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TMI Blog2013 (2) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee received the services from Shri Dharmesh Sheth to become for such payments – Held that:- By considering the ‘principles of natural justice’ for verifying the genuineness of these documents as well as the contents mentioned therein, these documents must be remanded to the files of AO for examination and their use in deciding the relevant issues raised – In favour of assessee Disallowance u/s 40(a)(ia) – TDS - Amounts “payable” and to the sums already “paid” during the financial year - Held that:- Following the decision in case of Merilyn Shipping & Transports (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) that payments if made by the assessee before the end of the Financial Year, the same should not be disallowed invoking the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expense Mr. Bhavesh Sheth then it will lead to double taxation of the said amount. 2. The Ld CIT (A) erred in confirming the addition of Rs. 17,96,360/- towards professional fees which was already offered for tax leading to double taxation. The Ld CIT (A) erred in not giving finding for confirming the same. 3. The Ld CIT (A) erred in confirming the addition of Rs. 17,61,246/- towards professional fees which was offered for taxation leading to double taxation. The Ld CIT (A) erred in not giving finding for confirming the same. 4. The Ld CIT (A) erred in confirming disallowance of outstanding expenses of Rs. 62,246/- on the ground that the appellant followed cash system of accounting. 5. The Ld CIT (A) erred in confirming disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sheth for AY 2004-2005 to 2009-2010 and the written representation before the AO. Ld Counsel mentioned that all these information is absolutely required as they go into the core issue on the allowability of the professional fees paid by the assessee to Shri Dharmesh Sheth, the brother of the assessee. Further, he mentioned that these documents if admitted would assist for deciding the method of accounting regularly followed by the assessee in respect of professional fees as well as recipient Shri Dharmesh Sheth. Briefly mentioning that there is a problem with the Chartered Accountant, who audited the books of account of the assessee and signed on audit report and in Form No.3 CD u/s 44AB of the Act and mentioned that there errors crept in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to his brother on accrual basis and the Sri Dharmesh Sheth accounts the same on cash basis. The claim of the AO is that, under these factual context, the said amount is allowable only in AY 2011- 2012 and not in AY 2008-2009 as claimed by the assessee who follows the 'cash system of accounting' as mentioned the audit reports duly enclosed u/s 44AB of the Act. However, the claim of the assessee is that in fact, assessee follows the 'mercantile system of accounting' and audit report is erroneous to that extent and relied on the specific entries in the books of account as well as the assessment orders of the earlier as well as later assessment years where assessee's claim of mercantile system of accounting was accepted by the Revenue. So far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udication of the grounds. Accordingly, ground no.1 with sub-grounds is set aside. 7. Ground nos. 2 and 3 relate to addition of Rs. 17,96,260/- and 17,61,246/- paid towards professional fees. It is alleged that the taxation of these amounts tantamount to double taxation. During the proceedings before us, Ld Counsel mentioned that these grounds (2 & 3) were raised before the CIT (A) vide ground nos. 4 and 5 with its sub-grounds and the CIT (A) omitted to adjudicate the said grounds in a meaningful manner. In this regard, Ld Counsel brought our attention to para 2.3 of the CIT (A) order which does not contain adjudication on these additions. In this regard, both the parties agreed that these grounds must be set aside to the files of AO for wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said payments suffer TDS and relied on the relevant ledger accounts. Considering the absence of copies of TDS Certificates filed by the assessee, the Assessing Officer as well as CIT (A) confirmed the disallowance. However, this is a settled issue now that payments if made by the assessee before the end of the Financial Year, the same should not be disallowed invoking the provisions of section 40(a)(ia) of the Act merely for want of not making of TDS. Therefore, we are of the opinion that claim of the assessee is now covered by the said decision of the Special Bench in the case of Maryline Shipping and Transports Ltd (supra). Accordingly, ground no.5 is allowed. 10. Ground no.6 relates to disallowance of Rs.4,53,603/- invoking th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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