TMI Blog2016 (9) TMI 1427X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee. The AO therefore should not have any difficulty in making the required verification. We therefore set aside the order of the CIT(A) to the extent to which he had sustained the order of the AO on the disallowance u/s.40(a)(ia) and remand the issue to the AO to verify whether the recipients have included the receipts paid by the assessee in their respective returns of income and also paid taxes on the same. Similar directions as were made above should be given in the present case also. Addition on account of education expenses for the employee of the assessee - Held that:- It would be just and proper to set aside the order of CIT(A) on this issue and remand to the AO for fresh consideration of the issue with the liberty to the assessee to establish that the expenses in question were in fact incurred for the education of the children of the employees. If it is so established then the deduction claimed should be allowed. - ITA 647/KOL/2014 - - - Dated:- 2-9-2016 - N.V.Vasudevan For the Appellant: Shri Miraj D. Shah, AR For the Respondent: Shri Amitabh Bhattacharya, JCIT ORDER This is an appeal by the Assessee against the order dated 28.01.2014 of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 19.02.2013. The Assessee submitted that the total Contractual receipt of the assessee as per 26AS was ₹ 50,53,527/- as against the total such receipts declared by the assessee in his return at ₹ 43,22,316/-. The assessee claimed that if the above difference of ₹ 4,08,920/94p is excluded, then the addition that should be sustained is for the balance difference of ₹ 3,22,291/- only (₹ 50,53,527/- minus ₹ 4,08,920/- minus ₹ 43,22,316/-). The assessee also claimed that the total of all his bank credit (both disclosed undisclosed) after adjusting for TDS and the opening and closing sum of Sundry debtors comes to ₹ 52,90,981/- whereas his total turnover of both contract job work of trading declared in the Return of Income was ₹ 47,98,412/-. Thus the difference could be only ₹ 4,92,412/- and not ₹ 7,03,010/- as held by the AO. The assessee also claimed possibility of income of other years booked by ECL and has also claimed ignorance about the manner of release of payments by ECL. 6. The CIT(A) was of the view that the above explanation of the assessee can lead to only one conclusion and that the account of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat these were already included in the contract receipts of ₹ 55,21,437/- but failed to prove the said contention. The CIT(A) also held that the Assessee s further claim in his rejoinder to the remand report of the AO for further reduction of ₹ 4,75,253/- on the ground that this sum represents 'Sale of Spare Parts' of ₹ 4,75,253/- was an afterthought. There are several reasons for not accepting the claims of the assessee on this point:- (a) The job work is for major oil companies which always pay by cheque and after deducting TDS. (b) The trading activity receipts have not been proved to have been received by cheques only. Therefore a concession for the same cannot be given against cheque deposits in the undisclosed bank account of the assessee. (c) The written submission of the assessee also did not make any such claim as made subsequently in the rejoinder. Before the AO also, no such claim was made. (d) No further evidence has been produced in support of this claim by the assessee. For the above reasons, the CIT(A) confirmed the order of the AO and the total addition of ₹ 7,03,0101- made by the AO was enhanced to ₹ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed and undisclosed portion. We, therefore, uphold the same and direct the AO. accordingly. The ground of appeal of the department, therefore, fails. The Hon ble Calcutta High Court in the appeal by the revenue against the order of the Tribunal, held as follows :- From the bank account of the assessee maintained with HDFC Bank, it appears that the opening credit balance as on 1st April, 2005 was ₹ 60,854.88p. and the closing balance as on 30th March, 2006 was Rs..491.97p. It is possible that during the financial year 2005-06 an aggregate sum of ₹ 48,15,614/- was deposited, but it is also a fact that during the aforesaid financial year from time to time various payments were made. There is no finding recorded anywhere that this expenditures were not on account of business expenditure. Therefore, the position which emerges is that the assessee has undisclosed income as well as undisclosed expenditure. Therefore, doing the best, which could be done in the facts and circumstances of the case, CIT (Appeal) held that 10% of the receipts are to be treated as the net profit of the assessee. The aforesaid view has been affirmed by the learned Tribunal. This was whol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or that in the facts and circumstances of the case the Ld. Commissioner of Income Tax (Appeals) erred in confirming the addition of ₹ 7 ,55,200 / - u/s 40 (a)(ia) of the Income Tax Act 1961. The said disallowance is unjustified and the same be deleted. 15. The assessee paid the following amounts to different parties for supply of technical works and labourer on a regular basis for conducting AMC job-work. Though there exists no written agreement yet service of such labourer was taken to carry out the maintenance of oil flow Meter in different companies. According to the AO, this type of contract job falls within the ambit of See194C of the Income Tax Act, 1961 (Act) and the Assessee was under an obligation to deduct tax at source on the payments made as above as payment of such sum exceeded twenty thousand rupees which is applicable for the relevant asstt. Year [Sec194C(5)]. Since tax was not deducted at source, the AO held that there was violation of the provision of See40(a)(ia) of the Act on the following payments falling u/s.194C of the Act: ShivSaktiEngineering,Halisahar, WB ₹ 100,200/- vide Chq.No.470757 dt.2611.2008 -do- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the same. To the extent the recipients from the Assessee have so included the sum in their returns of income and filed the same, no disallowance u/s.40(a)(ia) of the Act ought to have been sustained by the CIT(A). The CIT(A) ought to have also directed the AO that in case the recipient parties are not cooperating in providing details, the AO should call for the information u/s. 133(6) or 131 of the Act, for verification of the same. In this regard we also find that the Assessee has furnished all the details of assessment particulars of the recipients of payment from the Assessee. The AO therefore should not have any difficulty in making the required verification. We therefore set aside the order of the CIT(A) to the extent to which he had sustained the order of the AO on the disallowance u/s.40(a)(ia) of the Act and remand the issue to the AO to verify whether the recipients have included the receipts paid by the assessee in their respective returns of income and also paid taxes on the same. To the extent the recipients from the Assessee have so included the sum in their returns of income and filed the same, no disallowance u/s.40(a)(ia) of the Act should be made by the AO. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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