TMI Blog2012 (7) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... account of rebate and discount - Held that:- Considering the contention of the assessee that such huge discount and rebate would not have been given as the seeing the value of material & CIT(A) has given a finding that M/S Aggrawal Enterprises has not recorded the correct transaction in his books of accounts. The Revenue has not brought any material to rebut the finding of CIT(A) - in favour of assessee. Disallowance on breach of sec.40(a)(ia) - non-deduction of TDS on transportation charges - Held that:- The sum credited or paid or likely to be paid are credited to the account of the contractor or the contractor if such sum exceed 20,000/- tax is deductible in terms of Section 194C(5) - Since the aggregate amount paid exceeds the limit prescribed under Section 194C(5) of the Act, therefore, first argument of the assessee is not acceptable - the opening line of Section 194(C)(1) makes it clear that the assessee was liable to deduct tax since it reads any person responsible for paying any sum to any resident. In this case admittedly the assessee was responsible for paying sum to the transporter - against assessee. - I.T.A. No.226/Ahd/2009 - - - Dated:- 6-7-2012 - Shri A.K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deletion of addition made on account of work in progress. 4. Ld. Departmental Representative vehemently argued that the order of ld. CIT(A) is erroneous. He strongly supported the order of the Assessing Officer. On the contrary Ld. Authorised Representative supported the order of Ld. CIT(A) and submitted that the assessee has been following the same method from the inception. He submitted that work in process is not shown in the books of accounts and this practice was being followed. It is submitted that if the work in progress is recorded as on 31.03.2005, the assessee should get benefit of the same in the next financial year i.e. on 01.04.2006. It is the submission that while calculating work in process, the Assessing Officer ought to have considered the opening stock work in progress also. The Assessing Officer did not consider the work in process in opening stock. Ld. Authorised Representative submitted that the Assessing Officer has wrongly applied the decision of Hon ble Supreme Court in the case of CIT Vs. British Paint India Ltd. reported in 188 ITR 44 (SC). Ld. Authorised Representative relied upon the judgment of Hon ble High Court of Delhi in the case of CIT Vs. Maha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble High Court of Delhi in the case of Mahavir Aluminium (supra) wherein it has been held that whenever any adjustment is made in the valuation of stock, this will affect both; opening as well as closing stock. It is evident that Assessing Officer has not taken into account working of the opening stock of work in progress, therefore, we do not find any merit into this ground of appeal of the Revenue. This ground of appeal of the Revenue is hereby rejected. 7. Ground No.2 and 3 are interconnected hence are being taken together. 8. Next ground is with regard to deletion of addition of Rs.4,45,327/- made by the Assessing Officer on account of bogus purchases. Ld. Departmental Representative strongly relied upon the order of the Assessing Officer. He submitted that from the confirmation of account from M/s Agrawal Enterprises it was noticed that there was total purchases of Rs.12,14,042/- only and there was a difference of Rs.4,45,327/- in the account of M/s Agrawal Enterprises and the ledger of M/s Agrawal Enterprises submitted by the assessee before the Assessing Officer wherein the assessee has shown total purchase of Rs.16,59,369/-. He submitted that the Assessing Officer ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aling to Rs.5,55,452/- will therefore, stand deleted. It is pertinent to note that this however will not prevent the AO to inform the Assessing Officer of the supplier party about these findings so that the issue can be examined for ascertaining the tax implication at the suppliers end. Primafacie it seems that Ms Agarwal Enterprise has not shown these sales to the appellant, in their books of accounts. 10. Ld. Authorised Representative strongly supported the order of Ld. CIT(A). He submitted that it is categorically recorded by Ld. CIT(A) that theassessee had submitted copy of the delivery chalan and weighing slips etc. evidencing that the asessee had in fact made purchases from M/s Agrawal Enterprises. He submitted that for the lapse on the part of M/s Agrawal Enterprises, the assessee cannot be made to suffer. The assessee has furnished the evidence in support of its claim of the purchases, therefore, its purchases cannot be termed as bogus merely on the basis that such purchases were not recorded by the seller in his books of accounts. So far rebate and discount are concerned, the assessee had never received rebate and discount and such rebate and discount who will give wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts of M/s Agrawal Enterprises, the contention of the assessee is that such huge discount and rebate would not have been given as the seeing the value of material. Moreover, CIT(A) has given a finding that M/S Aggrawal Enterprises has not recorded the correct transaction in his books of accounts. The Revenue has not brought any material to rebut the finding of Ld. CIT(A) This contention of the assessee is acceptable on the basis that in the normal practice nobody would give such a huge rebate. This ground of the Revenue s appeal is dismissed. 13. In the result, the appeal of Revenue is dismissed. Now we take up the cross-objection of the assessee. 14. The assessee has raised following ground of cross-objection:- The CIT(Appeals) erred in upholding the disallowance of Rs.2,64,101/- though there was no breach of sec.40(a)(ia). 15. The only issue for determination is whether the assessee is liable to deduct tax u/s 194(C) of the Act. The contention of Ld. Authorised Representative is that since no payment was in excess of Rs.20,000/- therefore, the assessee was not liable to deduct tax Ld. A.R. submitted that authorities failed to appreciate the fact that there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asta, Jhagadia, Dist: Bharuch 393110 was paid Rs. 1,07,721/- as transport charges and also assessed to income-tax bearing P. A/c. AEUPP-7806-H. The total of 2 transport agencies comes to Rs. 2,64,101/- (Rs.1,24,414+1,07,721). The total addition of Rs. 2,64,101/- was made, out of this Rs. 2,32,135 as stated above explained and hence the difference of Rs. 31,966/- (Rs. 2,64,101-2,32,135)j, Which is below Rs. 50,000/- and hence not required to deduct tax. The addition of the sum of Rs. 2,64,101/- has therefore, been sought to be deleted. I have gone though the rival contentions and applied my mind to the issue. I see no merit in the appellant s argument who has tried to complicate the issue and stretched a simple logic too far. The crux of the matter is that the total payment on which tax was to be deducted is Rs. 264101. This has not been done and therefore the same has been justifiably disallowed as per provisions of section 40 (a)(ia) of the Act. I do not therefore see any infirmity in the AO s action and the same is upheld. 18. We have given one thoughtful consideration to rival submissions of the parties. Section 194 C(1) of the Act mandates deduction of Tax by a person wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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