TMI Blog2017 (10) TMI 1510X X X X Extracts X X X X X X X X Extracts X X X X ..... fresh, after considering the submissions of the assessee. This ground of Assessee s appeal is allowed for statistical purpose. Addition of 3% of the contract expenses - HELD THAT:- We find that Assessing Officer on the one hand they had stated that the assessee has contravened provision of Section 40A (3) of the Act on the other hand he proceeded to make disallowance of 3% of the total contract expenses. Disallowance is made on adhoc basis without specifying as what were the expenses were that not got verified by the assessee. Under these facts, the addition so made cannot be sustained. - Decided in favour of assessee. - ITA No. 311/JP/2016 - - - Dated:- 26-10-2017 - SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM For the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that the assessee made payment of ₹ 78,89,109/- in cash in contravention to Section 40A(3) of the Income Tax Act. The Assessing Officer observed that the contract proportion of the contract expenses of the total receipts is considered to be disproportionately excessive, hence, made addition of ₹ 8,26,630/-. Against this, the assessee preferred an appeal before Ld. CIT(A), who after considering the submissions, dismissed the appeal. Thereby, the Ld. CIT(A) confirmed the addition, as made by the Assessing Officer. Against this, the assessee is in further appeal before this Tribunal. 3. Ground no.1 is against confirming the addition on account of non-deduction of tax by invoking the provision of Section 40(a)(ia) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en put to rest by the honorable Supreme Court in the SLP filed against the ruling of honorable Allahabad High Court in the case CIT vs Vector Shipping Services Ltd. The honorable Courts have pointedly and specifically opined that these provisions would come into play in respect of the amounts 'payable' at the end of the financial year and not to the amounts already 'paid' during the year. The honorable territorial Bench of Jaipur have also been taking the same view consistently in number of cases; two instances are given for ready reference (i) Jaipur Vidhut Vitran Ltd. vs. DCIT 123 TTJ 888 . (ii) Laxmi Narayan Agarwal, Jaipur vs. DCIT Circle-6, Jaipur ITA No.395/JP/2014. Of late, the Commissioners (Appeals) are taking the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges were paid directly to the labour, therefore, in view of the decision of the Hon ble Delhi High Court rendered in the case of CIT vs. Dewan Chand (2009) 173 Taxman. 3.3 We have heard the rival contentions. We find that Ld. CIT(A) given a finding on fact that evidences were produced by the assessee do not inspire confidence. We find that Ld. CIT(A) was not decided the issue whether the tax was deductible and the provision of Section 40(a)(ia) of the Act was applicable. Therefore, considering the totality of the fact, we deem it proper to restore this issue to the file of the Ld. CIT(A) to decided afresh, after considering the submissions of the assessee. This ground of Assessee s appeal is allowed for statistical purpose. 4. Groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments and no details/ evidence were furnished. The AO has taken most reasonable approach and has disallowance only 3% of the expense looking to the fact that expenses of ₹ 78,89,109/- was made in cash for which a table is also appended with assessment order. Looking to these facts the action of the AO is justified and disallowance of ₹ 8,26,630/- made out of total contract expenses at ₹ 2,75,54,326/- is herby upheld. From the finding of the authorities below, it is evident that disallowance is made on adhoc basis without specifying as what were the expenses were that not got verified by the assessee. Under these facts, the addition so made cannot be sustained. Therefore, we direct the Assessing Officer to delete the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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