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TMI Blog2012 (10) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... Held that:- Disallowance of depreciation on vehicle is claimed on block of assets and with effect from 1.4.1989, the depreciation is claimed/allowed on block of assets and not on individual assets. Therefore, while confirming the findings of CIT(A) finding so far as depreciation on vehicle claimed is concerned, the AO is directed to delete the addition of Rs. 92,000/- from the total income - in favour of assessee. Liability of sundry creditors ceased to exist - addition u/s. 41(1) - Held that:- The assessee herself has admitted that the bills of KLB Fabricators and S.D.S Fabricators are over invoiced which itself prove that the assessee is not going to pay this amount. So far as liability of P&R Industries and PMB Engineering are concerned, the assessee has categorically stated that the companies have closed. Just because the assessee has given an assurance that these liabilities will be written back in A.Y. 2009-2010 will not exonerate the assessee as if liability has ceased to exist in the year under consideration, then it has to be added back in the year under consideration and not as per the assurance given by the assessee that it will be written back in A.Y. 2009-2010. No m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs. 14,17,559/- pertains to work contract between the assessee and the concerns which attracted the provisions of Sec. 194C of the Act and accordingly confirmed the addition of Rs. 14,17,559/- u/s. 40a(ia) of the Act. 6. Before us, the Ld. Counsel for the assessee strongly objected to the view taken by the Ld. CIT(A). The Ld. Counsel argued that the assessee is a contractor does not mean that all the payments made by it can be treated as payment to sub-contractors. The Ld. Counsel further pointed out that it is only from 1.6.2007 that individuals/HUFs were incorporated in the list of all specified persons who were to be treated as contractors. Prior to that and specifically from 1.6.2002 individual/HUF were made liable to deduct tax at the time of payment to sub-contractors if such individual/HUF come within the provisions of Sec. 44AB of the Act. The contention of the Counsel is that the assessee being an individual and a contractor is outside the provisions of Sec. 194C as there is no liability upon her to deduct tax at source. 7. The Ld. Departmental Representative strongly relied upon the order of lower authorites. 8. We have heard the rival submissions and peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to disallowance of expenses to the tune of Rs. 2,70,000/- under various heads of expenses. The AO has made an adhoc disallowances from the expenses claimed under the head site expenses, wages, vehicle expenses, transport expenses, travelling expenses, staff welfare, medical expenses, telephone expenses and depreciation on vehicle. 16. When the matter was agitated before the Ld. CIT(A), the CIT(A) observed that major portion of the expenses claimed under the above heads mentioned were incurred in cash with self made vouchers. However, considering the nature of work, the Ld. CIT(A) directed the AO to restrict the additions to 5% of the expenses claimed. 17. Before us, the Ld. Counsel submitted that the disallowance of 5% is on higher side considering the nature of business and the head of expenses. The Ld. DR supported the finding of the lower authorities. 18. We have considered the rival submissions. We find that the AO has made additions on adhoc basis under the account head discussed herein above. We do not find any reason to interfere with the findings of the Ld. CIT(A) who has restricted the total disallowance of 5% of the expenses. However, we also do not find any m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd accordingly made addition u/s. 41(1) of the Act. 23. Before the Ld. CIT(A), the assessee contended that all these liabilities would be written back in A.Y. 2009-2010 and therefore the additions made by the AO are pre-mature. The Ld. CIT(A) after considering the facts and the submissions came to the conclusion that provisions of Sec. 41(1) of the Act are clearly applicable as the expenditure has been allowed as deduction from the profits in earlier years to which they relate and as the benefit of deduction has already been claimed and now the assessee is not required to make payment in respect of these liabilities which means that there is a remission of liability and confirmed the finding of the AO. 24. Before us, the Ld. Counsel reiterated what has been stated before the lower authorities. The main contention of the Counsel was that all these liabilities have been written back in assessment year 2009-2010. The Ld. DR supported the finding of lower authorities. 25. We have considered the rival submissions. On going through the submissions made by the assessee before the AO, we find that the assessee herself has admitted that the bills of KLB Fabricators and S.D.S Fabrica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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