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TMI Blog2017 (8) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the facts and circumstances of the case. 3. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 3. From the aforesaid grounds, it would be clear that the only grievance of the assessee relates to the confirmation of addition of Rs. 3,66,61,812/- made by the AO on account of sub-contract work. 4. The facts of the case in brief are that the assessee filed its return of income on 30.09.2009 showing nil income but also showing current year's loss at Rs. 24,51,69,394/- which was revised on 05.02.2009 and the loss of Rs. 21,72,34,449/- was declared. The said return was processed under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'). Later on, the case was selected for scrutiny. During the course of assessment proceedings, the AO noticed that the assessee furnished unit-wise audit report which revealed that the assessee had made sub-contract work provision of Rs. 3,66,61,812/- as per Annexure - C of the Ranchi Works Unit for the assessment year 2007-08 but did not deduct while computing the taxable income for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the submissions of the assessee, sustained the disallowance by observing in para 5.4.2 in the impugned order which reads as under:- "5.4.2 The above amounts were included under the head Construction & Work Expenses and debited in the P&L account under schedule J. From the transfer voucher of the Ranchi Works unit and respective details it is observed that the above liability was debited against provision for expenses on works. Therefore, it is clear that the liability did not crystallize during the previous year relevant to A Y 2008-09. In view of the above, the above liability being a provision only being debited in the P&L account, therefore, the same should have been added back in the computation of taxable income. Since, the said amount was not added back being provision, therefore, the AO is justified in making the said addition. The appeal fails in this ground." 7. Now, the assessee is in appeal. 8. The ld. Counsel for the assessee submitted that all the details were furnished before the ld. CTI (A) who asked the remand report on the additional evidences but the AO did not comment on the evidences. It was further submitted that actual figure of the work done up to 31.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee's paper book, and to decide the issue in accordance with law after providing due and reasonable opportunity of being heard to the assessee. 10. As regards to the cross objection No. 264/Del/2014, the ld. Counsel for the assessee submitted that he has the instruction not to press the same and gave in writing as under:- "Cross objection not pressed. Sd/-" In view of the above, the cross objection filed by the assessee is dismissed as not pressed. 11. In the Department's appeal in ITA No. 735/Del/2014, following grounds have been raised:- "1. On the facts & in the circumstances of the case, the Ld. CIT (A) has erred in reducing the disallowance u/s 40(a)(ia) of the Act from Rs. 20,69,74,740/- to Rs. 1,11,83,140/-. 1.1 On the facts & in the circumstances of the case, the Ld. CIT (A) has erred in reducing the disallowance u/s 40(a)(ia) by accepting the additional evidences submitted by the assessee during appellate proceedings and not appreciating the fact that the assessee was provided many opportunities to furnish its reply and evidences. 2. On the facts & in the circumstances of the case, the Ld. CIT (A) has erred in reducing the disallowance u/s 43B of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year, was deposited in Government account before the due date of filing the Income-tax return for the assessment year under consideration, therefore, no disallowance could have been made on this account. 15. The ld. CIT (A) after considering the submissions of the assessee sustained the disallowance of Rs. 1,11,83,140/- by observing in para 5.2.4 of the impugned order which reads as under :- "5.2.4 It is also evident from the replies sent by the Jalpaiguri Unit that the sum of Rs. 61,602/- (TRB) has been wrongly reported by the auditor as TDS not deposited. Similarly, from the replies sent by the units it is seen that Rs. 81,716: Kopili and Rs. 1,529: Karbilangi is more than 15 years old. However, no explanation or reply is available in respect of TDS of Rs. 54,867: Durgapur. Therefore, disallowance of only Rs. 54,86,700/- is justified on account of non deposit of TDS of Rs. 54,867/- (Durgapur). In view of the above the disallowance of sub-contract expenses of Rs. 20,12,78,300/- made by the AO u/s 40(a)(ia) on account of non-deposit of TDS is reduced to Rs. 54,86,700/-. The AO is however directed to verify whether above TDS of Rs. 4,07,901/- were deposited in Government Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/-) on account of unpaid other tax liability u/s 43B of the Act and added the same to the income of the assessee. 21. Being aggrieved, the assessee carried the matter to the ld. CIT (A) and submitted that the tax liability of Rs. 9,192/- NCR, Noida was more than 10 years old, Rs. 3,29,013/- Raurkela pertained to FY 1994-95, Rs. 3,45,203/- Raurkela pertained to FY 1999-00, Rs. 26,981/- TRB was wrong reporting, therefore, the above other tax liabilities amounting to Rs. 7,29,982/- was relating to earlier years and was not required to be considered for disallowance u/s 43B of the Act. It was further submitted that the tax liability of Rs. 48,130/- and Rs. 624/- of DOT CRPF, Rs. 624/- Passighat and Rs. 27,169/- Raipur Zonal Office were deposited before the due date of filing the return, therefore, the above amount of Rs. 76,547/- being deposited before the due date of filing the return should not have been disallowed. It was further submitted that a sum of Rs. 14,41,770/- had been brought forward from the earlier years as was evident from the annual report for the FY 2006-07 relevant to AY 2007-08. The ld. CIT (A) accepted the aforementioned contention of the assessee. As regards to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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