Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (10) TMI 791 - AT - Income TaxTDS u/s 194C - disallowance of labour charges and earth work charges for non deduction of tds - addition u/s 40a(ia) - Held that:- It is not in dispute that the assessee is engaged in road contract works in the remote parts of various villages. Obviously, for this purpose the assessee had to engage labourers from the nearby villages in view of the fact that there was no proper path way for rural work site. What assessee has actually done in the instant case is engaging various labourers for work at its site and for which payments are made to one labourer (labour heads) with a clear direction to distribute the same to various labourers either on daily or weekly basis , as the case may be. The assessee in the instant case had not engaged any labour contractor or any sub-contractor for making payment of labour charges and earth work charges. In this scenario, the provisions of section 194C cannot be made applicable in the facts and circumstances of the case. Accordingly, the ld. CIT(A) had rightly deleted the disallowance u/s 40a(ia) - Decided in favour of assessee. Disallowance u/s 40A(3) - payments made in cash - proof of business expediency/ business compulsions - Held that:- There is no dispute that the banking facilities are not available in some parts of these villages. The assessee had stated that the raw materials supplier insisted for making payments in cash in view of the fact that their residence are situated in the remotest villages where there are no banking facilities. Hence the assessee had to necessarily make payments only in cash out of business expediency/ business compulsions so as to ensure smooth supply of raw materials from the said supplier for the purpose of its road contract works in order to avoid any delay in execution of the said work allotted to the assessee by the Government and local authorities. There is no dispute that the payments were made on Sundays, public holidays etc by the assessee. None of the aforesaid findings given by CIT(A) have been controverted by the revenue before us. Hence we do not find any infirmity in the order of the Ld. CIT(A) by granting relief to the assessee - Decided in favour of assessee. Ad hoc addition towards work-in-progress - Held that:- The entire books of accounts together with requisite details with supporting evidences were duly submitted by the assessee before the ld. AO which is not disputed by the ld. AO. We find that no defects were pointed out by the ld. AO in the said accounts or in the vouchers and evidences submitted by the assessee. Without rejecting the books of accounts, the ld. AO cannot resort to make any addition on an estimated basis. We find that the assessee has not been showing opening stock of work-in-progress and closing stock of work-in-progress in its books of accounts for the past many years and this system of accounting has been accepted in the past by the revenue. In any case, the addition was made only on an estimation which cannot survive - Decided in favour of assessee.
|