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TMI Blog2013 (6) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... "4. The brief facts of the case are that the return declaring loss of Rs.2,28,11,114/- was filed by the assessee on 25.10.2005, which was processed u/s 143(1) of the Act on 12.01.2006. The return was accompanied by balance sheet and tax audit report etc. Later on, the case was selected in scrutiny and a notice u/s 143(2) of the Act was issued on 26.10.2006 and served upon the assessee. The assessee company is engaged in the business of manufacturing of detergent powder, detergent cake and bartan bar etc. The assessee did not carry out manufacturing activity during the eyar at its own but got the soaps and detergents etc. manufactured from Lakhani Shoe Co.Pvt.Ltd. on job work basis @ Rs.1/- per kg. During the course of assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation on these assets was not allowable. Accordingly, the sum of Rs.1,15,866/- has been disallowed. Besides, out of various expenses claimed, the disallowance of Rs.49,77,476/- has been made on adhoc basis at varying percentage of different expenses." 3. The assessee carried the matter before the First Appellate Authority which granted part relief. Aggrieved with the relief granted by the Ld.CIT(A), the Revenue filed appeal before us on the following grounds. "1. On the facts and circumstances of the case, the Ld.CIT(A) has erred, both on facts and in law, in deleting the disallowance of a sum of Rs.23,72,357/- made u/s 36(1)(iii) on account of job work charges non incidental to and not incurred for the business of the assessee. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's contention is that the total credits were Rs.1,25,43,336/- being job charges of Rs.46.35 lakhs and excise duty payments made by Lakhani Shoe Co.P.Ltd. for and on behalf of the assessee amounting to Rs.79.07 lakhs. The Ld.CIT(A) after considering the grounds of disallowance as at page 7 observed as follows:- "It is further seen that while making the disallowances out of various expenses as discussed in para 10 of the order, the AO has allowed the expenditure of Rs.1,12,31,407/- on account of excise duty. It is thus, apparent that the AO, instead of examining the details as per copy of account filed before him, has misled himself by observing that the transactions were not incidental to the business. The stand taken by the AO in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee has credited job work charges on 31.3.2005. These remained outstanding as on that date. The assessee deducted tax at source and remitted the same to the government on 27.5.2005 i.e. before 31.5.2005. The AO was of the view that the payment to the government has to be made on or before 7th April,2005 and as the payment has been made on 27.5.2005, the disallowance u/s 40A(ia) is attracted. 9.1. As per the provisions of Rule 30(1)(b)(i)(a) of the Income Tax Rules, 1862, the tax deducted at source in question is required to be paid within two months from the last day of the Accounting year i.e. on or before 31.5.2005. Thus in our considered opinion the remittance was within time. Hence we uphold the findings of the Ld.CIT(A) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; Rs.49,77,47 6/- (ADD: Rs.49,77,476/-) I am satisfied that the assessee has furnished inaccurate particulars of its income within the meaning of s.271(1)(c ), and therefore penalty proceedings u/s 271(1)(c ) are initiated separately." 10.1. The Ld.CIT(A) at para 6.4 held as follows. "The disallowance of Rs.49,77,476/- made by the AO out of various expenses has been contested in ground no.4 of appeal. The AO has mainly assigned the reasons that the appellant, being engaged in the production of excisable goods, was required to maintain various excise records. In absence of raw material inwards and consumable inwards, the expenses on manufacturing were not verifiable. Besides, the appellant also did not produce wages register etc. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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