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2017 (5) TMI 1216 - AT - Income TaxAddition made as undisclosed receipts - Held that - As observed from the remand report as discussed by the CIT-A that amount of 6, 49, 210/- was credited to assessee s account on 31-03-08 and other amount of 9, 554/- came into account of the assessee on 31-03-08. The findings show that both the said amounts came into account of the assessee in the asstt. year under consideration. But the AO found that the said amounts were not entered into books of the assessee. It appears that the submissions made by one of the partners Mr. Amit Baran Roy the cheque was received by the assessee on 6-4-08 is incorrect. We find that the AO has rightly held that both the amounts were not entered in the books of account for the A.Y under consideration. The CIT-A confirmed the same which is justified. - Decided against assessee Addition u/s. 68 - Held that - AR of the assessee did not file anything to suggest that the entire amount cannot be added. In the absence of any evidence to substantiate the claim/contention we find no force in the arguments of the ld.AR. Therefore the arguments advanced the by the ld.AR of the assessee are rejected. In view of above discussion we uphold the impugned order of the CIT-A. Non deduction of TDS u/s. 194C and 194I - Held that - The labour sardars are not suppliers of labour and as such he rightly deleted the impugned addition made u/s. 40(a)(ia) of the Act. Therefore we delete the addition made by the AO and confirmed by the CIT-A. TDS on Hire charges - Held that - We find that the assessee is a sub-contractor to M/s. Pobi Technologies 4, 36 693/- to the file of AO.
Issues Involved:
1. Addition of undisclosed receipts. 2. Addition under Section 68 of the Income Tax Act, 1961. 3. Addition under Section 40(a)(ia) for non-deduction of TDS under Section 194C. 4. Addition of expenses. 5. Addition under Section 40(a)(ia) for non-deduction of TDS under Section 194-I for machinery charges. Detailed Analysis: 1. Addition of Undisclosed Receipts: The assessee received ?6,49,210 from Ion Exchange (India) Limited and ?9,554 from M/s Pobi Technologies and Constructions Pvt. Ltd., which were not shown in the gross contractual receipts. The AO issued a notice under Section 133(6) to Ion Exchange India Ltd., which confirmed the receipt and issued a TDS certificate. Contradictory statements from the partners led to the addition of ?6,49,210 and ?9,554 to the total income. The CIT-A upheld the addition, noting that the amounts should have been accounted for in the income for AY 2008-09 as per the mercantile system of accounting. The Tribunal found that the AO rightly held that both amounts were not entered into the books for the AY under consideration and dismissed the assessee's ground. 2. Addition under Section 68: The AO found cash payments recorded in the books of the assessee from M/s Indure Pvt. Ltd and M/s Pobi Technologies & Constructions Pvt. Ltd., which were claimed as advances returned in the same year. The said parties denied making any cash payments to the assessee. The CIT-A upheld the addition of ?35,24,438, rejecting the assessee's claim of data corruption in the computer system and noting that the cash receipts were meticulously kept below ?20,000 to bypass legal provisions. The Tribunal found no force in the assessee's arguments and upheld the CIT-A's order, dismissing the ground. 3. Addition under Section 40(a)(ia) for Non-Deduction of TDS under Section 194C: The AO found that the assessee made payments to labor suppliers without deducting TDS under Section 194C. The CIT-A confirmed the addition of ?9,02,950, noting that the assessee maintained separate ledger accounts for each labor supplier, indicating some contract. The Tribunal, following judicial precedents, found that there was no contract between the assessee and labor sardars, and deleted the addition made under Section 40(a)(ia). 4. Addition of Expenses: The AO disallowed ?10,55,878 for non-production of evidence and addresses of labor suppliers. The CIT-A upheld the disallowance, noting that the assessee did not produce any evidence reconciling the amount with total charges debited in the profit & loss account. The Tribunal, following judicial precedents, found that the labor sardars were not suppliers of labor and deleted the addition made under Section 40(a)(ia). 5. Addition under Section 40(a)(ia) for Non-Deduction of TDS under Section 194-I for Machinery Charges: The AO added ?7,72,957 for non-deduction of TDS on payments to M/s Pobi Technologies & Constructions Pvt. Ltd. The CIT-A confirmed the addition, noting that the assessee had no scope to affect TDS as the hire charges were deducted by the said concern. The Tribunal restored the issue to the AO for fresh examination. 6. Addition of ?4,36,693 for Non-Deduction of TDS under Section 194-I for Machinery Charges: The AO added ?4,36,693 for non-deduction of TDS on machinery hire charges. The CIT-A confirmed the addition, noting that the assessee did not bring on record to show that TDS was deducted. The Tribunal restored the issue to the AO for verification. Conclusion: The Tribunal dismissed the grounds related to undisclosed receipts and addition under Section 68. It deleted the additions under Section 40(a)(ia) for non-deduction of TDS under Section 194C and allowed the grounds related to labor sardars. The issues related to machinery hire charges and non-deduction of TDS under Section 194-I were restored to the AO for fresh examination. The appeal was partly allowed for statistical purposes.
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