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TMI Blog2013 (8) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... se was earlier heard on 4th July, 2013 but was re-fixed on 22.07.2013 to seek certain clarification and was fixed for hearing on 06.08.2013 on which date the case was heard. 3. The brief facts of the case are that the assessee is a partner ship firm and is an agent of M/s Maruti Udyog Ltd. and its business is sales, servicing and managing a workshop for maintenance of vehicle. The return of income in this case was filed on 31.10.2007 declaring a total income of Rs.16,62,860/-. The case of the assessee was selected for scrutiny. During assessment proceedings, the Assessing Officer observed that assessee had incurred an expenditure of Rs.29,70,172/- and Rs.11,31.388/- under the heads denting and painting expenses and free service charges. Vide questionnaire dated 09.12.2009, the assessee was required to furnish party wise detail of denting and painting expenses and free service charges paid and TDS deducted against such payments. In response to this query the assessee clarified that no TDS was deducted. The assessee was required to justify non deduction of TDS and also was directed to produce complete bills and vouchers pertaining to these expenses. The assessee vide letter dated 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under which section yourgoodself would like to cover the TDS applicability on the expenses booked under the head 'Free Service Charges Paid' as the same has not been mentioned in yougoodself's letter dated 24.12.2009 and this is necessary to know in order to give a complete and comprehensive reply to the same." 4. The Assessing Officer however was not satisfied with the reply filed by assessee and, therefore, he made a disallowance of Rs.29,70,172/- and Rs,11,31,338/- u/s 40(a) (ia) for non deduction of tax at source. 5. Dissatisfied with the order, the assessee filed appeal before the Ld. Commissioner of Income Tax (appeals) and submitted various submissions. The Ld. CIT (A) after going through the submissions and after going through remand report from Assessing Officer deleted both addition by holding as under: "10. The Assessing Officer has concluded that denting and painting services have been done by outside parties, which is without any basis, as the Maruti Dealers are required to maintain proper workshop facilities to cater to the repair and maintenance of vehicles sold by them. The assessee has in house denting and painting facilities for which various raw materials hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 964 relating to payments of daily wagers our attention was invited to paper book page 155 to 161 wherein sample of vouchers pertaining to denting and painting were placed and it was argued that these were not contractual payments and rather payments were made to daily wagers and, therefore, no TDS was attracted. In respect of consumables, it was submitted that these represented small amount of expenditure on various consumables used in denting and painting. In view of the above, it was argued that no TDS was required to be deducted on all these payments. 9. Reliance in this respect was placed in the following case laws: i) 326 ITR 106 (P&H) CIT vs. Assistant Manager (Account) Food Corporation of India. ii) 17DTR 337(Del) CIT vs. Dewan Chand. 10. Regarding free service charges, the Ld. AR submitted that there were three types of expenses relating to free services under the head which related to vehicles directly sold by assessee, vehicle sold by other dealers but free services done by assessee and amount deducted by Maruti Udyog Ltd. for non payment of service charges payable by assessee to other dealers. 11. The Ld. AR relied upon the decision in the case of Hero MotoCorp. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts/ copies. In the absence of original bills and vouchers and the nature of expenses would not be asserted and the payment of addition expenses apparently covered under the provisions of section 194C and 194J of the Income Tax Act." 13. Before Ld. CIT (A) the Ld. AR had submitted that question regarding denting and painting was asked for the first time vide questionnaire dated 24.12.2002 and it was sent through speed post and was received by assessee on 29.12.2009 and thus assessee was left with no time to file comprehensive reply and adjournment was sought. It was further submitted that assessee's letter dated 31.12.2009 was not taken on record, wherein the assessee had furnished comprehensive reply to the Assessing Officer and, therefore, the reply was sent through speed post. Further we find that the submissions before CIT (A) were forwarded to the Assessing Officer and a remand report was obtained. The Assessing Officer in his remand report submitted that additional evidence filed by assessee may not be accepted since the books of accounts and bills and vouchers were not produced during assessment proceedings. However he did not comment upon the merits of the documents. We f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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