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TMI Blog2013 (8) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of write off of sundry balance. In the result , no force in this ground of the Revenue. Hence dismiss. Disallowance made u/s 40(a)(ia) of the Act amounting to Rs.1,35,98,554/- without considering the fact that the payment of TDS was made into the government in contravention of the provisions of Section 200(1) of the Act, 1961 – Held that:- Relying upon the decision in the case of CIT Vs. Nestle India Ltd. [2005 (2) TMI 41 - DELHI High Court ], wherein it was held that Where assessee had deducted tax at source from royalty payment in the same financial year and deposited the same in the next financial year within limitation prescribed under Chapter XVII-B r.w.s. 200(1), no disallowance of royalty payment could be made by invoking Section 40(a)(i) - As per the amended provisions, if the payments have made before the due date of filing of the return then the same is allowable, ld. CIT(A) has not examined the each and every detail of payment and the corresponding dates of the deposit of T.D.S. - Remanded back to CIT(A) for the limited purpose to examine the dates of the deposits of the T.D.S. and if the same is as per the law as pronounced in the case law cited above then the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Arif, it was informed that rubble and sand was supplied. In respect of Mr. Sajjied, it was informed that a bill was issued in respect of supply of road material. The learned CIT(A) has examined those evidence and thereafter allowed the claim in the following manner:- "Findings: I have gone through the observations of the AO in the Assessment Order and Remand Report. I have carefully considered the submissions made by the learned A.R. The AO has made the additions out of the purchases on the ground that the bills were not having ST/CST numbers, the bills did not show the complete address and contact numbers of the parties, the bills appears to be self made, and description in the products appearing in the bills does not tally with the narration. The appellant has submitted the proof of address and other antecedents of the supplier along with the revenue recognition in the books of A/c. There is strength in the appellant's submissions that the purchases were for filling murom which is not taxable under sales tax. The industry has just started to pick up and there are no established parties in Uttaranchal with printed letterheads and bills. The Id AR of the Appellant has placed on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bt has really become bad and in fact the calim made by the assessee is bad debt or discount." 6.1 It was noted by the AO that the assessee had written off sundry balances of Rs.7,63,040/- in respect of following parties. Sl. No. Name of the Party Amount 1. Saicon Steel Pvt. Ltd. 2,82,116 2. Creative Textile Pvt. Ltd. 89,630 3. Creative Outwear Ltd. 2,42,505 4. TCPL 60,000 5. Descon Fibres Pvt. Ltd. 54,571 6. Sabri Co. 34,218 Total 7,63,040 6.2 The assessee's explanation was that in some of the cases the contract was completed in the past and the bills were raised but the payments were not made. On the other hand, the AO was of the view that in some of the cases certain payments were recovered by the assessee, therefore, it was not justified on the part of the assessee to write off an amount in respect of which the transaction were going on. According to the AO, part of the amount was also under the process of recovery; therefore, it was incorrect to write off the amount during the year. It has also been objected by the AO, in the case of Creative Textile Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of this expense." 9.1 The assessee has claimed expenditure under the head "Wages". The assessee was asked to produce the bills along with the attendance register. The assessee has failed to produce the wage register. In the opinion of the AO, there was a possibility for the inflation of the wages, hence, 15% of the "wages expenditure" was disallowed. Resultantly, an addition of Rs.20,49,400/- was made. 10. It was explained to the learned CIT(A) that wages debited to P L A/c were at Rs. 1,36,63,304/- under the head "Direct Cost". Month-wise details of the payments of the wages was provided at the time of assessment. The assessee has also maintained the monthly bills in respect of the wages. It was pointed out to learned CIT(A) that the AO had accepted the fact that the assessee had carried out substantial work during the year. Since the assessee was in the business of execution of contract work, therefore, the main expenditure of the assessee was towards payment of wages to the labours. The AO had made an ad-hoc disallowance although the turnover of the assessee had increased substantially. Considering all those aspects, learned CIT(A) has given the verdict in assessee's fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs.67,29,633/- in the hands of the assessee. 13. It was explained that the sundry creditors were mainly those persons who have provided goods or wages to the assessee. The assessee has made certain groups having identical facts out of the long list of the creditors. The group-wise explanation of the assessee was as under:- Group A: In this list, the balances were brought forward from the previous year; hence, there was no unexplained credit. Group B: In this list, transactions of purchases from those parties were made. Group C: Contains the list of sub-contractors through which business transaction was carried out. Group D: Contains the list of purchases made and the rejection of purchases of those parties. Group E: Contains the list of parties from whom the amount was received by cheques. 14. Learned CIT(A) has called for a remand report on the basis of the submissions of the assessee and after considering the replies relief was granted in the following manner:- "FINDINGS: I have gone through the rival submissions. The AO has made the additions on the basis of only one observation of non submission of confirmations of creditors. He has re-iterated the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uately. The minimum requirement the appellant need to satisfy here is that the confirmation of balances from those parties which the appellant had failed even at the appellate proceeding. In these circumstances I am in agreement with the action of the AO. Thus the plea of the appellant for grant of relief in this group amounts to Rs. 14,29,433/- is dismissed. 9.4.4 With regard to Group D consisting of two parties where the addition of the ^ balance in the account of an aggregate amount of Rs. 4,92,155/- has been made in addition to the disallowance of the entire principle amount of transaction of purchase from these two parties. These parties are already discussed at length in Ground no. 1. These additions thus stands deleted since the purchases are proven to be genuine as per ground no. i. Thus the appellant s relief of outstanding in this group amounts to Rs. 4,92,155/-, 9.4.5 With regard to Group E involving one party of Rs. 2,87,417/-, the appellant has submitted that a confirmation from the party is since procured. The addition was made on the single point of non receipt of confirmation. The AO has not commented adversely on the Confirmation since procured in the remand repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 01.05.2006 Rs.2,2058,308/- Rs.2,25,000/- Perusal of the annexure consisting the details of payments to sub contractor, amounting to Rs.1,71,55,890/-, revealed that only payments to the tune of R.39,66,698/- were made/party's accounts were credited in the month of march, 2006. Remaining payments of Rs.1,31,89,192/- were made up to 28.02.2006 and hence TDS on such payments should have been paid into the government account on or before 31.03.2006, as per the provisions of section 2000(1) of the Act. In the present case, the entire TDS of Rs.1,75,000/- has been paid on 01.05.06 and hence the provision of section 40(a)(ia) are clearly attracted in the case of the Assessee to the tune of Rs.1,31,89,192/-. Similarly, no TDS is made on the payment of Rs.4,09,362/- [2,24,67,670 - 2,20,58,308]. In view of the above facts, this addition may kindly be decided on merits." 19. After considering the explanation of the assessee, learned CIT(A) has held as under:- "I have gone through the rival submissions. It is important to note here that the section 40(a)(ia) was amended retrospectively between the passing of the Assessment order and this da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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