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TMI Blog2012 (10) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of appeal is rejected. 3. Ground No. 2 relates to disallowance of sum of Rs. 14,17,559/- out of Rs. 15,80,826/- made by the AO u/s. 40(a)(ia) of the Act. 4. The assessee is engaged in the business of mechanical, erection, fabrication contractors carrying out contract works all over India. During the course of assessment proceedings, the Assessing Officer found that the assessee has made various payments on account of labour charges, hire charges and sub-contract but has failed to deduct tax as required u/s. 194. The AO was of the opinion that the assessee has violated the provisions of Sec. 194 r.w.s. 40a(ia) and accordingly went on to disallow Rs. 15,80,826/-. 5. Before the Ld. CIT(A), the assessee submitted the details regarding pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of lower authorites. 8. We have heard the rival submissions and perused the orders of lower authorities. Perusal of the assessment order show that the AO has made the additions on presumption that all the payments are made to sub-contractors without seeking any information/explanation/verification from the assessee. We also find that the Ld. CIT(A) also fell into the same error while disposing of the grievance of the assessee. This issue needs further verification at the assessment stage. Therefore, in the interest of justice, we deem it fit to restore this issue to the file of the AO. The AO is directed to verify whether all the payments made are to sub-contractors or otherwise after giving a reasonable and sufficient opportun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot substantiated claim of payment of labour charges. We do not find any reason to interfere with the findings of Ld. CIT(A). This ground of the assessee is accordingly dismissed. 15. Ground No. 4 relates to disallowance of expenses to the tune of Rs. 2,70,000/- under various heads of expenses. The AO has made an adhoc disallowances from the expenses claimed under the head site expenses, wages, vehicle expenses, transport expenses, travelling expenses, staff welfare, medical expenses, telephone expenses and depreciation on vehicle. 16. When the matter was agitated before the Ld. CIT(A), the CIT(A) observed that major portion of the expenses claimed under the above heads mentioned were incurred in cash with self made vouchers. However, cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itional ground is concerned, all the facts are available on the record and no further investigation of the facts is required. The Ld. Counsel further pointed out that it is a settled position of law that the Tribunal has the power to consider question of law and the issues emanating from the assessment proceedings although not raised earlier. Considering the facts of the case and the facts involved in the additional ground of appeal, we admit the said additional ground for disposal. We also find that the said ground was raised before the Ld. CIT(A) also. 21. During the course of assessment proceedings, the AO found that the assessee has shown various creditors and was specifically asked to furnish evidences in respect of KLB Fabricators - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the AO. 24. Before us, the Ld. Counsel reiterated what has been stated before the lower authorities. The main contention of the Counsel was that all these liabilities have been written back in assessment year 2009-2010. The Ld. DR supported the finding of lower authorities. 25. We have considered the rival submissions. On going through the submissions made by the assessee before the AO, we find that the assessee herself has admitted that the bills of KLB Fabricators and S.D.S Fabricators are over invoiced which itself prove that the assessee is not going to pay this amount. So far as liability of P&R Industries and PMB Engineering are concerned, the assessee has categorically stated that the companies have closed. Just because th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we find that the additions was confirmed by the Ld. CIT(A). Thereafter the assessee moved an application u/s. 154 of the Act seeking rectification of the appellate order dt. 18.2.2010. The Ld. CIT(A) while adjudicating on the application made u/s. 154 of the Act was carried away by the submissions of the assessee without appreciating the fact that what assessee has stated during the course of the appellate proceedings was only a promise to consider the write back of liabilities in A.Y. 2009-2010. Without appreciating the fact, the Ld. CIT(A) passed rectification order and allowed the rectification petition filed by the assessee. 29. We have considered the submissions and finding of the Ld. CIT(A). We failed to understand how the future ..... X X X X Extracts X X X X X X X X Extracts X X X X
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