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TMI Blog2013 (6) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 40(a)(ia) would be applicable in a case only where the expenditure is outstanding for payment and would not be applicable in a case where the expenditure has already been paid by the assessee. For this proposition the Commissioner of Income-tax(Appeals) relied on the order of the Income-tax Appellate Tribunal, Jodhpur Bench, in the case of M/s. Jaipur Vidut Vitran Nigam Ltd. vs. DCIT, 123 TTJ 888 and the decision of the Hyderabad Bench of the Tribunal in the case of K.Srinivas Naidu vs. ACIT, 131 TTJ 17 and also the decision of the Tribunal, Jodhpur Bench in the case of G.F.Securities vs. DCIT in ITA No.1215 of 2010 dated 26-5-2010. 4. After hearing both sides in detail, we examined this issue of disallowance made under section 40(a)(ia). At that point of time when the order was passed by the Commissioner of Income-tax(Appeals), true, decisions of various Benches of the Tribunal supported the view adopted by him. This view has thereafter been reconfirmed by the Special Bench of the Incometax Appellate Tribunal, Visakhapatnam in the case of Merilyn Shipping and Transports vs Addl.CIT, 16 ITR(Trib.) 1. But, thereafter the Honble Gujarat High Court as well as the Hon'ble Kolkata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with the relevant quantum. The case in respect of payment towards commission is not hit by TDS provisions. In this case and in respect of other payments another issue to be looked into is whether these payments are contractual payments or instant/adhoc payments against various services obtained. As no details are available on record, the issue of disallowance under section 40(a)(ia) is remitted back to the Assessing Officer for considering the issue afresh in the light of the relevant decisions. Wherever the payments were made without deducting any tax, where TDS is liable, then ofcourse the Assessing Officer shall invoke the provisions of section 40(a)(ia). But, in cases even if no TDS was made if the payments do not come within the purview of TDS, no disallowance can be made. Likewise, in the case of shortfall in deduction, again there cannot be any disallowance. Accordingly, this issue is remitted back to the Assessing Officer for reconsideration and deciding the issue in accordance with law. 8. The first issue raised by the Revenue is decided partly in its favour. 9. The second issue raised by the Revenue is that the Commissioner of Income-tax(Appeals) has erred in deleting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d perused the orders of the lower authorities and the records of the case. We have to accept the fact that the assessee has maintained proper books of accounts. It is also true that the accounts are produced before the Assessing Officer. The assessee had produced the vouchers also, in support of the claim of expenditure made by it. The Assessing Officer has made a test check of the vouchers. That is one of the accepted methods of audit procedure. In high volume of business, where thousands and thousands of vouchers are produced by an assessee, it is not possible for an Assessing Officer to verify all the vouchers one by one. In such cases it is enough if he makes a random check/test check. In the present case such a check has been made and, therefore, it is not possible to pass an adverse comment against the books of accounts and vouchers and evidences available with the assessee. 12. Now, regarding the nature of the vouchers, there is an allegation that in many of the vouchers the addresses of the payees are not readily available. The particulars like the date of payment, the work for which the payment was made, the amount paid, the name of the payee, etc. are all available. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue is liable to be dismissed. 14. The appeal filed by the Revenue in ITA No.1097(Mds)/2011 is partly successful. 15. Next we will consider the appeal filed by the assessee in ITA No.915(Mds)/2011. 16. The assessee has raised two grounds, the first one is that the Commissioner of Income-tax(Appeals) has erred in confirming the disallowance of Rs. 22,56,596/- under section 40A(3) of the Act and the second one is that the Commissioner of Income-tax(Appeals) has erred in holding that the levy of interest under sections 234B and 234C is only consequential. 17. During the assessment proceedings, the Assessing Officer has noticed that the assessee has made a total payment of Rs. 2,62,65,180/- in cash towards purchase of land, out of which Rs. 1,49,82,200/- was related to registration and stamp expenses and the balance of Rs. 1,12,82,980/- was related to payment to land owners. As far as the payment of Rs. 1,49,82,200/- towards stamp paper charges and registration fees paid to the Government account was concerned, the contention of the assessee was that it was outside the purview of disallowance under section 40A(3). This was accepted by the Assessing Officer. In respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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