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2017 (3) TMI 433 - ITAT KOLKATA

2017 (3) TMI 433 - ITAT KOLKATA - TMI - TDS u/s 194C - addition u/s. 40(a)(ia) - Held that:- We find that the assessee had filed additional evidence in terms of rules 29 of ITAT Rules in the form of certificate from M/s. Baba Transport which is enclosed in page 1 of the paper book and from the said certificate it is seen that M/s. Baba Transport had duly accounted for in their books and in the income tax return the receipt of monies from the assessee to the tune of ₹ 9,50,000/-. It is also .....

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for taking the benefit of second proviso to sec. 40(a)(ia) of the Act read with section 201(1) of the Act which has been held to be retrospective in operation by the decision cited supra and accordingly, the issue should not be invited with disallowance u/s. 40(a)(ia) of the Act. - With regard to other two payments in the sum of ₹ 1,00,000/- each to M/s. Maa Jagadamba Transport and M/s. Shiv Shakti Transport, we find that the assessee was not able to adduce any evidence even before u .....

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age 33 of the paper book, the names of the three parties viz., A. K. Goala, Sanja and labour association are duly reflected therein on three different dates. This clearly proves that the assessee had issued bearer cheques to those three parties. Hence, the finding of the AO that payments were made by account payee cheques is factually incorrect. We also find that the assessee had filed ledger account before the AO which clearly proves that the payments were made to two labour sardars and one lab .....

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r association and if the same are found to be true, the assessee should not be invited with disallowance u/s. 40(a)(ia) of the Act as the same does not fall within the ambit of provisions of section 194C of the Act. - Addtion on account of difference in the value of sundry creditors - Held that:- We find lot of force in the argument advanced by the Ld. AR that no addition could be made in respect of the opening balance difference in sundry creditors to the tune of ₹ 5 lacs. Accordingly .....

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ition as to whether the assessee had indeed made any payment to the said party in the sum of ₹ 3 lacs and ₹ 34,070/-. This, in our considered opinion, would meet the ends of justice. We are not inclined to accept the argument of the Ld. DR to give direction to the AO for assessment of ₹ 5 lacs in the earlier years instead of AY 2009-10 as, in our considered opinion, the same cannot be given as it is not relevant for the disposal of the year under appeal. - I.T.A No. 2833/Kol/20 .....

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09-10 vide his order dated 27.12.2011. 2. The first issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in upholding the disallowance made u/s. 40(a)(ia) of the Act in respect of transport charges in the facts and circumstances of the case. 3. The brief facts of this issue is that the assessee is the proprietor of M/s. Tirupati Balajee Enterprises engaged in trading in iron ores. During the course of assessment proceedings the AO observed that assessee has debited a .....

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on the following grounds: 3. For that on the facts of the case the Ld. CIT(A) was not legally justified in sustaining the addition of ₹ 9,50,000/- on A/c of payments made to M/s. Baba Transport, u/s. 40(a)(ia) and the same may please be deleted. 4. For that on the facts of the case the Ld. CIT(A) was not legally justified in sustaining the addition of ₹ 1,00,000/- on A/c of payments made to M/s. Ma Jagdamba Transport, u/s. 40(a)(ia) and the same may please be deleted. 5. For that on .....

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me tax returns. Accordingly, he prayed for admission of this additional evidence in terms of Rule 29 of the Income-tax Rules, 1962 and prayed for setting aside this aspect of the issue to the file of the AO to verify the same from the records of M/s. Baba Transport and if found to be true, the assessee should not be invited with disallowance u/s. 40(a)(ia) of the Act. In support of this, he also placed reliance on the second proviso to section 40(a)(ia) of the Act which was introduced in Finance .....

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he said parties that it had disclosed the same in their income-tax return and paid taxes thereon. He requested for setting aside of this aspect of the issue also to the file of the AO so that in the meantime the assessee would make earnest efforts in obtaining the certificate from the said parties to support the case of the assessee. In response to this, the Ld. DR objected to the very admission of additional evidence in terms of Rule 29 of ITAT Rules by arguing that the certificate enclosed in .....

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e form of certificate from M/s. Baba Transport which is enclosed in page 1 of the paper book and from the said certificate it is seen that M/s. Baba Transport had duly accounted for in their books and in the income tax return the receipt of monies from the assessee to the tune of ₹ 9,50,000/-. It is also seen that the said certificate admittedly contains PAN and income tax particulars of M/s. Baba Transport. We find that even though the said certificate is not signed by the Chartered Accou .....

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nd accordingly, the issue should not be invited with disallowance u/s. 40(a)(ia) of the Act. 5. With regard to other two payments in the sum of ₹ 1,00,000/- each to M/s. Maa Jagadamba Transport and M/s. Shiv Shakti Transport, we find that the assessee was not able to adduce any evidence even before us. However, in view of the fact that the said payments were made by account payee cheques and those parties being residing at a far away location, we deem it fit and proper in the interest of j .....

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bourers for screening work by invoking the provisions of section 40(a)(ia) of the Act in the facts and circumstances of the case. 7. Brief facts of this issue are that the assessee debited a sum of ₹ 12,90,000/- under the head Screening Account in his P&L Account. The AO called for the details of such expenses. During the course of such assessment proceedings the assessee filed ledger of screening account. From the said ledger account, the AO observed that the assessee had paid a sum o .....

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f ore is very important and it is mainly labour oriented job and labours are used for such manual screening for separation of boulders etc. from iron ore, for purification. It was stated that these payments were made through labour sardar and through labour association available in the said locality and accordingly, the same does not fall under the ambit of any contract within the meaning of section 194C of the Act and hence, the provisions of section 40(a)(ia) of the Act could not be invoked on .....

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) is not applicable to such payments and the addition on this count may please be deleted. 8. The Ld. AR filed the complete wage sheet comprising of payments made towards screening to various labourers through labour sardar together with their attestation in the form of signature/thumb impression clearly stating the number of days worked and the rate per day as an additional evidence and prayed for admission of the same by this Tribunal as admittedly these papers could not be gathered from the c .....

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r roll for wage register of various payments paid for various dates whereas in the ledger account furnished by the assessee before the AO which states that the said payment is made in cash on a single day to labour sardar/labour association. Accordingly, the Ld. DR objected to the basic veracity of the said evidence filed before the Tribunal by the assessee. He also stated that the AO had stated in his order that the payments were made by the assessee through account payee cheques on three diffe .....

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by bearer cheques as could be evidenced from bank statement which is enclosed in page 33 of assessee s paper book. He also stated that the screening work is carried on only during a particular period and hence, the single payment is made to labour sardar for onward distribution to various labourers based on number of days worked by them for which separate wage sheet is maintained which is now filed as additional evidence. 11. We have heard rival submission and have carefully perused the material .....

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roves that the payments were made to two labour sardars and one labour association for payment to labourers for various dates. This fact is also supported by wage sheet filed by the assessee in the form of additional evidence before us. However, since wage sheet was not available before the lower authorities for their examination, we deem it fit and appropriate in the interest of justice and fair play, to set aside this issue to the file of the AO to examine the wage sheet and the contention of .....

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ary endorsement has been made in the file. Accordingly, ground nos. 7 and 8 raised by the assessee are dismissed as not pressed. 13. The last issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in sustaining the addition in the sum of ₹ 8,34,070/- made on account of difference in the value of sundry creditors in the facts and circumstances of the case. 14. The brief facts of this issue is that the AO during the course of assessment proceedings sought details of .....

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ee was accordingly asked to reconcile the said difference. Since no reply was forthcoming from the assessee, the AO made an addition on account of difference in sundry creditors treating the same as bogus and added a sum of ₹ 8,34,070/- in the assessment. The said addition was sustained by the Ld. CIT(A) in first appeal. Aggrieved, the assessee is in appeal before us on the following ground: 9. For that on the facts of the case the Ld. CIT(A) was not justified in sustaining the addition of .....

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s an opening balance of ₹ 22,06,533/- payable by the assessee to the said party. The assessee had made purchases of ₹ 2,73,034/- during the year from the said party. The assessee had made payments by account payee cheques to the tune of ₹ 16,45,497/- during the year to the said party. Accordingly, there is a balance of ₹ 8,34,070/- payable to the said party as on 31.03.2009. The assessee was able to get a statement of account from the said party Mr. Nirmal Kumar Pradip Ku .....

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ssee during the year to the tune of ₹ 16,45,497/- which is also duly reflected in the statement of account of the said party. Apart from this, the said party had credited two sums one i.e. on 26.05.2008 ₹ 3 lacs vide cheque no. 609001 and on 31.03.2009 the sum of ₹ 34,070/- vide cheque no. 256194. The Ld. AR argued that these two payments (i.e. ₹ 3 lacs and ₹ 34,070/-) were not paid by the assessee to the said party. Accordingly, there is a genuine difference betwee .....

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y the statement was obtained by the AO u/s. 133(6) of the Act behind the back of the assessee. In any case, he argued that no addition could be made in the sum of ₹ 5 lacs in respect of opening difference in sundry creditors. 16. In response to this, the Ld. DR argued that the assessee was indeed confronted with the statement of account obtained from the said supplier by the AO during the course of assessment proceedings and was directed to reconcile the difference thereon. The assessee ca .....

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