TMI Blog2014 (8) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of deduction of TDS throughout Mumbai for the amounts paid by the member to the society towards the monthly/ quarterly chares in respect of the office premises or even residential premises - there is no contract between the society and the assessee as there is a pure relation of member of the society – the assessee was not liable to deduct TDS as per section 194C – the society to whom the payment had been made was having no taxable income – Decided against Revenue. Expenses on replacement of asset – Held that:- Assessee has rightly submitted that AO has taken a contradictory stand - On one hand he disallowed the entire expenditure on the ground that no TDS was made u/s 194C and on the other he treated the entire expenditure in the capital field and allowed the depreciation - the finding of CIT(A) regarding TDS made by assessee u/s 194C has not been controverted, therefore, no disallowance was called for u/s 40(a)(ia) - As far as the claim of expenditure is concerned, the main panel was replaced after a gap of 15 years and the entire expenditure was incurred at the business premises which was evident from the copy of I.T. return filed by the assessee – Decided against Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat norms overrule Income Tax Act Provision on the issue of non deduction of tax on payment of ₹ 1,37,794/- made by the assessee firm to Kokad Chambers of Commerce, Mumbai for office space. 3. Whether the ld. CIT(A) was correct in treating as expenditure of ₹ 6,26,400/- on account of replacement of asset i.e. supply, erection, testing and commissioning of 'main panel' AC supply, as revenue in nature. 4. Whether the ld. CIT(A) was correct in ignoring the clear narration on bills of expenditure and holding expenditure of ₹ 83,131, ₹ 73,967, ₹ 2600 ₹ 2,28,306/- as incurred for professional activities as against personal expenditure for residence as held by the AO. 3. Brief facts, apropos ground no. 1, are that assessing officer required the assessee to reply whether TDS had been made, inter alia, on payments made to X Press Computer Ltd. The assessee pointed out that no TDS was deducted u/s 194C as the gross amount was less than ₹ 50,000/- in number of contracts. Assessing officer, however, observed as under: The following payments have been made by the assessee as per ledger account under the head 'Repai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee did not respond to two notices issued by the assessing officer. Therefore, the assessing officer concluded that payment had been made to Kakad Chamber of Commerce, Mumbai in violation of section 194C and therefore he disallowed ₹ 1,39,794/- observing as under: The following payments have been made by the assessee as per ledger account under the head 'Repair maintenance':- Sr. No. Payment made to Party Date of payment (Rs.) Expenses TDS 1 Kakad Chamber of Commerce, Mumbai 01-05-2007 30219 194C 2 Kakad Chamber of Commerce, Mumbai 01-08-2007 30219 194C 3 Kakad Chamber of Commerce, Mumbai 01-11-2007 39678 194C 4 194C -01-2008 39678 194C Total 1,39,794 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esting and commissioning of TPN cubicle type Main Panel for 415V 3-phase 4 wire 50 Hz AC supply with all cables. He noted that no TDS had been made on this payment which was required because this payment was within the ambit of technical services and contractual services. Thus, there was violation of section 194C/ 194J calling for disallowance u/s 40(a)(ia). He pointed out that this was in the capital field as the said installation of AC supply electrical equipment provided enduring benefit to th4e assessee. He, therefore, allowed depreciation of ₹ 59,600/- @ 10% of electrical fittings and made a disallowance of ₹ 6,26,400/-. 5.1. Before ld. CIT(A) it was pointed out that an amount of ₹ 14,338/- had been deducted u/s 194C of the I.T. Act on the total payment of ₹ 6,96,000/- @ 2.06%. It was further pointed out that before assessing officer the assessee had placed on record form no. 16A to prove that the TDS was deducted against this expenditure. Therefore, assessing officer erred in disallowing the impugned amount u/s 40(a)(ia). It was further submitted that assessing officer contradicted his own stand by taking this expenditure both as revenue expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contradictory stand. On one hand he disallowed the entire expenditure on the ground that no TDS was made u/s 194C and on the other he treated the entire expenditure in the capital field and allowed the depreciation. Since the finding of ld. CIT(A) regarding TDS of ₹ 14,338/- made by assessee u/s 194C has not been controverted, therefore, no disallowance was called for u/s 40(a)(ia). As far as the claim of expenditure is concerned, it is not disputed that the main panel was replaced after a gap of 15 years and the entire expenditure was incurred at the business premises which was evident from the copy of I.T. return filed by the assessee. Under these circumstances, we do not find any reason to interfere with the order of ld. CIT(A). Ground is dismissed. 6. Brief facts, apropos ground no. 4 are that assessing officer noted that two bills of M/s Level one of ₹ 60,681/- and ₹ 22,450/- related to electrical installation. He noted that the narration in the bill was as under: Bill for electrical installation work at Mr. V. Shridharan's residence at B-6/13, Safdarjang Enclave, New Delhi. 6.1. The assessing officer pointed out that the office is at basem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for business purpose. Therefore, this could not be disallowed as personal expenditure. 6.4. As regards sum of ₹ 2600/- paid to M/s K.L. Sharma Sons for repairing floor spring door/ rack shelf at B4/158, Safdarjung Enclave, New Delhi, it was pointed out that in the income-tax return it was clearly disclosed that property at B4/158 continued to be used for business purpose and hence question of disallowance did not arise. 6.5. As regards the payment of ₹ 2,28,306/- made to M/s K.V. Construction Co. towards maintenance work at B4/158 and B6/13, Safdarjung Enclave, New Delhi, the assessee pointed out that both these premises were being used for business purposes only and, therefore, the payment of ₹ 2,11,494/- (not ₹ 2,28,306/-) could not be disallowed. Ld. CIT(A) disallowed the disallowance. 6.6. We have considered rival submissions and have perused the record of the case. From the submissions made before ld. CIT(A), which have not been controverted by the department and which were duly supported by the extract of income-tax returns filed before the department, it is evident that Shri V. Shridharan was residing at Mumbai and the properties located ..... X X X X Extracts X X X X X X X X Extracts X X X X
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