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TMI Blog2016 (10) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 2011-12 on 30.9.2011 declaring total income of Rs. 6,99,560/-. The assessment for the year has been completed u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as 'the Act') on 31.12.2013 and determined total income of Rs. 9,14,560/- by making additions of Rs. 95,000/-u/s 40A(3) of the Act and further addition of Rs. 1,20,000/- towards loading and unloading charges. 3. The Principal CIT, Visakhapatnam issued a show cause notice dated 18.3.2016 and asked to explain why the assessment order passed by the A.O. u/s 143(3) of the I.T. Act, dated 31.12.2013 shall not be revised under the provisions of section 263 of the Act. The Principal CIT, proposed to revise the assessment order for the reason that on examinat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , however, it is noticed from the tax audit report form 3CD, tax was not deducted at source from such credits/payments towards hire charges as required u/s 194C of the Act. As the TDS was not made on such credits towards hire charges, the expenditure claimed to the extent of Rs. 12,05,000/- within the total hire charges debited to the P&L account ought to have been disallowed u/s 40(a)(ia) of the Act, but the A.O. has failed to do so. It is evident from the record that no query at all was raised nor any clarification was sought on this issue during the assessment proceedings. The record does not also indicate that the A.O. had applied his mind to facts and materials on record through a process of enquiry and investigation and formed a view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment by a specific questionnaire and the assessee has submitted all the details before the A.O., therefore, the CIT was not correct in coming to the conclusion that the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue. The Ld. A.R. further submitted that the issue of disallowance of hire charges is covered by special bench decision of ITAT, Visakhapatnam in the case of Merilyn Shipping and Transports Vs. ACIT 136 ITD 23., as such there is no prejudice is caused to the revenue. Therefore, the CIT was not correct in coming to the conclusion that the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue. The Ld. D.R. o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete the assessment by making certain adhoc disallowances different from the issue of hire charges, therefore, the CIT was not correct in holding that the A.O. has not examined the issue of applicability of TDS. The assessee further contended that the A.O. has examined the issue as such the assessment order passed by the A.O. is not erroneous. It is further submitted that the issue involved in the revision proceedings is covered by the special bench decision of ITAT, Visakhapatnam in the case of Merilyn Shipping & Transports Vs. ACIT (supra), wherein the ITAT held that no disallowance u/s 40(a)(ia) of the Act, can be made when the expenditure incurred has been paid before the end of the relevant financial year. In the present case on h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paid before the end of the relevant financial year. It is also an admitted fact that the A.O. has not examined the issue at the time of completion of assessment, however, there is no revenue loss is caused to the exchequer because the issue is covered by the decision of ITAT, special bench (SB), wherein the ITAT held that no disallowance can be made u/s 40(a)(ia) of the Act, on the amounts paid within the end of the financial year. Since, the assessee failed to appear before the CIT, we are of the opinion that the CIT cannot presume things which is in the minds of assessee, as such opined that CIT has rightly assumed his jurisdiction to revise the assessment order based on the information available on record and his order is upheld. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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