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TMI Blog2017 (5) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer is erroneous in law as well as on the facts of the case. 03) That the order of the Learned Commissioner of Income Tax (Appeals), confirming the additions of Rs. 9,02,950/- made u/s 40(a)(ia) of the Income Tax Act, 1961 for nondeduction of TDS u/s 194C of the Income Tax Act, 1961 by the Ld. Assessing Officer is erroneous in law as well as on the facts of the case. 04) That the order of the Learned Commissioner of Income Tax (Appeals), confirming the additions of Rs. 10,55,878/- made by the Ld. Assessing Officer as is erroneous in law as well as on the facts of the case. 05) That the order of the Learned Commissioner of Income Tax (Appeals), confirming the additions of Rs. 7,72,957/- made u/s 40(a)(ia) of the Income Tax Act, 1961 for nondeduction of TDS u/s 194-I of the Income Tax Act, 1961 by the Ld. Assessing Officer is erroneous in law as well as on the facts of the case. 06) That the order of the Learned Commissioner of Income Tax (Appeals), confirming the additions of Rs. 4,36,693/- made u/s 40(a)(ia) of the Income Tax Act, 1961 for nondeduction of TDS u/s 194-I for Machinery Charges by the Ld. Assessing Officer is erroneous in law as well as on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to have been received by the assessee from M/s. Pobi Technologies & Constructions Pvt. Ltd according to AO Shri Dulal Acharya, Partner did not say anything. Shri Amit Baran Roy, another partner stated that the said amount was credited to assessee's account regarding consumables/repairs and maintenance charges, which was mistakenly not shown in their books. Accordingly, the AO added the said amount to the total income of the assessee. 8. Before the CIT-A the assessee sought further opportunity. Considering the same the CIT-A sought remand report from AO. In the said remand report, the AO stated that the amount of Rs. 6,49,210/- received from Ion Exchange Limited was credited to account of assessee on 31-03-08 and other amount of Rs. 9,554/- received from M/s. Pobi Technologies & Constructions P.Ltd was credited to assessee's account on 31-07-07. The CIT-A considering the remand report of the AO confirmed the impugned additions by stating as under:- 4.4 I have gone through the findings of the A.O. in the assessment order and remand report, as the well as the submissions of the appellant. It will be seen and well appreciated that the AO. has given very crystal clear findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F.Y 2008-09 relevant to A.Y 2009-10. He further contended that even if it is proved that the assessee did not show such amount in its account the entire amount cannot be added to the income of the assessee. On the other hand, the ld.DR has relied on the orders of the AO and CIT-A. 10. Heard rival submissions and perused the material available on record. We find that the discrepancies as found by the AO during scrutiny proceedings regarding one of the partners of the assessee explained that the assessee has received an amount of Rs. 6,49,210/- and credited the same to assessee's account. But, thereafter, in explanation to statement u/s. 133(6) of the Act another partner of the assessee submitted that the said company issued cheque on 6-4-08 and assessee shown the same as credit for the F.Y 2008-09 relevant to A.Y 2009-10. But, however, it is observed from the remand report as discussed by the CIT-A that amount of Rs. 6,49,210/- was credited to assessee's account on 31-03-08 and other amount of Rs. 9,554/- came into account of the assessee on 31-03-08. The findings show that both the said amounts came into account of the assessee in the asstt. year under consideration. But, the AO f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d M/s. Pobi Technologies & Construction Pvt. Limited did not make any cash payment to the assessee. The CIT-A considering the remand report confirmed the addition made by the AO by stating as under:- "Hence in the light of the above clinching evidence brought on record during the assessment proceeding by the AO the remand report dt. 05.11.2013 by the present incumbent is highly wanting and deficient. The AO while preparing the remand report have put on blinkers and has not gone through the relevant portion of the findings of his predecessor in the assessment order dt. 29.12.2010. It will be seen from the body of the assessment order that there is no iota of discussion related to corruption of data of the books of account in the system of the assessee firm. The appellant has not made any such submission during the assessment proceedings. The assessee firm has rather admitted vide its letter dt. 22.2.2010 to the AO during the assessment proceeding, that it has received cash as advance from these parties and returned these amounts to these two parties during the year. This letter dt. 22.12.2010 is a clear admission of fact which cannot be washed off now under the garb of data corrup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not so gullible to have submitted such hard copies of ledgers of these two parties to the AO without verifying the contents therein. Besides even it is admitted for argument's sake that there was a data corruption in the system of the assessee, can the corrupted computer system suomoto generate such credulous and meticulous data for the appellant as has been reproduced in the tabular chart of this order? The appellant has not been able to explain as to' how and from where such credible "foreign data" got merged with its books of accounts, and thus miserably failed to bring out any evidence in support of its contentions raised in ground no. 2 of its grounds of appeal. Besides the appellant has also not explained as to how only selectively this portion of the data in the computer system got corrupted by virus and other data in the system have remained unaffected and have remained intact. This mystry has not been resolved by the appellant during this appellate proceedings. Hence in the light of the above findings I am of the firm belief and opinion that such theory of data corruption is definitely a well concocted after thought by the appellant. In the light of the pletho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reasonable to conclude that the source of these cash credits in the books of the assessee has remained unexplained. Besides these replies from these two parties were there before the A.O. during the assessment proceedings. Hence to this extent the comments of the AO. in his remand report dt. 05.11.2013, on this issue is not accepted because of these discrepancies. Similarly the submissions made by the appellant is rejected as it is found to be a concocted story without any material base. Thus in the light of the above discussion and in the facts and circumstances of the case, the AO is absolutely right in his finding that the amount of Rs. 35,24,438/- is unexplained cash credits in the books of the assessee and the AO is in a very sound legal footing to invoke the provisions S-68 of the Act on this point. In the light of above, I find no infirmity in the findings of the AO in the assessment order and accordingly the addition of Rs. 35,24,438/- by the A.O is hereby upheld. Accordingly this ground of appeal is dismissed. " 14. The ld.AR of the assessee submits that the addition was made for not providing any explanation. He further submits that the amounts in question receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee are rejected. In view of above discussion, we uphold the impugned order of the CIT-A. Accordingly, ground no. 3 of assessee is dismissed. 17. Ground nos. 3,4, 5 & 6 are relating to additions of Rs. 9,02,950/-, Rs. 10,55,878/-, Rs. 7,72,957/- and Rs. 4,36,693/- made by invoking the provisions of section 40(a)(ia) of the Act for non deduction of TDS u/s. 194C and 194 I of the Act. 18. The AO found that the assessee has made the payments to certain labour suppliers and no TDS was deducted u/s. 194C of the Act. In explanation, the assessee stated that there was no contract with the labour suppliers and as such the assessee did not make any TDS on such payments. Being not satisfied with the submissions of the assessee the AO made the addition of Rs. 9,02,950/- u/s. 40(a)(ia) of the Act for violation of section 194C of the Act. 19. The CIT-A sought remand report, wherein the AO found that the assessee has been maintaining separate ledger accounts for each and every labour suppliers and taking into consideration the same the CIT-A held that there is some kinds of contract with the labour suppliers confirmed the addition made by the AO. 20. Regarding the addition of Rs. 10,55,87 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Tribunal ought not to have accepted the judgment and order of the CIT (Appeal) who has quashed the disallowance of deduction of Rs. 41,33,710/- and on account of tax deduction at source. The learned Tribunal has recorded the fact that the department has not been able to bring any material on record to show that the assessee has made the payment to the transporters in pursuance of contract for carriage of goods of the assessee and the question of deduction at source under section 194C does not and cannot arise. In the absence of evidence of payment made by the assessee to the transporters, the assessee cannot be saddled with the liability of deducting tax at source. Before us no other point has been urged not it is said that the aforesaid fact finding is truthful without any basis whatsoever." 7.2. We find that the decision of this tribunal in the case of Samanwaya vs ACIT reported in 34 SOT 332 in ITA No. 484 (Kol) of 2008 dated 23.4.2009 directly supports the case of the assessee wherein it was held that :- "We find that in this case, admittedly, the labour sardars in the present case has no locus standi as labour contractor as a labour sardar and a labour contracto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourers without the help of these labourers. Though the assessee claims them to be it's labour and these persons have deposed that they are the labourers, yet, I am not fully convinced with their plea that these persons are simply labourers and nothing more than that. From their appearance, dress, behavior and confidence, I am confident that they are the labour sardars, though they are denying this fact. Whether you admit or not but it can not be denied that these persons enjoy some privileged positions in comparison to other labourers." From the above it is amply clear that the AO himself is not sure and forming the opinion on his own surmise and conjecture. In our considered view the ld. DR has not brought anything contrary to the findings of ld. CIT(A). In this connection we rely on the decision of ACIT vs. Kalindi Agro Biotech Ltd. (2012) 20 taxmann.com 339 where it was held that the provisions of Sec. 194C of the Act are applicable if the payment has been made to a contractor for the year exceeding Rs. 20,000/-. Similarly the jurisdictional ITAT, Kolkata in the case of Samanwaya Vs. ACIT 34 SOT 332 has held as under : "Business expenditure--Disallowance under s. 40(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our sardars are not suppliers of labour and as such he rightly deleted the impugned addition made u/s. 40(a)(ia) of the Act. Therefore, we delete the addition made by the AO and confirmed by the CITA. Grounds no-3 and 4 raised by the assessee are allowed. 26. Regarding the amount of Rs. 7,72,957/- in ground no.5, the AO found that M/s. Pobi Technologies & Constructions Pvt. Ltd supplied 'Transit Mixture' machine to the assessee. For which the said concern charged Rs. 7,72,957/-.In explanation, the assessee submitted that the assessee was not aware of the provisions of section 194I of the Act. Such submission of the assessee was not acceptable to the AO and added the said amount of Rs. 7,72,957/- to the total income of assessee for non deduction of TDS on such payment by invoking the provisions of section 40(a)(ia) of the Act for violation of section 194I of the Act. 27. Before the CIT-A the assessee contended that the said contract was awarded to M/s. Pobi Technologies & Constructions Pvt. Ltd. The said concern, M/s. Pobi Technologies & Constructions Pvt. Ltd deducted hire charges out of the bill raised by the said concern. Before him the assessee contended that it had no scope t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. 32. Before the CIT-A the assessee produced the details of payments on account of machinery hire charges along with copies of bill raised by various parties from whom the machineries were hired. The CIT-A examined and found that all the bills are computer generated. He also found that the said bills are containing no telephone nos. and has only signature of parties. The CIT-A also found no stamp and signature of dealing staff and details of payments made by the assessee to the parties on the said bills. The CIT-A in the interest of justice directed the AO to verify all the bills before giving effect to the impugned order of the CIT-A. The CIT-A out of the disallowance of Rs. 15,33,941/- made by the AO upheld the addition to an extent of Rs. 4,36,693/- and deleted the addition of Rs. 10,97,248/-. 33. The ld.AR submits that the issue may be restored to the AO for the verification. 34. The ld. DR relied on the order of AO. 35. Heard rival submissions and perused the material available on record. We find that the CIT-A confirmed the impugned addition to an extent of Rs. 4,36,693/-. The CIT-A while examining the ledger accounts of various parties to whom the machine hire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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