Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s. Dhameja Mining Versus I.T.O.,W 2 (4) , Asansol

2016 (12) TMI 1190 - ITAT KOLKATA

Disallowance of expenditure u/s. 40(a)(ia) - Held that:- We dismiss the plea of the assessee that provisions of section 40(a)(ia) of the Act cannot be made applicable in respect of amounts paid before the end of the previous year. However, the assessee had submitted the information before the CIT-A that the payees have duly reflected this subject mentioned receipts in their returns of income and paid taxes thereon. We find that the amendment in section 40(a)(ia) of the Act has been held to be re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce u/s. 40(a)(ia) of the Act would be operative in the hands of the assessee. - Decided in favour of assessee for statistical purposes - Income from undisclosed source u/s. 69A - Held that:- We find that the AO added the impugned addition for not disclosing the same in the balance sheet and by observing the same was settled through cheque on 14- 04-2010. Admittedly, the submission as made by the assessee before the CITA that assessee has taken into consideration the gross bill, which was di .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

decide this issue afresh in accordance with law, uninfluenced by earlier decision and decision of CIT-A in this regard. - Decided in favour of assessee for statistical purposes - I.T.A. No. 701/KOL/2015 - Dated:- 21-12-2016 - Shri M.Balaganesh, Accountant Member and Shri S.S.Viswanethra Ravi, Judicial Member For The Appellant : Shri U. Dasgupta, Advocate, ld.AR ORDER Shri S.S. Viswanethra Ravi, JM :- This appeal by the assessee is directed against the order dated 16-03-2015 passed by the Commiss .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) was not justified in sustaining the addition of ₹ 23,72,327/- u/s. 40(a)(ia) of the Act 61, when the provisions of the section is not attracted and the addition may please be deleted. 2. For that on the facts of the case the ld. CIT(A) was not justified in sustaining the addition of ₹ 2,05,102/- u/s.69A of the Act 61, and the addition may please be deleted. 3. For that on the facts of the case the assessment order dated 26/03/2013, remained in the custody and in control of the A.O .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ducts its business in the name and style as Dhameja mining. The Assessee filed its return declaring a total income of Rs,1,36,904/- on 28-03-2012 and under scrutiny notices u/section 143(2) and 142(1) of the Act were issued, in response to which, the Assessee produced relevant documents as sought. The AO found the assessee debited an expenditure of ₹ 25,59,525 under the head Machine hire charges in the Profit & Loss account and not deducted any tax from the payment made to following pa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n 31st March,2010. The assessee firm has not deducted any tax at source. But failure to deduct tax at source on Machine Hire Charges should not qualify for disallowance of the entire expenditure which has already been paid. In support of this I on behalf of my client submitting before you the judgment of ITAT, Vishakhapatnam Bench, Vishakhapatnam in the case of M/s Marilyn Shipping & Transporters, Vishakhapatnam, which is self-explanatory.( ITA No - 477/Vizag 12008)" 8. The AO rejected .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

der: 7. The effect of non admission of SLP is as under: a. Rejection of SLP does not mean that decision of HC has been approved.[CIT Vs Quality (Pat) 224 ITR 77,CIT Vs Shree Manjunatheswara Packing Products & Camphor Works (SC) 231 ITR 53,J.K Charitable Trust Vs WTO & Ors. (All) 222 ITR 523] b. Special Leave petition dismissed with speaking order is declaration of law by Supreme Court - After rejection of SLP, lower Courts can review its order - Once SLP is admitted, lower Courts have no .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

m 123 (Cal) and CIT v.Sikandarkhan N. Tunvar [2013] 33 taxmann.com 133 (Guj) have given reasoned ruling distinguishing the decision of Merilyn Shipping & Transport. The High Courts have held that the views expressed in the case of Merilyn Shipping & Transports are not acceptable. In view of discussion above the decision of Hon. High Court of Allahabad is to be compared with that of Hon. High Court of Kolkota . The latter is the jurisdictional High Court and its decision has to prevail. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e payee disclosing such payment as income in return of income and the same was brought to the notice of CIT-A. He also submits that the reliance was placed on in the case of Merlyn Shipping & Transport reported in 20 taxmann.com 244(Visag)(SB). Inspite of which the CIT-A dismissed the ground involving the same. 10. Heard the ld.AR and perused the material available on record. We find that the Assessee relied on the decision of a Special Bench in the case of Merilyn Shipping & Transports .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

syndicate did not agree with the finding of the Special Bench that the Assessing Officer can disallow only when if any amount is found to be payable as on the year end and was pleased to hold the provisions of section 40(a)(ia) of the Act are applicable not only to the amount which is shown as payable on the date of balance-sheet, but it is applicable to such expenditure, which become payable at any time during the relevant previous year and was actually paid within the previous year. We find th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ught off and properly worded in order to give meaning to its intent. The Legislature by consciously replacing the words from "credited" or "paid" or "payable", the intent has been made clear that only the outstanding amount or the provision for expenses are liable for TDS are to be disallowed in the event there is default in not following the TDS provisions under Chapter XVII-B of the Act. No doubt the object of section 40(a)(ia) of the Act is to ensure that the TDS .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and therefore it should apply only if any amount is "payable", but if the amount is already paid the provisions of this section should not apply. The crucial word is "payable". The question arises "whether payable means payable at the end of the year or payable at any time during the year though paid during the year itself? If one looks into the TDS Provisions from sections 194A to 194K, it will be apparent that as per the language of those sections, tax is to be deducte .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

law that each and every word of the section has its own meaning and while drafting section 40(a)(ia) was meant to be applicable only if the amounts covered therein was "payable" at the end of the year. Reference may be made, for the scope and effect of section 40(a)(ia) as clarified by CBDT in Circular No.5 of 2005, date 15th July, 2005 to show that the intention to introduce this provision was brought to curb bogus payments by creating bogus liability." 12.4 In our considered opi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

0(a)(ia) in the backdrop of these sections, we find that it refers to the amount 'payable' 'on which tax was deductible at source under Chapter XVII-B'. Applying the principles of eujesdem generis, it can easily be inferred that term 'payable' in section 40(a)(ia) has to be interpreted in the light of sum referred to in various sections contained in Chapter XVII-B noted above, on which tax was deductible and, therefore, the term 'payable' in Section 40(a)(ia) refe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ds to inevitable conclusion that the said word also includes the 'paid' amount. 21. In view of above discussion, we answer the question as under:- The provisions of section 40(a)(ia) of the Income Tax Act, 1961, are applicable not only to the amount which is shown as payable on the date of balance-sheet, but it is applicable to such expenditure, which become payable at any time during the relevant previous year and was actually paid within the previous year. In the result the question is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

income and paid taxes thereon. We find that the amendment in section 40(a)(ia) of the Act has been held to be retrospective in operation in the light of the decision of the Hon ble Delhi High Court in the case of CIT Vs. Ansal Land Mark Township (P) Ltd reported in 377 ITR 635 (Del). Respectfully following the said decision, we deem it fit and proper and in the interest of justice and fair play set aside this issue to the file of the AO for examination of subject mentioned receipts in the hands .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Enterprises, Bokaro Steel City, Jharkhand u/s. 133(6) of the Act. On verification of such information the AO found that the closing balance of assessee in the books of said M/s. S.K Enterprises. But the same was not reflected in assessee s audited balance sheet. Further he found that the said amount was cleared on 14-04-2010 through cheque relevant to FY 2009-10. The AO treated the same as income from undisclosed source for not reflecting the same in the balance sheet of the assessee u/s. 69A of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

,05,102/- was yet to be paid. A good amount of cash payment was made by S.K Enterprise, which payment might have not been correctly. Since the assessee is claiming that he has received the entire payments during the year and there was nothing receivable, there is no question of any doubts to be raised as all gross bill have been disclosed and offered for taxation. There is no reason to disbelieve the appellant s books and relied on the books of S.K Enterprise, which entry have been made suiting .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the sum received by cheque after the end of the financial year against business receiavables at the end of financial year is not figuring in the balance sheet. Thus an incontrovertible fact of an asset not recorded in the books of account exists. This fact is independent of whether the sum is included as a business receipt or not. The fact of existence of unaccounted assets in the form of business receivables stands substantiated. This is independent of whether it is already taken to profit and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version