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TMI Blog2014 (12) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 194C(2) - the assessee was not at default for deduction of tax at source - It cannot be held that, despite receiving Form 15-I from the parties, assessee should have ignored these forms and deducted tax - no disallowance u/s 40(a)(ia) can be made – Decided against revenue. Bogus purchases in contravention of section 102 of Evidence Act or not – Held that:- Neither the purchases could be confirmed nor the assessee could file any confirmation or details from such a party - This itself was a good ground for rejecting the book result as the purchase was not verifiable – the AO has rightly made the addition after applying GP rate of 5% - as the assessee has failed to discharge his primary onus of filing the confirmation, the order of the CIT(A) is upheld – Decided in favour of revenue. - ITA No. 4603/Mum/2011 - - - Dated:- 28-11-2014 - Shri D. Karunakar Rao And Shri Amit Shukla,JJ. For the Petitioner : Shri Ashok J. Patil For the Respondent : Shri Akhilendra Yadav ORDER Per Amit Shukla, JM: This appeal has been preferred by the Revenue against order dated 31.03.2011, passed by the Ld.CIT(A) -34, Mumbai, for the quantum of assessment passed u/s 143( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted. The AO s contention was further that the assesse was required to furnish Form No. 15-J to the prescribed income tax authority on or before 30th June after the expiry of the financial year, when the assesse had received the Form No. 15I. Since the assesse has not complied with the said provision, section 194C automatically gets attracted that accordingly he made the disallowance on account of transportation charges of ₹ 23,00,354/- u/s 40(a)(ia). 3. Further while scrutinizing the accounts of M/s. Abhiraj Sales Corporation, the assessing officer had issued notices u/s 133(6) to various parties from whom the assesse had made purchases. In response, certain parties filed their details, however, in respect of purchase amount of ₹ 22,31,182/- from M/s. Gallant Traders Pvt. Ltd., the notice was returned back. The assesse also failed to file any confirmation. Again a notice u/s 133(6) was sent through Income-tax Inspector, who vide letter dated 04.11.2009, submitted the following report:- In respect of M/s. Gallant Traders Pvt. Ltd 1st Floor, 4th Chawl Cross Lane, Kalbadevi, Mumbai- 400 002 Dt. 04.11.2009 With reference to the above as per your direction, I al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e subcontractors/transporters for the transportation charges then as per the law the assesse was required to deduct TDS u/s 194C. Regarding filing of Form 15-I by the parties, he submitted that the assesse was then further required to furnish Form 15-J to the Commissioner of Income Tax as per the requirement of the rules. Since the statutory requirement was not fulfilled, therefore, it will not absolve the assesse from the provisions of section 194C and consequently u/.s 40(a)(ia). Regarding deletion of ₹ 1,11,559/-, he submitted that the assessing officer not only sent the notice u/s 133(6) but also deputed ITI, who had submitted a report that the address provided by the assesse was not correct and therefore, such a party could not be traced. The assesse himself has admitted before the AO that GP rate should be applied on such purchases, which has been done by the AO. Now how the assessee can say such purchase was genuine. Thus the finding of the Ld.CIT(A) cannot be sustained on these facts. 6. Before us, the learned counsel for the assesse submitted that the assesse had made the payment to the transporters on random basis without any contract with them. These transporter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made from the amount of any sum credited or paid or likely to be credited or paid to the subcontractor during the course of business of plying, hiring or leasing goods carriages, on production of a declaration to the person concerned paying or crediting such sum in the prescribed form and verified in the prescribed manner within the time as may be prescribed, if such sub-contractor is an individual who has not owned more than two goods carriages at any time during the previous year. 7. The exclusion provided in sub-so (3) of s. 194C from the liability to deduct tax at source under sub-so (2) would thus be complete the . moment the requirements contained therein are satisfied. Such requirements. principally. are that the sub- contractor. recipient of the payment produces a necessary declaration in the prescribed format and further that such subcontractor does not own more than two goods carriages during the entire previous year. The moment such requirements are fulfilled. the liability of the assessee to deduct tax on the payments made or to be made to such sub-contractors would ease. In fact he would have no authority to make any such deduction. 8. The later portion of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the perusal of the assessment order, we find that the assessing officer has made detail inquiry to verify the genuineness of the purchase of ₹ 22,31,182/- made from M/s. Abhiraj Sales Corporation. Such an inquiry included, sending of notice u/s 133(6) on the address given by the assessee and also by deputing the ITI for verifying the transaction. On such an inquiry, neither the purchases could be confirmed nor the assessee could file any confirmation or details from such a party. This itself was a good ground for rejecting the book result as the purchase was not verifiable. Even the assessee before the assessing officer, admitted that appropriate GP rate may be considered in respect for such purchases for making the addition. The assessing officer on these facts has rightly made the addition after applying GP rate of 5% of ₹ 22,31,182/-. The reasoning of the Ld.CIT(A) by putting the entire onus upon the assessing officer to prove the genuineness of the transaction is not correct, as the assessee has failed to discharge his primary onus of filing the confirmation. Thus, the finding of the Ld.CIT(A) is reversed on this score and the addition made by the AO of ₹ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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