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Shri Vishwajit C Chindarkar Versus DCIT RG 22 (2) , Mumbai

TDS u/s 194C - expenses on account of Hire Charges U/S 40(a)(ia) for non deduction of TDS - assessee has obtained form No.15-1 from the sub-contractors - Held that:- Once assessee has obtained form No.15-1 from the sub-contractors whose contents are not disputed or whose genuineness is not doubted then assessee is not liable to deduct tax from the payments made to sub-contractors. Once assessee is not liable to deduct tax u/s 194C then disallowance u/s 40(a)(ia) cannot be made. We also found tha .....

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the amount deposited in the bank account - Held that:- Both accounts are duly disclosed in the balance sheet. Form the above details it is clear that cash deposited in the Shamrao Vitthal Co Op bank is out of the cash balance available with the assessee and are duly disclosed in the books of accounts. Accordingly AO is directed to delete the addition so made - Disallowance 10% of the expenditure - Held that:- Total expenditure of ₹ 48,21,503/- was debited by the assessee in its profit .....

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ccordingly, we confirm the disallowance so made by the AO to the extent of 5%. - Appeal of the assessee allowed in part. - ITA No.2762/Mum/2012 - Dated:- 13-9-2017 - SHRI R.C.SHARMA, AM AND SHRI SANDEEP GOSAIN, JM For The Assessee : Shri Jayant R Bhatt For The Revenue : Shri Pooja Swaroop ORDER PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against the order of CIT(A)- 33, Mumbai dated 30/01/2012 for A.Y. 2008-09 in the matter of order passed u/s.143(3) of the IT Act. 2. Follo .....

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osited in the Shamrao Vitthal Co. Op. Bank as unaccounted income of the appellant. 3. On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in confirming the additions of ₹ 4,82,150/- treating the same as bogus expenses being 10% of total expenses of ₹ 48,21,503/-. 4. The Order passed by the learned CIT (A) is illegal, bad in law, ultra virus and contrary to the provisions of the law and facts and is passed without application of mind and in violatio .....

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he assessee had filed its return of income on 30th September, 2008 declaring total income of ₹ 10,72,550/-. 5. During the course of scrutiny assessment, AO observed that the assessee has debited vehicles hire charges paid, to Profit & Loss A/c and claimed as an expense. The amount paid by way of vehicle hire charges to the owner of vehicle was not subjected to TDS as they do not own vehicles in excess of 2 Nos. However, the AO disallowed the same u/s.40(a)(ia) by observing that no tax .....

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filed affidavit from the recipient of income according to which they were not owing vehicle in excess of 2 Nos. The proviso of Section 194C is directed in respect of payment made to the transporter, when transporter is owing more than two vehicles. Proviso of Section 194C reads as under:- (1)-Any person responsible for paying any sum to any resident (hereafter in this section referred to 39- the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursu .....

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or for both; or any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or any trust; or (d) any University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, any firm,] shall, at the time of credit of such sum to the account of the contractor or at the time of payment ther .....

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tor for carrying out, or for the supply of labour for carrying out, the whole or any part of the work undertaken fay the contractor or for supplying whether wholly or partly any labour which the contractor has undertaken to supply shall, at the time of credit of such sum to the account of the subcontractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax on incom .....

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b-section (2), the expression contractor shall also include a contractor who is carrying out any work (including supply of labour for carrying out any work) in pursuance of contact between the contractor and the Government of a foreign State or a foreign enterprise or any association or body established outside India.] [Explanation II).-For the purposes of this section, where any sum referred to in sub-section (1) or subsection (2) is credited to any account, whether called Suspense account or b .....

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nsport other than by railways; (d) catering.] (3) No deduction shall be made under sub-section (1) or sub-section (2) from. (i) the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor or subcontractor, if such sum does not exceed twenty thousand rupees: Provided that where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year exceeds fifty thousand rupees, the person responsib .....

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ng or crediting such sum, in the prescribed form and verified in the prescribed manner and within such time as may be prescribed, if such subcontractor is an individual who has not owned more than two goods carriages at any time during the previous year: Provided also that the person responsible for paying any sum as aforesaid to the subcontractor referred to in the second proviso shall furnish to the prescribed income-tax authority or the person authorised by it such particulars as may be presc .....

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onsible or crediting any sum to the account of the sub-contractor before the event of being credited or paid to such sub-contractor. (3) The particulars under the third proviso to clause (i) of subsection (3) of section 194C to be furnished by a contractor responsible for paying any sum to such sub-contractor shall be (4) The particulars referred to in sub-rule (3) shall be in From No. 15J. (4) The particulars referred to in sub-rule (3), shall be furnished. (i) to the Commissioner of Income-tax .....

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part of the work undertaken by Hid contractor, or, for supplying any labour, the contractor shall deduct TDS as income-tax on the income comprised therein, 8. In the instant case before us the assessee has not deducted the TDS by virtue of the proviso as stated hereinabove on the payments made to various truck owners for plying, hiring or leasing goods carriages since the sub-contractors were individual who have not owned more than two goods carriages at any time during the previous year. There .....

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er where an assessee has obtained form No.15-1, the assessee is still liable to deduct tax under section 194C. In our considered view once assessee has obtained form No.15-1 from the sub-contractors whose contents are not disputed or whose genuineness is not doubted then assessee is not liable to deduct tax from the payments made to sub-contractors. Once assessee is not liable to deduct tax u/s 194C then disallowance u/s 40(a)(ia) cannot be made. We also found that the assessee has also brought .....

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the amount deposited in the bank account. Addition was made on the plea that during the Financial year relevant to A.Y.2008-09 as per ITS information, the assessee has deposited cash of ₹ 49,54,600/- in the Shamrao Vithal Co-operative Bank Ltd., 121/4845, Chembur on 31/03/2008. It was explained before the AO vide letter dated 22/12/2010 that an amount of ₹ 1,50,46,125/- was withdrawn from Bharat Co-Operative Bank Ltd., and deposited the amount of ₹ 54,11,500/- in Bharat Co-Ope .....

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k statement of Bharat Co Op bank Limited & Shamrao Vitthal Co Op bank. All the cash deposited in Shamrao Vitthal Co Op bank, as stated in AIR, are forming part of the cash flow of the assessee and has shown in the Cash Flow statement so submitted. Most of the deposits are out of cash withdrawn from Bharat Co Op bank Limited. During the year under review total withdrawal from bank & deposited in banks are as under- Cash Withdrawals from Banks:- Bharat Co Op bank Limited 15046125.00 Shamra .....

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