TMI Blog2015 (12) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... that the tax at source has to be deducted on the impugned payments u/s. 194C of the Act which has been conceded by the Ld. Counsel for the assessee as well. The Ld. CIT(A) has relied upon the decision of the Hon’ble Apex Court in the case of Hindustan Coco Cola Pvt. Ltd. [2007 (8) TMI 12 - SUPREME COURT OF INDIA ] wherein it was held that if the recipient has shown this income in its return of income, then such disallowance would amount to double disallowance and accordingly, deleted the said addition. However, there is no evidence placed on record before any of the authorities below, especially before the ld. CIT(A) there is no claim as such that the tax has been paid by the recipient. Therefore, the Ld. CIT(A) is not justified in deleting the said addition. - Decided in favour of revenue. TDS u/s 194C - payment for blasting work - Disallowance u/s. 40(a)(ia) - CIT(A) deleted the addition - Held that:-. A new theory has been developed by the Ld. CIT(A) that blasting work has not been given to any contractor and rather the same has been undertaken by the assessee himself by appointing leaders in each group and making direct payment to the workers by maintaining muster rolls for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same was rendered under the provision of sec.201. (ii) No certificate u/s. 197 was produced before the Assessing officer and, therefore, there is violation of rule 46A(3). 4. The Ld. CIT(A) erred in deleting the addition of ₹ 45,37,820/- made under section 40a(ia) as decision of the Ld. CIT(A) was only based on the submission made by the assessee before her and the same is contrary to the stand taken by the assessee before the Assessing officer. Also, the Ld. CIT(A) ought to have considered following fact while deciding the issue:- (i) The muster roll said to have been produced before the Assessing officer had actually not been produced by the assessee before the Assessing officer and no such argument was raised during the course of assessment proceedings. 5. For these and other grounds that may be urged at the time of hearing, it is requested that the order of the Commissioner of Income tax (Appeals) may be set aside and that of the Assessing officer restored. 3. Ground No. 1 5 are general in nature and do not require adjudication. 4. As regards Ground No. 2, the brief facts of the case as emanating from the order of the Assessing officer at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd earth work leveling are disallowed. The addition so made being expenses not supported by evidence is worked out at ₹ 49,77,024/-. The percentage of profit after including the disallowance will work out to 8.93% which is quite reasonable. 5. The Ld. CIT(A) has deleted the addition made by the Assessing officer and the relevant findings of the Ld. CIT(A) are reproduced herein below for the sake of convenience: 5.3 I have gone through the assessment order and the submissions of the assessee. The assessee has furnished month wise details of earth work, levelling and filling. He has also filed weekly muster rolls duly signed by the labourers and corresponding internal vouchers made for the payments to these labourers. It was accepted by the appellant that the complete names and addresses of such daily labours were not maintained by the assessee, but it submitted that it is not practically possible in engaging labour on a daily basis. Since all these details were maintained and were also furnished during the course of assessment proceedings the assessing officer is not justified in making addition on estimated expenditure on this account. The assessee has further submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers. 8. We have heard the rival contentions and perused the facts of the case. Undisputedly, the facts of the present case are that the expenses, as mentioned hereinabove, with regard to Earth work excavation, Earth work filling and Earth work levelling have been debited in the Profit and Loss Account of the assessee and such expenses have been declared to have been incurred but they are not supported with any of the evidence whatsoever. The month-wise statement furnished before the Ld. CIT(A), in fact, is no evidence for incurring of expenses, as has rightly been argued by the Ld. DR. None of the evidence with regard to incurring of labour expenses have been placed on record before any of the authorities below or even before us. As argued by the Ld. DR, the cash withdrawals from the Bank are not sufficient evidence to prove that the cash withdrawn from the Bank have been used for making labour payments. Therefore, there is every possibility of leakage of the revenue on account of various work done along with labour payments declared by the assessee. Accordingly, the Ld. CIT(A) is not justified in restricting the addition to 1% instead of 10% of expenditure disallowed by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome, then such disallowance would amount to double disallowance and accordingly, deleted the said addition. However, there is no evidence placed on record before any of the authorities below, especially before the ld. CIT(A) there is no claim as such that the tax has been paid by the recipient. Therefore, the Ld. CIT(A) is not justified in deleting the said addition. The Ld. Counsel for the assessee has conceded in the open court that the deletion has been wrongly made by the Ld. CIT(A) and the Revenue s appeal on this ground should be allowed. 12. In the circumstances and facts of the case, as discussed hereinabove, Ground No. 3 of the Revenue is allowed. 13. As regards Ground No. 4, the brief facts of the case as emanating from the order of the Assessing officer at pg. 3 are reproduced herein below for the sake of convenience: 5. Assessee has claimed a sum of ₹ 44,37,820/- under the head Blasting work . The evidence produced by the assessee is six numbers cash voucher books. These vouchers are not numbered. Three of the books shows that the payment was made one Shri George and first book shows the period from 03/04/2008 to 20/08/2008, second book from 21/08/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore even if the payments were made to the labourers through leaders/employees of the assessee, the provisions of section 40(a)(ia) would be applicable. The Assessing officer while making this disallowance has not brought out any defect in the books of accounts or the muster rolls and internal payment vouchers that were maintained by the assessee, as to how they are not valid. The assessing officer has mentioned in the assessment order that six numbers of cash voucher books were produced during the course of assessment proceedings showing payments to different persons which are claimed to be the respective site leaders to whom payments were made by the assessee for further disbursement to the labours employed by them. Since the payments made to the persons is not in the nature of contract payments for carrying out any contract work, therefore the assessing officer is not correct in invoking the provisions of section 40(a)(ia) and accordingly, the addition of ₹ 45,37,820/- made by the assessing officer is hereby deleted. 15. We have heard the rival contentions and perused the facts of the case. The undisputed facts of the present case are that the assessee had p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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