2012 (11) TMI 1175 - AT - Income Tax

Summary

Issues involved: Appeal against order of ld. CIT(A)-XV, Ahmedabad dated 1st June, 2012 regarding additions made u/s 40(a)(ia) and u/s 40A(3) of the Income Tax Act.

Addition u/s 40(a)(ia) - Issue 1 & 2:
The Revenue appealed against the deletion of addition of Rs. 1,96,24,849 made u/s 40(a)(ia) for non-compliance with Section 194C provisions. The A.O. found TDS deductions not deposited on time, invoking Section 40(a)(ia). However, ld. CIT(A) deleted the addition citing retrospective nature of the amendment by Finance Act, 2010. The CIT(A) relied on precedents from ITAT Ahmedabad and Calcutta High Court, directing deletion of the expenditure. The Tribunal upheld this decision, dismissing Revenue's grounds.

Addition u/s 40A(3) - Issue 3:
The A.O. added Rs. 1,97,000 u/s 40A(3) for cash payments exceeding Rs. 20,000 on single days. Assessee explained payments were made through different individuals but accounted as single entry. A.O. disallowed the amount due to lack of evidence. However, ld. CIT(A) accepted the appellant's explanation, noting the established practice of making payments below Rs. 20,000 through a supervisor. CIT(A) referred to precedents and directed deletion of the addition. The Tribunal upheld this decision, dismissing Revenue's appeal.

In conclusion, the Tribunal upheld the decisions of ld. CIT(A) regarding both issues, resulting in the dismissal of Revenue's appeal.