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TMI Blog2016 (2) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax Act, 1961. 2. Reasons given by A.O. for confirming disallowance of Rs. 1,58,050/- out of the total disallowance of Rs. 1,58,050/- by applying the provisions of section 40(a)(ia) in respect of commission paid on the alleged ground that the said payment is covered u/s 194H of the Income Tax Act, 1961, are wrong insufficient and contrary to the facts and evidence on record. 3. In the facts and circumstances of the case and in law learned CIT(A) erred in confirming disallowance of Rs. 8,17,741/- made by the A.O. by applying the provisions of section 40(a)(ia) in respect of payment made to the labourer on the alleged ground that the said payment is covered u/s 194C of the Income Tax Act , 1961. 4. Reasons given by CIT(A) for confirming disallowance of Rs. 8,17,741/- made by the A. O. by applying the provisions of section 40(a)(ia) in respect of payment made to the labourers on the alleged ground that the said payment is covered u/s 194C of the II1C9Jne Tax 1961, are wrong insufficient and contrary to the facts and evidence on record. 5. In the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the addition made by the A.O. by treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 raised by the assessee is against the disallowance of Rs. 8,17,741/- out of payments made to the labourers. The said amount was disallowed by the Assessing Officer for non-deduction of tax at source and applying the provisions of section 194C of the Act, the Assessing Officer was of the view that the said amounts were subjected to tax deduction at source and because of non-deduction, the amounts were not allowable under section 40(a)(ia) of the Act. 6. Briefly, in the facts of the present case, the assessee was a partnership firm carrying the business of builders & developers in and around Panvel area. The Assessing Officer during the course of assessment proceedings noted from the details of salary and wages that in includes labour charges of Rs. 17,55,902/- to the labour and Rs. 3,33,150/- to casual labours. From the labour-wise details, it was seen that the amounts were paid to various persons and in respect of two persons i.e. payment made to Aier of Rs. 61,500/- and payment made to Satyam Enterprises of Rs. 7,56,241/-, aggregating to Rs. 8,17,741/- attracted the TDS provisions. Since the assessee had not deducted tax at source, the learned Authorized Representative for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. On perusal of the written submissions filed by the assessee, we find that there was an outstanding closing balance of Rs. 14,79,043/- of loan taken by the assessee i.e. partnership firm from R.K. Builders and Developers Pvt. Ltd. Admittedly, both the partners Mr. Sanjay Kolkar and Mr. Rajendra Kolkar were the shareholders of the said private limited company. The said company had reserves and surplus to the extent of Rs. 2,01,884/-. The issue arising in the present grounds of appeal is whether in such circumstances, the amount advanced to the assessee could be treated as deemed dividend under section 2(22)(e) of the Act. The assessee is a partnership firm, but is not a registered shareholder of the said private limited company, only its partners were the shareholders / directors of the said company. The learned Authorized Representative for the assessee in the written submissions has made reference to the decision of Mumbai Special Bench of Tribunal in ACIT Vs. Bhumik Colour Pvt. Ltd. reported in 27 SOT 17 and pointed out that the provisions of section 2(22)(e) of the Act are applicable only in the hands of the person, who is the shareholder of lender company. Since the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrect address of the said person, hence, merits to be upheld. The CIT(A) rejected the explanation of the assessee, in view of the remand report and also did not accept the alternate plea of the assessee that the addition should be restricted to Rs. 2,42,500/-, since the assessee had failed to bring on record any evidence to show when the loan was advanced to Mr. S.R. Sharma and whether the same was reflected in assessee's books of account or not. Accordingly, addition of Rs. 5 lakhs was confirmed. 17. On perusal of record and written submissions filed by the assessee, the contention of the assessee was that the assessee requested the Assessing Officer to verify the correctness of the said loan transaction from Mr. S.R. Sharma as he was bedridden for the last six months. The Assessing Officer rejecting the explanation of the assessee, made an addition of Rs. 5 lakhs by invoking provisions of section 68 of the Act. The assessee has placed on record the letter filed before the Assessing Officer, in which it is reflected that the opening balance of loan account of Durvesh Construction Co. was debit balance of Rs. 2,57,500/- and Rs. 5 lakhs was transacted during the year and the closi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to receive the portion of sale consideration because of certain disputes. The assessee had also claimed that he had booked the balance sale consideration in the subsequent assessment year. In the absence of any documentary evidence in support of the said contention, the CIT(A) confirmed the addition made by the Assessing Officer. 21. The assessee is aggrieved by the aforesaid addition. 22. In the written submissions, the assessee has reiterated its plea that it had not received the balance amount from the prospective purchasers and hence, the same was not booked as sale consideration. The assessee claims to have booked the balance sale consideration in subsequent assessment year. Though the assessee is making the same plea before the authorities below and even before us, but the plea of the assessee cannot be accepted in the absence of any documentary evidence being filed by the assessee. Even before us, the assessee has failed to reconcile difference in sale consideration and / or to furnish the evidence that the said amount has been offered to taxation in the succeeding year and on what basis. In the absence of the same, we find no merit in the grounds of appeal No.9 and 10 in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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