2015 (11) TMI 1820 - AT - Income Tax

TDS u/s 194C - disallowance of payment of liquidated damages on account of non-supply of material - Addition 40(a)(ia) - HELD THAT - We are of the considered view that let the AO examine the details of recipients of liquidated damages, which are to be filed by assessee and in case these receipts are included in their respective return of income and paid taxes thereon, the AO will delete the disallowance made u/s. 40(a)(ia) of the Act in view of the decision in the case of Ansal Land Mark township (P) Ltd. 2015 (9) TMI 79 - DELHI HIGH COURT - Assessee s appeal is allowed for statistical purposes. Disallowance of interest - interest was earned by the assessee from the loan advance made to Director and Group concern - HELD THAT - As assessee stated that there are interest received and also interest paid on these amounts and there are no interest free loans. Assessee tried to file details but these are new evidence but he requested that let this issue be set aside to the file of AO for fresh examination. On query from the Bench, Ld. Sr. DR has not objected to the proposal. In view of the above facts and circumstances, we set aside this issue to the file of AO to re-decide the issue after taking into consideration the details filed by the assessee whether the assessee has received interest and paid interest also. In view of the above, the AO will re-decide accordingly. Addition of difference in stock found during the course of survey - HELD THAT - AO has not gone into the reconciliation statement filed by assessee vide letter dated 17.12.2008, whereby the complete stock statement as on the date of survey i.e. 27.12.2005 was filed. Even the CIT(A) without going into the issue of reconciliation confirmed the addition. In view of the above fact, we are of the view that reconciliation should have been considered by the lower authorities and accordingly, we set aside this issue to the file of AO for fresh adjudication after considering the reconciliation. This issue of assessee s appeal is allowed for statistical purposes.

Summary

Issues:
1. Disallowance of payment of liquidated damages for non-deduction of TDS under section 40(a)(ia) of the Income-tax Act.
2. Disallowance under section 40(a)(ia) for payment made to various parties.
3. Disallowance of interest amount.
4. Addition of difference in stock found during a survey.

Analysis:
1. The first issue concerns the disallowance of payment of liquidated damages due to non-deduction of TDS under section 40(a)(ia) of the Income-tax Act. The appeal was made against the order of CIT(A) confirming the disallowance. The assessee admitted liability but requested a remittance to the AO for verification if recipients included the amount in their income. The Tribunal allowed the appeal for statistical purposes, citing a relevant decision of the Delhi High Court.

2. The second issue pertains to disallowance under section 40(a)(ia) for payments to various parties. The assessee did not press this issue during the hearing, and the Senior DR did not object. Consequently, the issue was dismissed as not pressed.

3. The third issue involves the disallowance of interest amount. The AO disallowed interest based on loans given to specific individuals and entities. The CIT(A) upheld the AO's decision. The Tribunal noted discrepancies in the interest received and paid, and on the assessee's request, remitted the issue back to the AO for fresh examination, considering new evidence presented.

4. The final issue concerns the addition of the difference in stock found during a survey. The CIT(A) confirmed the addition without considering the reconciliation statement filed by the assessee. The Tribunal found this oversight and remitted the issue to the AO for reevaluation after considering the reconciliation. The appeal was allowed for statistical purposes.

In conclusion, the Tribunal partially allowed the assessee's appeal, remitting certain issues back to the AO for further examination and consideration of additional evidence and reconciliation statements.