TMI Blog2018 (5) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... account of contractual receipts shown in the P & L account of assessee - Held that:- According to assessee, there were discrepancies between the amount payable and amount receivable from Mechanical Division, Govt. of W.B & TDS certificates issued. The AO & CIT-A did not consider the submissions of assessee in their right perspective. We find that there was difference of turnover as per TDS Statement and Profit & Loss A/c, which requires verification by the AO. Therefore, taking into consideration the facts of the case and the submissions of ld.AR and issue involved in the appeal, we deem it fit and proper to remand the matter to the file of the AO for verification. The assessee has to clarify the difference found by the AO by proper explanation along with evidence in respect of TDS, turnover and total receipts of assessee. - I.T.A No. 1642/Kol/2014 - - - Dated:- 25-4-2018 - Shri M. Balaganesh, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Appellant : Shri Soumitra Choudhury, Advocate,ld.AR For the Respondent : Shri Sallong Yaden, Addl.CIT, ld.Sr.DR ORDER Shri S.S.Viswanethra Ravi, JM: This appeal by the Assessee is directed aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order and the contention of the appellant vide written submission dated written submission dated 20-05-2014 on the issue. On consideration of the assessment order, I find that the appellant had conceded to the mistake of not deducting tax at source for the payments made as discussed (supra) before the AO and even filed written submission to the effect that the disallowance u/s.40(a)(ia) may be made and that tax was deducted and deposited in the subsequent year. The Second Proviso to section 40 reads as follows: Where in respect of any sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which tax has been paid. The present submission before during the appellate proceeding is in stark contrast to what transpired at the assessment stage. The assessee had submitted detailed of labor charges before the AO. On perusal of the same it appears that these payments were made to various companies and no TDS was effected on these payments. It is therefore evident that the payments were made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and hire charges and all the payments were made to various firms and companies. The contention of the ld.AR is that if another opportunity is given to assessee to submit all the details relating to payments made to said firms and companies and to find out as to whether the payees (firms/companies) considered respective amounts in their accounts and also offered to tax thereon in their respective returns of income in terms of 2nd proviso to section 40(a)(ia) of the Act. We find force in the submissions of the ld.AR and we find support from the decision of the Hon ble High Court of Delhi in the case of CIT Vs. Ansal Landmark Township (P) Ltd. reported in 377 ITR 635(Del) in remanding the matter to the AO for the said purpose. Relevant findings of the Hon ble High Court of Delhi in the case of Ansal Land Mark Township(P) Ltd is reproduced herein below:- 7. Having aggrieved by order of Ld. CIT(A), the assessee before us prayed to restore the issue on hand to the file of AO and relied on Judgment dt. 26-8-2015 of Hon ble High Court of Delhi in the case of CIT-1 Vs. Ansal Land Mark Township(P) Ltd reported in 377 ITR 635 (Del) and on order of Tribunal, Kolkata Benches in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra ) , the Court finds that it has undertaken a thorough analysis of the second proviso to Section 40 (a)(ia) of the Act and also sought to explain the rationale behind its insertion. In particular, the Court would like to refer to para 9 of the said order which reads as under: On a conceptual note, primary justification for such a disallowance is that such a denial of deduction is to compensate for the loss of revenue by corresponding income not being taken into account in computation of taxable income in the hands of the recipients of the payments. Such a policy motivated deduction restrictions should, therefore, not come into play when an assessee is able to establish that there is no actual loss of revenue. This disallowance does deincentivize not deducting tax at source, when such tax deductions are due, but, so far as the legal framework is concerned, this provision is not for the purpose of penalizing for the tax deduction at source lapses. There are separate penal provisions to that effect. Deincentivizing a lapse and punishing a lapse are two different things and have distinctly different, and sometimes mutually exclusive, connotations. When we appreciate the object o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospective effect from 1st April, 2005, being the date from which sub clause (ia) of section 40(a) was inserted by the Finance (No. 2) Act, 2004. 14. The Court is of the view that the above reasoning of the Agra Bench of ITAT as regards the rationale behind the insertion of the second proviso to Section 40(a) (ia) of the Act and its conclusion that the said proviso is declaratory and curative and has retrospective effect from 1st April 2005, merits acceptance. 11. Respectfully following the above, we deem it fit and proper to remand the matter to the file of the AO. Ground nos. 2 to 7 raised by the assessee in the appeal are allowed for statistical purpose. 12. Ground nos. 8 to 10 are relating to confirmation of addition of ₹ 77,26,433/- made on account of contractual receipts shown in the P L account of assessee. 13. During the scrutiny proceedings the AO found that the assessee has debited the following expenses/TDS of ₹ 77,26,433/- in the Profit Loss A/c against receipt of ₹ 25,27,52,384/-:- a) ₹ 11,99,860/- on account of Cess b) ₹ 34,42,284/- on account of TDS c) ₹ 30,84,289/- on account W.C.T, totaling t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover as per TDS Statement and Profit Loss A/c was ₹ 1 ,50,21,171/- . The AO fairly excluded the amounts which were properly explained and or reconciled by the appellant. The appellant could not demonstrate before me why the amount of ₹ 77,26,433/- deserves to be deleted. On the other hand the AO made the addition of ₹ 77,26.433/- after considering all reconciliation and excluding advances etc., I find that the appeal on this ground stands to no merit and the same is therefore dismissed. 16. The ld.AR submits that the issue was totally misrepresented before the CIT-A and the assessee is ready to file all documents and prayed to remand the matter to the file of AO. On the other hand, the ld. DR relied on the order of the AO CIT-A. 17. Heard rival submissions and perused the record. We find that the contention of assessee was that the contractual receipts includes AD-interim advance and the same were adjusted against the report verification certificate and deduction is made on final payment. According to assessee, there were discrepancies between the amount payable and amount receivable from Mechanical Division, Govt. of W.B TDS certificates issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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