9911796707
TMI Blog2014 (11) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... mission payable .. Rs. 20,54,038/- iii Addition under interest receivable ... Rs. 32,02,889/- iv Addition under the head loan ... Rs. 6,99,383/- 2.2 Aggrieved by the order of assessment for assessment year 2006-07, dated 28-11-2008, the assessee preferred an appeal before the CIT(A)-I, Bangalore. The ld.CIT(A) examined the issues raised in the appeal and called for a remand report from the Assessing Officer on the submissions made and details filed by the assessee. The ld.CIT(A) disposed of the assessee's appeal by order dated 31-12-2012 allowing the assessee partial relief by deleting the additions/disallowances of the items listed at Sl.Nos.(i) and (iii) at para.2.1 of this order and restricting the disallowance made at Sl.No.(ii)(supra) to Rs. 80,000/-. 3. Aggrieved by the order of the CIT(A), Bangalore, dated 31-12-2012 for assessment year 2006-07, the Revenue is in appeal before this Tribunal raising the following grounds:- "1. The order of the learned CIT(Appeals) in so far as it is prejudicial to the interest of revenue, is opposed to law and facts and circumstances of the case. 2. The CIT(A) erred in deleting the disallowance of Rs. 1,02,47,691 being 20% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r book containing details in this regard. 4. We have heard the rival contentions and perused and carefully considered the material on record and we proceed to dispose of the various issues as under: 5. The grounds raised by the Revenue at Sl.No.1, 11 and 12 being general in nature, no adjudication is called for thereon. 6. Disallowance towards payments for job works, salaries and wages (ground Nos.2 to 6): 6.1.1 In the course of assessment proceedings, the Assessing Officer observed that the assessee had debited an amount of Rs. 5,21,38,455/- towards job works, salaries and wages - comprising of Rs. 30,66,291/- towards job work charges and Rs. 4,90,72,164/- towards salaries and wages. According to the Assessing Officer, the assessee was not able to substantiate the claim of expenses with documentary evidence like Payroll register, PF and ESI payments, details of TDS, service contracts and sources of funds etc., and therefore disallowed 20% of the expenses claimed. Accordingly, the Assessing Officer disallowed an amount of Rs. 1,02,47,691/- being 20% of the total expenses claimed amounting to Rs. 5,21,38,455/-. 6.1.2 In response to the query raised regarding the source of funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that out of the job work charges, the assessee has claimed only an amount of Rs. 30,66,291/- as expenses in the profit and loss account whereas the Assessing Officer has disallowed the amount of Rs. 2,75,78,763/- shown as outstanding in the balance sheet of the assessee. As rightly pointed out by the ld.CIT(A), only the amount claimed as an expense in the profit and loss account can be considered for disallowance and not the amount shown as outstanding in the balance sheet. 6.3.3 In view of the facts and circumstances of the case, as discussed above, we are of the considered opinion that it will be in the fitness of things for this issue to be remanded back to the file of the Assessing Officer for a de-novo examination of the issue and to render a clear and elaborate speaking order/finding as to the allowability of expenses claimed towards payments for job works, salaries and wages in the light of our observations and after affording the assessee adequate opportunity of being heard and to file details required while deciding the issue afresh. It is ordered accordingly. 7. Interest on advances receivable (ground Nos.8 to 10): 7.1 In the course of assessment proceedings, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and duly considering the same. It is ordered accordingly. 8. Commission payable (ground No.7): 8.1 In the course of assessment proceedings, the Assessing Officer observed that an amount of Rs. 20,54,038/- appeared in the assessee's accounts as the opening balance of commission payable as on 1-4-2005 to the following related parties: i) M/s.Mandhana Exports ... Rs.19,56,990/- ii) M/s.S.R.Enterprises ... Rs. 97,048/- Total Rs.20,54,038/- The assessee was asked to furnish details and evidence to substantiate the claim of commission with respect to services rendered, work order, amount of business generated for the commission, invoices raised in this regard etc., According to the Assessing Officer, the assessee was unable to substantiate the claim and he therefore disallowed the entire opening balance of commission amounting to Rs. 20,54,038/-. 8.2 On appeal, the ld.CIT(A) on verification of the details on record, observed that the assessee had actually claimed an amount of Rs. 80,000/- as brokerage, whereas the Assessing Officer had disallowed an amount of Rs. 20,54,038/- which was reflected in the balance sheet as the opening balance as on 1-4-2005 under the head ' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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