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TMI Blog2024 (11) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... s as called for by the AO during the reassessment proceedings as well as during the appeal proceedings to establish the genuineness of the expenses claimed on account of Agency charges of Rs. 2.46,07,278/- to M/s. Capricorn Logistics Pvt. Ltd. 3 (c) On the facts and circumstances of the case and in law, Ld CIT(A) has erred in holding that the notice u/s 148 and Assessment Order passed u/s 147 r.w.s. 143(3) are void ab-initio on the ground that no speaking order has been passed by the A.O. on the objections raised by the assessee without appreciating the fact that the assessee filed the objection at the fag end of the time barring assessment and the AO was constrained to deal with the Objection in the assessment order. 4 (d) On the facts and circumstances of the case and in law, Ld CIT(A) has erred in holding that the notice u/s 148 and Assessment Order passed u/s 147 r w.s. 143(3) are void ab-initio on the ground that there is wrong observation made by the AO by considering particulars of payment made persons specified u/s 40A(2)(b) | Clause 23 of Tax Audit Report] without appreciating that reference to clause 23 of Tax Audit Report has been made only for the amount paid to M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cash expenses which worked out to Rs. 17,99,142/-. On the Second disputed issue with respect to transportation and loading / unloading charges, the AO found that the assessee has incurred expenditure in cash and cheque as per the annexure and most of the cash expenses are self made vouchers and has disallowed @6% of the cash expenses works out to Rs. 1,92,275/-. The last disputed issue with respect to delay in payment/deposit of ESIC and PF, as the assessee has not deposited the employees contribution within the due date prescribed under the respective Act and the A.O made disallowance of Rs. 2,50,995/- and has assessed the total income of Rs. 2,69.57.580/- and passed the order u/sec 143(3) of the Act dated 29.12.2016. And on further appeal, the CIT(A) has granted partial relief and partly allowed the assessee appeal. 3.Subsequently, the A.O found that in the Tax Audit Report u/sec44AB of the Act Form.no.3CD, the assessee has disclosed that it has paid to one of the partners M/s Capricon logistics Pvt Lt an amount of Rs,2,46,07,278/- as Agency Charges and TDS is not deducted. hence as per the provisions of section 40(a)(i) of the Act,30% of claim of expenditure has to be disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emonstrated the Form.No.3CD placed at page 17 and in particular at Page 23 - clause no 23 along with Annexure D, where the details of payments made to the partner M/s Capricon logistics Pvt Lt is mentioned and TDS was also deducted on the quantum of the Agency services u/sec 194C of the Act placed at page 36 of the paper book. At this juncture, we considered it appropriate to refer to the observations of the CIT(A) in granting relief to the assessee dealt at Page16 Para 35 of the CIT(A) order read as under: "35. APPELLATE DECISION: The principal observations of the Assessing Officer is that from the 3CD report (clause 23) that the assessee has paid to one of the Partners M/s. Capricorn Logistics Pvt. Ltd. amount of Rs. 2,46,07,278/- as Agency Charges on which TDS was not deducted. Therefore, as per the provisions of section 40a(ia), thirty percent of the said expenditure is required to be added back in the total income of the assessee. Hence, the case was re-opened as per the provisions of section 147 of the I.T. Act, 1961 (hereby referred to as the Act) with the approval of the concerned higher authorities. Accordingly, notice u/s. 148 was issued on 25.03.2021. In response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of the same, the appellant submitted the extract of clause no. 23 of the said Audit Report for perusal and record. The appellant therefore submitted that the said notice u/s 148 is void ab initio since the facts relied upon by the A.O. is totally wrong. The appellant further submitted that the TDS is deducted on the payments to Capricorn Logistics Pvt. Ltd. in respect of clearing and forwarding agency charges and submitted the relevant TDS certificates and copy of 26AS. The said agency charges are paid from year to year for the business of the appellant. The appellant therefore submitted that even on merit of the case, the said addition is not sustainable as TDS is deducted as per the provisions of the I.T. Act. I have considered and perused the submissions and documents submitted before me by the appellant. The order of the Assessing Officer and his observations and conclusions are also perused and considered. At the outset, I am not inclined to agree with the additions made by the Assessing Officer for the following reasons. The A.O. has considered clause no.-23 of the Tax Audit Report u/s 44AB for issue of notice u/s 148 of the I.T. Act. The A.O. stated that the clause no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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