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Asst. Commissioner of Income-tax Versus Shri H. Noor Ahmed, M/s. Noor Enterprises

2016 (4) TMI 558 - ITAT BANGALORE

Disallowance of excavation charges - Held that:- It is clear that only 30% of the diesel expenses of ₹ 27,00,090/- are attributable to the excavation activity and to that extent, the assessee would get relief. However, the CIT(A) has deleted the entire addition without considering the fact that addition of about ₹ 8 lakhs would be sustained, even if a proportionate 30% of diesel expenses is attributable towards excavation activity. Accordingly, we modify the order of the CIT(A) qua t .....

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s & Dvs (HUF), Goa in the balance sheet as on 1/4/2008 cannot be taxed because it was already offered to tax on accrual basis in the earlier year. Accordingly, we do not find any error or illegality in the impugned order of the CIT(A) qua this issue. - Decided in favour of assessee

Disallowance made u/s 40(a)(ia)- Held that:- TDS which was deducted by the assessee from the transport payment was deposited before the due date as per section 139(1). The CIT(A) has also placed reliance on .....

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Addition u/s 68 - CIT(A) deleted the addition by nothing the fact that the assessee produced confirmation from the party - Held that:- It is clear from the finding of the CIT(A) that the alleged confirmation was neither examined nor verified by the AO nor by the CIT(A). Once a document was available on record and it was not examined by the AO, it was incumbent upon the CIT(A) to get the said document verified from the AO by issuing remand order or examine by himself in the appellate proceeding .....

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ellant : Dr. P. K. Srihari, Addl. CIT. For the Respondent : Shri H. R. Suresh, CA. ORDER Per Vijay Pal Rao, JM This appeal by the revenue is directed against the order dated 17/2/2014 of the CIT(A) for the assessment year 2008-09. 2. The revenue has raised the following grounds: 1. The Order of the Ld.CIT (A) is opposed to facts of the case. 2. On the facts and circumstances and in law, the Ld.CIT(A) erred in deleting the addition of ₹ 31,80,844/- made out of the excavation charges debited .....

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(a). 5. On the facts and circumstances and in law, the Ld.CIT(A) erred in deleting the addition of ₹ 50 lakhs being cash credit u/s 68 without verifying the facts pertaining to earlier years made out of the excavation charges ited by the assessee. 6. The appellant craves for permission to add, modify or delete the grounds of appeal at the time of hearing the case. 3. Ground No.1 is general in nature and does not require any specific adjudication. Ground No.2 regarding disallowance of excav .....

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e assessee submitted that while computing the disallowance by AO, the entire diesel expenses of ₹ 27,00,090/- has been wrongly considered to be attributable to excavation activity. Assessee pointed out that the said expenses of diesel purchase of ₹ 27,00,090/- should be apportioned between hire activity and excavation activity. The assessee filed separate profit and loss account in respect of these two activities with proportionate bifurcation of expenses in the ratio of 30:70 betwee .....

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was produced before the AO and no new evidence or material was produced before the CIT(A). 4.4 We have considered the rival submissions as well as relevant material on record. The AO noted that the transport receipts are inclusive of excavation charges of ₹ 36,70,787/-. Further, the opening excavation work-in-progress was shown at ₹ 15,25,150/- and no closing work-in-progress was shown by the assessee. Accordingly, the AO worked out the addition as under: Opening Work in progress  .....

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ror by considering the entire diesel expenses towards excavation activity while working out the addition in question. The CIT(A) deleted the addition in para.4 as under: 4. The AO found that the transport receipt of the assessee was inclusive of excavation charges of ₹ 36,70,787. He calculated/reworked the expenses attributable to the excavation activity and arrived that his addition of ₹ 3 1,80,844 after considering the opening WIP of ₹ 15,25,150, excavation labour charges of .....

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to hire charges. A gross profit of ₹ 42,30,003 was shown attributable to hire charges and ₹ 5,19,280 to excavation charges. Considered thus, the AO's conclusions are clearly unwarranted especially since he has given no reason for considering the entire diesel expenditure as attributable to excavation activity only and the appellant's grounds succeed. Thus it is clear that only 30% of the diesel expenses of ₹ 27,00,090/- are attributable to the excavation activity and to .....

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ingly, this ground of the revenue is partly allowed. 5. Ground No.3 regarding addition of ₹ 7,50,202/- u/s 68 in respect of cash credit from M/s SVS & DVS (HUF) Goa. The AO held that satisfactory explanation of the transaction was not provided and hence, he treated the amount as unexplained cash credit u/s 68. 5.1 The assessee challenged the action of the AO before the CIT(A) and submitted that the said amount represented receivables from M/s Svs & Dvs (HUF), Goa against hire charg .....

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deleted the addition by giving the reasons in para.5.1 as under: 5.1 Before me it was contended that the said amount represented receivable from M/s SVS and DVS, Salgaocar house, Vasco da Gama against hire charges which had been duly shown on accrual basis in an earlier year and offered to tax. It was also shown as receivable in the balance sheet as on 01.04.2007 and this amount had been received and recorded in the books on 01.03.2008. I have examined this explanation of the appellant which is .....

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the impugned order of the CIT(A) qua this issue. Ground No.4 regarding disallowance made u/s 40(a)(ia): 6. During the course of assessment proceedings, AO noted that the assessee incurred transport charges of ₹ 1,03,26,985/-. On query from the AO regarding compliance of TDS, the assessee stated before the AO that it paid ₹ 1,21,148/- on 29/5/2008 which is a belated one. The AO held that sec.194C casts an obligation on the assessee to deduct tax at source on contract payment and remi .....

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nsidered the relevant material on record. The AO has made disallowance u/s 40(a)(ia) because the assessee made payment of TDS belatedly on 29/5/2008. On appeal, the CIT(A) has allowed the claim of the assessee by considering the fact and the issue in para.8.1 as under: 8.1 Before me in appeal it was contended that the appellant had paid the deducted TDS, along with interest, within the clue date for filing of return u/s 139 (1). Reference was made to the amendment effected by the Finance Act 201 .....

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/2011). I have gone through the judicial decisions cited and respectfully agree with the stand of the Hon'ble High Court and the ITAT. Since the appellant had deposited the TDS amount with interest before the due date of filing of return, and in view of the judicial decisions, as above the AO is directed to allow the claim of expenditure of ₹ 1,03,26,985. Thus it is clear that TDS which was deducted by the assessee from the transport payment was deposited before the due date as per sec .....

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ror or illegality in the impugned order of the CIT(A) qua this issue. Ground No.5 regarding addition of ₹ 50 lakhs u/s 68 of the IT Act: 7. The AO noted that the assessee has sundry creditors of ₹ 60,06,599/- from V.M.Salgaokar Sales International. The AO further noted that this amount is appearing as opening balance and neither assessee received above amount from the creditor nor creditor advanced the amounts to the assessee. Since the assessee could not produce any evidence by way .....

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06,599 the assessee had furnished a confirmation for ₹ 50 lac and only the balance was subject to reconciliation, but the AO did not take into account this confirmation available. From the copy of the ledger account of this party/creditor in the appellant's books for FY 2007-08 it is seen that the impugned amount was only an opening balance as on 01.04.2007 against which no payment was made by the assessee during the year. The opening balance in question, therefore, is clearly the resu .....

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