2022 (3) TMI 66 - AT - Income Tax

Addition u/s 40(a)(ia) - Non deduction of TDS - CIT(A) has held that though the assessee had claimed that the said payment was in fact reimbursement of expenditure to the concerned party, however no evidence was brought on record to prove that contention - HELD THAT - There is nothing on record which suggested that the TDS was deducted by the associated company. This facts does not come out from the order of the AO. The A.R. of the appellate also did not field any submission and evidences during the appellate proceeding in the matter. The A.R. only stated that he rely on - CIT(A) has held that though the assessee had claimed that the said payment was in fact reimbursement of expenditure to the concerned party, however no evidence was brought on record to prove that contention - we do not find any reason to interfere with the above finding of the Ld. CIT(A). Hence, ground No. 1 of the appeal is dismissed. Disallowance of liquidated damages - As per CIT-A the said expenditure was not incurred by the assessee for the purpose of business of the assessee, rather the said damages were paid because of the violation of the terms of the contract - HELD THAT - A.O. has pointed out that there is payment of damage and it is on violation of terms of the contract. When it is violation of contract terms and conditions than it is very much penal in nature and accordingly, the A.O. has taken correct view in the matter - We also agree with the view as taken by the A.O. in the matter. Keeping in view of above, in the absence of any cogent material evidence,no infirmity in the order of the assessing officer and the same is hereby upheld. In view of above, the appeal of the appellant is dismissed - we do not find any reason to interfere with the above finding of the Ld. CIT(A) and the same are upheld. Hence, ground No. 2 of the appeal is dismissed. Estimated disallowance being at the rate of 50% of the expenditure claimed under the head Indo Trailer Exp-Market Load - CIT(A) in the impugned order has observed that the assessee had claimed that the aforesaid expenditure was made in cash and that no bills, vouchers, evidences/confirmation etc. were furnished to prove that the said expenditure was actually incurred by the assessee - HELD THAT - Since, neither anyone has appeared nor any document has been furnished to show the veracity of the aforesaid expenditure, we therefore are not inclined to interfere with the order of the Ld. CIT(A) on this issue also. In view of this, we do not find any merit in the appeal of the assessee and the same is accordingly dismissed. Assessee appeal dismissed.

Summary

Issues:
Appeal against order of CIT(A) for AYs 2012-13 & 2013-14; Disallowance of depot expenses for non-deduction of TDS; Disallowance of liquidated damages; Estimated disallowance of expenses under "Indo Trailer Exp-Market Load".

Issue 1: Disallowance of Depot Expenses for Non-Deduction of TDS
The assessee contested the disallowance of ?16,73,566 made by the AO under Section 40(a)(ia) for non-deduction of TDS. The CIT(A) upheld the disallowance as no evidence proved the reimbursement claim. The Tribunal concurred, stating the absence of material evidence justifying interference, thus dismissing the appeal.

Issue 2: Disallowance of Liquidated Damages
The assessee challenged the disallowance of ?21,17,589 as liquidated damages. The CIT(A) and AO confirmed the disallowance due to contractual violation without evidence of business purpose. The Tribunal upheld this decision, finding no reason to interfere, leading to the dismissal of the appeal.

Issue 3: Estimated Disallowance of Expenses
The assessee contested the estimated disallowance of ?96,42,968 under "Indo Trailer Exp-Market Load." The AO disallowed 50% due to lack of evidence for cash expenses. The CIT(A) upheld this, emphasizing the absence of material evidence. The Tribunal found no veracity or justification presented, upholding the CIT(A)'s decision and dismissing the appeal.

In conclusion, with identical issues for AY 2013-14, both appeals were dismissed by the Tribunal due to the lack of substantiating evidence and failure to meet legal requirements, as highlighted in the respective judgments.