(a)(ia) - CIT(A) deleted the addition - Held that:- The undisputed facts in the present case are that the tax at source has to be deducted on the impugned payments u/s. 194C of the Act which has been conceded by the Ld. Counsel for the assessee as well. The Ld. CIT(A) has relied upon the decision of the Hon’ble Apex Court in the case of Hindustan Coco Cola Pvt. Ltd. [2007 (8) TMI 12 - SUPREME COURT OF INDIA ] wherein it was held that if the recipient has shown this income in its return of income, then such disallowance would amount to double disallowance and accordingly, deleted the said addition. However, there is no evidence placed on record before any of the authorities below, especially before the ld. CIT(A) there is no claim as such that the tax has been paid by the recipient. Therefore, the Ld. CIT(A) is not justified in deleting the said addition. - Decided in favour of revenue. TDS u/s 194C - payment for blasting work - Disallowance u/s. 40(a)(ia) - CIT(A) deleted the addition - Held that:-. A new theory has been developed by the Ld. CIT(A) that blasting work has not been given to any contractor and rather the same has been undertaken by the assessee himself by appointing leaders in each group and making direct payment to the workers by maintaining muster rolls for each site and assessee has maintained cash payment vouchers to each person for such work. No such evidence was placed before the Assessing officer or even before us by the Ld. Counsel for the assessee to prove that the assessee has made payments directly to the labourers in cash. In such circumstances and facts of the case, the Ld. CIT(A) is not justified in deleting the addition and holding that it is not a contract payment. Accordingly, the order of the Assessing Officer is restored who has rightly considered the said payments to three different persons as contract payments where tax should have been deducted under the provisions of section 194C of the Act which, in fact, has not been deducted by the assessee under the head blasting work and therefore, the disallowance made under the provisions of section 40(a)(ia) is directly applicable. - Decided in favour of revenue.
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