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TMI Blog2014 (12) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal has merely restored the matter to the AO by asking him to verify the transactions and if found to be correct, pass orders and held that the appeal is in relation to the disallowance made out of payments of labour charges paid for non-deduction of tax at source under the provisions of section 194C of the Act - disallowance was made by invoking the provisions of section 40(a)(ia) – in ACIT Vs. Merilyn Shipping & Transports [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] it has been laid down that where the amounts have been paid during the year under consideration itself and nothing is payable at the close of the year, no disallowance was warranted u/s 40(a)(ia) of the Act for non-deduction of tax at source out of such amount paid during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D 23 (SB) (Vishakhapatnam)} that the disallowance u/s 40(a)(ia) is to be made only in respect of payments which are outstanding at the end of financial year and payment of which is without deduction of tax (after end of Financial Year). iii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in deleting the addition of ₹ 8,04,948/-, though the same had been shown by the assessee under the sub-head 'work-in-progress' and has not been reflected in the Trading Account. Before dealing with the submissions made by counsel for the revenue, it would be appropriate to delimit the facts in brief. The assessee is a civil contractor and during assessment year 2008-09, filed a return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Tribunal has not assigned any reason for applying a net profit rate of 6% particularly when the assessing officer has after due consideration of the facts given reasons for applying a net profit rate of 12%. As regards addition on account of failure to deduct tax at source, it is contended that as Section 40(a)(ia) of the Act is mandatory and does not admit to any exception, the opinion recorded by the Tribunal, to the contrary is against the statue and must, therefore, be set aside. As regards question No.3, it is submitted that neither the CIT(A) nor the Tribunal have assigned any reason for deleting the addition made on account of work in progress. We have heard counsel for the appellant, perused the impugned order as well as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the provisions of section 40(a)(ia) of the Act. The Special Bench of Vishakhapatnam reported in ACIT Vs. Merilyn Shipping Transports [136 ITD 23 (SB) (Vishakhapatnam)] had laid down the principle that where the amounts have been paid during the year under consideration itself and nothing is payable at the close of the year, no disallowance was warranted under section 40(a)(ia) of the Act for non deduction of tax at source out of such amount paid during the year. Following the above said parity of reasoning, we direct the Assessing Officer to verify the stand of the assessee and in case the said amounts have been paid by the assessee during the year under consideration, no disallowance is warranted out of said payments in line with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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