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TMI Blog2012 (10) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirming the addition of Rs.1,01,21,411/- out of total addition of Rs.1,35,62,524/- made by AO on account of nonpayment of TDS within specified time as per section 40(a)(ia). 2. On the facts and in circumstances of the case as well as law on the subject, the learned commissioner of Income-tax (Appeals) has erred in confirming the action of Assessing Officer in making addition of Rs.7,12,065/- on account of unexplained expenses. 2. Apropos to Ground No.1, facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of the Act dated 31.12.2007 were that the assessee in individual capacity is a civil contractor, therefore constructing buildings under the name and style of M/s.Capital Construction and M/s.Bhagwati Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ia) [sic.] r.w.s.194C on account of the said failure to pay the TDS before the prescribed time, henc43e disallowed the entire amount and made an addition of Rs.1,35,62,524/-. The matter was carried before the first appellate authority. 3. Before ld.CIT(A), it was informed that the amount had actually been deposited into the Government account before the due date of filing of the return and that the words used in section 40(ia) were "payable" and not "paid" therefore the said provisions did not apply on the facts of the case. However, CIT(A) was not convinced and held that the interpretation as advanced by ld.AR was not only a twisted interpretation but a perverse interpretation of the Statute. According to ld.CIT(A), the word "payable" ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010 and Dynamic Builders vs. ITO in ITA No.1625/Ahd/2008 (A.Y. 2005-06) dated 04/02/2011. Further, he has cited Special Bench Decision pronounced in the case of Merilyn Shipping & Transports, Visakhapatnam vs. Addl.CIT-Range-I, Visakhapatnam in ITA No.477/Viz./2008, A.Y. 2005-2006 [ITAT Visakhapatnam Special Bench]. On the other hand, from the side of the Revenue, ld.Sr.DR Mr.Raj Mehra has agitated that the nature of expenditure has first to be ascertained and if those are confirmed to be genuine and exclusively incurred for the purpose of the business, then only the provisions of section 40(a)(ia) are required to be applied and for this purpose this matter should go back to AO. 5. Having heard the submissions of both the sides, we are of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made deduction as required under law from time to time and in particular latest by 31.3.2005. This is clear from chart supplied by the assessee before CIT (Appeals) which would establish that deduction in case several contractors were made on 31.3.2005. All such amounts were deposited with the Government on or around 28.5.2005. In background of above undisputed facts, tribunal was of the opinion that by virtue of amended provisions of Section 40 (a)(ia) of the Income Tax Act, 1961, assessee has not breached the requirement of deduction and depositing of TDS. Section 40(a)(ia) of the Act as amended with effect from 1.4.2005 read as under: (ia) any interest, commission, or brokerage, (rent, royalty) fees for professional services or fees f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been made. "5. Addition on account of unverifiable expenses:- During the course of assessment proceedings, the assessee, vide his submission dated 27.08.2007, submitted expenses details exceeding Rs.50,000/-. Notices u/s.133(6) of the Act were sent on random basis to these parties. However, in the following cases, the notices were either returned unserved by the Postal Authorities or if served no reply was received from the concerned parties:- (i) Shah Trading Corpn. Rs.2,27,065 (ii) Mahendra Shah Rs.2,90,000 (iii) Sureshbhai (POP) Rs.1,95,000 In view of the above, the assessee was requested to furnish duly signed confirmations of above-named parties. However, the assessee failed to furnish required details in full." 7.1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, confirmed." 8. Having heard the submissions of both the sides, we have found that M/s.Shah Trading Corporation supplied the iron-goods to the assessee. The assessee has furnished the bills and amount has been paid through banking channel as it was corroborated by filing the bank statement. Next, with regard to Shri Mahendra Shah, it was informed that he happened to be a labour contractor. The payments have been made through account payee cheques and tax was also deducted at source. About the third party, Sureshbhai (POP) it was informed that he has supplied labour to the assessee. He has executed plaster of parries work. On payment, TDS was deducted. The entire payment was made through account payee cheque. Undisputedly, copies of bank ..... X X X X Extracts X X X X X X X X Extracts X X X X
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