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2015 (6) TMI 172 - AT - Income TaxNon deduction of TDS under section 40(a)(ia) on labour payment - CIT(A) deleted the addition - Held that - As there is a clear-cut finding given by the ld. CIT(Appeals) that the assessee has duly produced the books of account as well as the bills, etc. before the Assessing Officer and even the evidences were filed to prove that Shri Dilip Kumar Paul was the employee of the assessee to whom the assessee had transferred funds and he was not a sub-contractor. We al so noted that the ld. CIT(Appeals) duly called for the remand report from the Assessing Officer and in the remand report the Assessing Officer did not deny that Shri Dilip Kumar Paul was the employee of the assessee, but only objected the admission of the fresh evidences on the basis that the assessee has not submitted the complete set of books. Since the assessee has made the payment to the labourers through the employee Shri Dilip Kumar Paul, therefore, we do agree with the ld. CIT(Appeal s) that it is not a case where the provisions of section 194C can be applied - Decided against revenue. No deduction of TDS for payment to various parties under section 194C read with section 40(a)(ia) - CIT(A) deleted the addition - Held that - The second proviso to section 40(a)(ia) was inserted by the Finance Act, 2012 w.e.f. 1s t April, 2012 will apply in the case of the assesse. In order to rationalize the provisions of disallowance on account of non-deduction of tax from the payments made to a resident payee, it is proposed to amend section 40(a)(ia) to provide that where an assessee makes payment of the nature specified in the said section to a resident payee without deduction of tax and is not deemed to be an assessee in default under section 201(1) on account of payment of taxes by the payee, the, for the purpose of allowing deduction of such sum, it shall be deemed that the assessee had deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee. Thus restore this issue to the file of the Assessing officer with the direction that the assessee shall provide all the details to the Assessing Officer with regard to the recipients of the income and taxes paid by them. See Santosh Kumar Kedia Versus Income-tax Officer, Wd-56 (1) , Kolkata 2015 (6) TMI 123 - ITAT KOLKATA - Decided in favour of revenue for statistical purposes No deduction of TDS on account of transport charges - CIT(A) deleted the addition - Held that - It is not denied by the ld. D.R. that the assessee has submitted forms 15J in terms of Rule 29D read with second proviso of sect ion 194C(3)(i). In view of this fact, we do not find that this ground warrants our interference in the order of ld. CIT(Appeal s). - Decided against revenue. Unexplained investment - addition on account of capital gain - CIT(A) deleted the addition - Held that - It is a case where the value of asset s got decreased. It is not a case where the value of the assets increased so that it can be said that the assessee has made investment. The provisions of sect ion 69 are applicable to unexplained investment. The assessee has made investment s in the financial year, which were not recorded in the books of account and the assessee offers no explanation about the nature and source of the investment or the explanation offered by him is not in the opinion of Assessing Officer satisfactory. The decrease in the value of assets by no stretch of imagination can be regarded to be an investment. - Decided against revenue. Disallowance of diesel and petrol expenses - CIT(A) deleted part addition - Held that - It is not denied that the site office where the assessee is to carry out the work is too far away and is mainly in South Tripura. The assessee has to maintain vehicles and has to spend on diesel and petrol. The expenses so incurred do not exceed 6.5% approximately of the receipt. In our opinion, once the genuinity of the expenditure is proved, the onus is on the revenue to prove that the expenditure has not been incurred for the purpose of business especially when the expenditure has been incurred during the course of carrying on the business. Ld. CIT(Appeals), in our view, was justified in rest ricting the disallowance to 5% of the expenditure and it cannot be denied that some part of the expenditures might have not been wholly and exclusively incurred for the purpose of business - Decided against revenue. Undisclosed investment in Kotak Mahindra - CIT(Appeals) deleted the addition - held that - As in the Bank account statement of the assessee the amount of ₹ 1,04,800/- was shown as paid to M/s. Kotak Mahindra Bank Ltd. by itself does not establish that such amount was an investment. - Decided against revenue. Disallowance of motor car depreciation - CIT(A) deleted part addition - Held that - CIT(Appeals) has rightly held that the addition to motor car was, in fact, depreciation calculated at the rate of 15% on the opening balance of ₹ 1,37,236/-. Even the Assessing Officer did not make any comment in the remand report. We, therefore, confirm the order of ld. CIT(Appeal s) on this point - Decided against revenue.
Issues Involved:
1. Deletion of addition for non-deduction of tax on labor payment under section 40(a)(ia). 2. Deletion of addition for non-deduction of tax on payments to various parties under section 194C read with section 40(a)(ia). 3. Deletion of addition for non-deduction of tax on transport charges under section 40(a)(ia). 4. Deletion of addition on account of capital gain. 5. Deletion of addition on account of petrol and diesel expenses. 6. Deletion of addition for investment in "Kotak Mahindra". 7. Deletion of addition on account of motor car depreciation. Detailed Analysis: 1. Deletion of Addition for Non-Deduction of Tax on Labor Payment under Section 40(a)(ia): The Assessing Officer (AO) disallowed Rs. 3,29,05,000/- for non-deduction of tax, treating the payment to Shri Dilip Kumar Paul as to a sub-contractor. The Commissioner of Income Tax (Appeals) [CIT(A)] found that Shri Dilip Kumar Paul was an employee, not a sub-contractor, and the payments were for labor and site maintenance. The Tribunal upheld the CIT(A)'s decision, noting that the AO did not provide evidence contradicting the employee status of Shri Dilip Kumar Paul. Thus, the provisions of section 194C were not applicable. 2. Deletion of Addition for Non-Deduction of Tax on Payments to Various Parties under Section 194C Read with Section 40(a)(ia): The AO disallowed Rs. 30,98,000/- for vehicle and water charges, asserting these were covered by section 194C(2). The CIT(A) deleted the addition, stating there was no contract between the contractor and sub-contractor. The Tribunal agreed, citing that a contract, even if oral, must exist for section 194C to apply. The issue was restored to the AO to verify if the payees had paid taxes on the income received. 3. Deletion of Addition for Non-Deduction of Tax on Transport Charges under Section 40(a)(ia): The AO disallowed Rs. 1,08,55,000/- for non-deduction of TDS on transport charges. The CIT(A) deleted the disallowance, noting that the assessee had filed Form 15J as required under Rule 29D. The Tribunal upheld the CIT(A)'s decision, confirming the compliance with the filing requirements. 4. Deletion of Addition on Account of Capital Gain: The AO added Rs. 20,39,240/- as unexplained investment due to a decrease in asset value without corresponding receipts. The CIT(A) deleted the addition, stating that a decrease in asset value does not constitute an investment. The Tribunal agreed, confirming the CIT(A)'s order. 5. Deletion of Addition on Account of Petrol and Diesel Expenses: The AO disallowed 20% of diesel and petrol expenses, totaling Rs. 15,56,051/-, for lack of verification. The CIT(A) reduced the disallowance to Rs. 3,89,013/-, finding that the assessee maintained proper bills and vouchers. The Tribunal upheld the CIT(A)'s decision, noting the expenses were justified and related to business operations. 6. Deletion of Addition for Investment in "Kotak Mahindra": The AO added Rs. 1,04,800/- as undisclosed investment due to payments to Kotak Mahindra not shown in the balance sheet. The CIT(A) deleted the addition, stating the bank statement alone did not establish it as an investment. The Tribunal agreed, finding no error in the CIT(A)'s decision. 7. Deletion of Addition on Account of Motor Car Depreciation: The AO disallowed Rs. 3,088/- for motor car depreciation, considering it as an addition to the motor car. The CIT(A) clarified that the amount was depreciation on the opening balance of Rs. 1,37,236/-. The Tribunal upheld the CIT(A)'s decision, confirming the correctness of the depreciation claim. Conclusion: The Tribunal partly allowed the appeal for statistical purposes, affirming the CIT(A)'s decisions on most grounds, and restoring one issue for further verification by the AO. The judgments were based on thorough examination of records, compliance with tax provisions, and proper verification of evidence.
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