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2020 (3) TMI 1139

..... s clear from the exact break up of TDS return. He has also deducted TDS @2% u/s.194C of the Act. Further on perusal of the copies of Income Tax Return produced by the assessee of Shri Khagesh Patel in the form of ITR-IV, It is clear that Shri Khagesh Patel has offered the amount received from the assessee company as per Section 44AD of the Act. Section 44AD of the Act relates to the civil contract works but not for the commission received. We noted from the documents and submissions of the assessee, there is contradictory in the submissions of the assessee as the assessee has taken plea before the authorities below that it is a commission payment towards selling of goods, whereas as per TDS return as well as copy of ITR-IV of Shri Khagesh Patel, which is in the nature of contract payments. Therefore, in our considered opinion, to avoid confusion we think it fit to send back this issue to the file of AO for finding out the correct nature of payments made to Shri Khagesh Patel by the assessee company after providing reasonable opportunity of being heard to the assessee and the assessee is also directed to provide the documents and avoid in taking unnecessary adjournments. Therefore, .....

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..... ming the disallowance of ₹ 999390 for non-submission of Vat return, (para-9) 4. On the fact and under circumstances of the case the commissioner (appeals) was unjustified for not sending for remand the case and confirming the addition of ₹ 2799978. 2. Brief facts of the case are that the assessee filed return of income on 21.01.2011 declaring income from business at ₹ 7,95,422/- after claiming brought forward loss of ₹ 4,01,142/- resulting the net income disclosed at ₹ 3,94,280/-, however, the tax was paid u/s.115JB of the I.T.Act at a total income of ₹ 9,28,813/-. The assessee company was engaged in manufacturing and sale of slurry explosives during the year. The case was selected for scrutiny and statutory notices were issued to the assessee. During the course of assessment proceedings, the AO noticed that the assessee has claimed an amount of ₹ 9,57,144/- has been paid to Shri Khagesh Kumar Patel towards commission and assessee s sales at Dhanbad, Asansol and Bilaspur. A copy of ledger account of Shri Khagesh Patel was submitted in which it was noticed that no TDS has been made by the assessee, therefore, the AO issued show cause notice .....

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..... hat the assessee has not made any violation of provisions of Section 40A(3) of the Act and the authorities below have wrongly incorporated the payments made to Shri Khagesh Patel from the ledger accounts and the TDS has duly been deducted thereon. 6. On the other hand, ld. DR relied on the order of authorities below and submitted that the assessee has not complied the provisions of Section 40(a)(ia) of the Act as well as the provisions of TDS chapter. As per Section 194H of the Act, the assessee should have been deducted @10% on the entire payments made but he has deducted only 2% instead of 10% and the authorities below have rightly applied the provisions of Section 40A(3) of the Act for payments exceeding ₹ 20,000/- in cash. Therefore, this ground of appeal should be dismissed. 7. After hearing both the sides and perusing the entire material available on record and the orders of the authorities below, we noticed that the assessee has made the payments to Shri Khagesh Patel. On perusal of the documents submitted before us, we notice that the assessee has not deducted TDS as per Section 194H of the Act. He has deducted @2% instead of 10%. It is also mentioned before us that m .....

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..... om one M/s Black Diamond Explosives Pvt. Ltd. for its Asansol purchase and he has also purchased Black Diamond, both ledger copies were produced before the AO but there was a difference noted by the AO and the closing balance of ₹ 1,25,17,151/-, Black Diamond Pvt. Ltd. has been transferred into the ledger account of Dhanbad purchase. However, the assessee could not furnished the details of VAT returns for its Asansol and Dhanbad purchase. The AO calculated total purchase from Asansol and Dhanbad and he concluded that there was a difference of ₹ 7,67,375/- and ₹ 9,24,312/-. Therefore, he treated it as a discount receipt from the vendor, therefore, he disallowed the claim of ₹ 16,91,687/-. 9. Aggrieved by the above additions, the assessee filed appeal before the CIT(A). The assessee filed details of VAT return and documents as an additional evidence but the CIT(A) denied to accept the additional evidence stating that in spite of providing ample opportunities to the assessee the assessee could not provide VAT returns and documents in support of his claim, therefore, he did not accept the additional evidence filed by the assessee and dismissed the appeal of the .....

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..... ords produced before us, we find that the documents filed by the assessee before us go to the root of the matter, therefore, copy of the VAT return is accepted and accordingly, we send the issue back to the file of AO for adjudication of this issue. The assessee is directed to cooperate with the AO to file necessary documents before the AO for early disposal of the case. 17. Further on scrutiny of accounts, it was noticed by the AO that the assessee has purchased raw material for manufacturing of slurry explosives worth of ₹ 3,15,09,272/-. The assessee was asked to produce the copy of ledger accounts from whom the raw materials have been purchased. The assessee filed the same but the AO noticed that the desired information have not been filed by the assessee, therefore, he issued show cause notice which has been incorporated in the assessment order. The assessee was repeatedly asked by the AO to reconcile the difference noted by him but the ld. AR of the assessee also expressed his inability to furnish the additional details. Accordingly, the difference noted by the AO to the tune of ₹ 27,99,978/- was claimed as bogus purchase and added to the total income of the assess .....

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