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2016 (2) TMI 40 - ITAT PUNE

2016 (2) TMI 40 - ITAT PUNE - TMI - Non deduction of tds u/s 194C - payments made to the labourers. - Held that:- We find no merit in the submissions of the assessee that the provisions of section 40(a)(ia) of the Act are applicable only to the amounts which are outstanding or remaining payable at the end of every year i.e. 31st March. The Pune Bench of Tribunal has consistently taken a view that the provisions of section 40(a)(ia) of the Act are applicable to the amounts irrespective of whether .....

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e - Decided in favour of assessee

Addition u/s 68 - cash credit - Held that:- The perusal of the balance sheet filed by the assessee reflects that the closing balance as on 31.03.2007 was ₹ 2,42,500/- i.e. the amount due to Durvesh Construction Co. The case of the assessee before us is limited that it had received sum of ₹ 5 lakhs from M/s. Durvesh Construction Co., out of which sum of ₹ 2,57,500/- was the loan due from the said person and the balance of ₹ 2,42 .....

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nt of amount which was advanced by the assessee. However, in respect of balance of ₹ 2,42,500/-, the assessee has failed to discharge his onus i.e. to establish the creditworthiness of the person advanced the loan. Accordingly, we direct the Assessing Officer to restrict the disallowance to ₹ 2,42,500/- Decided partly in favour of assessee.

Addition being difference in receipts - Held that:- The assessee claims to have booked the balance sale consideration in subsequent as .....

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f appeal, thus confirming the addition - Decided against assessee - ITA No. 277/PN/2014 - Dated:- 27-1-2016 - Ms. Sushma Chowla, JM And Shri Pradip Kumar Kedia, AM For the Appellant : None For the Respondent : Shri Dheeraj Kumar Jain ORDER Per Sushma Chowla, JM This appeal filed by the assessee is against the order of CIT(A)-I, Thane, dated 17.10.2013 relating to assessment year 2007-08 against order passed under section 143(3) of the Income-tax Act, 1961 (in short the Act ). 2. Despite service .....

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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. 2. Reasons given by A.O. for confirming disallowance of ₹ 1,58,050/- out of the total disallowance of ₹ 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 .....

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yment 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 treating a sum of ₹ 2,01,884 as a deemed dividend and thereby adding the same to the total income within the meaning of Sec 2(22)(e). 6. Reasons given by the learned CIT(A) i .....

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h credit by invoking the provisions of Sec 68 of the Income Tax Act, 1961. 8. Reasons given by the CIT(A) for confirming the disallowance made by A.O. of ₹ 5,00,000/- being loan taken from Durvesh Construction Company and treating the same as unexplained cash credit by invoking the provisions of Sec 68 of the Income Tax Act, 1961, are wrong insufficient and contrary to the facts and evidence on record. 9. In the facts and circumstances of the case and in law the learned CIT(A) erred in con .....

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Grounds of Appeal as occasion may arise of demand. 4. In respect of grounds of appeal No.1 and 2 raised by the assessee, there is noting on one of earlier hearing that the grounds of appeal No.1 and 2 are not pressed. In any case, the issue raised vide grounds of appeal No.1 and 2 is against the disallowance of ₹ 1,58,050/- for non-deduction of tax out of commission paid. By applying provisions of section 40(a)(ia) of the Act, the said amount was disallowed for non-deduction of TDS. In vi .....

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essing 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 S .....

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hy the disallowance on labour charges should not be made. The learned Authorized Representative for the assessee agreed for the disallowance and an addition of ₹ 8,17,741/- was made in the hands of assessee. 7. The CIT(A) upheld the addition made by the Assessing Officer dismissing the plea of the assessee that relief was allowable since tax deduction provisions were not applicable in respect of the amounts already paid, but were applicable only on the amount which was payable at the end o .....

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une Bench of Tribunal has consistently taken a view that the provisions of section 40(a)(ia) of the Act are applicable to the amounts irrespective of whether the same were paid during the year or were outstanding at the close of the year. In the absence of any justification for non-deduction of TDS out of sub-contract payments and in view of admission of the assessee before the Assessing Officer, we uphold the addition of ₹ 8,17,741/-. The grounds of appeal No.3 and 4 raised by the assesse .....

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ing the provisions of section 2(22)(e) of the Act and since the company M/s. R.K. Group Builders and Developers Pvt. Ltd. had reserves and surplus as on 31.03.2007 amounting to ₹ 2,01,884/-, the loan to the extent of ₹ 2,01,884/- was added as income of the assessee. 12. The CIT(A) upheld the order of Assessing Officer, against which the assessee is in appeal. 13. On perusal of the written submissions filed by the assessee, we find that there was an outstanding closing balance of S .....

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) 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 .....

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. Briefly, in the facts relating to the issue, the assessee had received sum of ₹ 5 lakhs from Mr. S.R. Sharma, sole proprietor of Durvesh Construction Co. The assessee furnished loan confirmation of the said party and pointed out before the Assessing Officer that though during the year, the assessee had received loan of ₹ 5 lakhs but the said amount was adjusted towards opening loan balance of ₹ 2,57,500/-, which was taken by Mr. S.R. Sharma in earlier years and balance of  .....

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ficer added sum of ₹ 5 lakhs under section 68 of the Act. 16. Before the CIT(A), the claim of the assessee was that though it had received sum of ₹ 5 lakhs from Mr. S.R. Sharma, but sum of ₹ 2,57,500/- was adjusted against the loan outstanding and the balance amount of ₹ 2,42,500/- was loan taken during the year. The submissions of the assessee were forwarded to the Assessing Officer, who in his remand report dated 04.03.2013 stated that though the assessee in the remand .....

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itor or the correct 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 ₹ 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 ₹ .....

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led before the Assessing Officer, in which it is reflected that the opening balance of loan account of Durvesh Construction Co. was debit balance of ₹ 2,57,500/- and ₹ 5 lakhs was transacted during the year and the closing balance as on 31.03.2007 was ₹ 2,42,500/-, copy of the said letter is placed at page 33 of the Paper Book. Further, a letter dated 29.12.2009 is also placed on record, in which there is no reference to the said loan transaction. The perusal of the balance she .....

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d admittedly, received ₹ 5 lakhs from the said person and had only shown the balance of ₹ 2,42,500/- in the balance sheet. In the above said facts and circumstances, where the assessee had advanced sum of ₹ 2,57,500/- in the preceding year to Mr. S.R. Sharma, proprietor of M/s. Durvesh Construction Co., then to the extent of said amount, loan is explained as the creditworthiness can be accepted to the extent of amount which was advanced by the assessee. However, in respect of b .....

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the evidences furnished by the assessee noted that as against the amount declared by the assessee and sales as per agreement value of different transactions varied, sum of ₹ 67,500/- was not taken by the assessee for the purpose of sale. When confronted, the learned Authorized Representative for the assessee submitted that the said amount was offered to taxation in the next year, but the assessee failed to furnish the documentary evidence in this regard and hence, the same was added to the .....

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