9911796707
TMI Blog2015 (2) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) allowed the claim - Held that:- CIT(A) following the decisions of his predecessors in the assessee’s own case for earlier years 2004-05 to 2005-06 deleted the addition. As the assessee company had made payment for the vehicles and it is also reflected in the books of the company. Further, the vehicles were used for the purpose of the business of the assessee company, no reason to interfere with the order of the learned CIT(A).- Decided against revenue. Disallowance made u/s 40(a)(ia) - Non deduction of tds before making the payment for packing materials - Held that:- The purchases on account of plastic trays, cups, spoons and plastic dishes etc. which did not carry the logo of the assessee and were in the nature of purchases. The purchases were of standardized material available in market. These submissions of the assessee could not be controverted by the Revenue by bringing any material evidence on record. We are, therefore, of the view that the purchases made by the assessee from the aforesaid three parties cannot be considered as being a case of contract which would require deduction of TDS u/s 194C of the Act and, therefore, no disallowance u/s 40(a) (ia) of the Act is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r be restored. 4. Ground No.1 of the appeal is with respect to addition of gross profit. During the course of assessment proceedings the assessee was asked to produce month-wise sales, item-wise break-up of purchase and consumption of raw materials, production, sales of finished goods and closing stock for the current year as well as two preceding assessment years. The assessee submitted only monthwise break-up of purchases and sales, stock statement for 3 months for the period April, 2005 to June, 2005. The assessee did not submit any stock register. On the basis of stock statement submitted to the bank for the period April, 2005 to June, 2005 the AO worked out the discrepancy of closing stock. The assessee was asked to explain as to why the sales should not be estimated on same line of assessments made in earlier years in the absence of any stock register, sales register etc. The AO noted that the submission made by the assessee during the course of assessment proceedings for the assessment year 2005-06 may be considered in this respect. The AO thus following the ratio adopted in earlier years and relying on the orders estimated the sale at ₹ 5 Crores as against ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company remained sealed from 27/4/2005 to 25/6/2005 due to the order of the Gujarat High Court and therefore, there was absolutely no sales of Food Court during this period and this has resulted into a lower sales during the year by ₹ 26.82 lacs as compared to preceding previous year. Therefore, there are valid reasons for fall in sales during the year. Considering the reasons for fall in the sales and keeping in view of the estimate made by the Tribunal in earlier years, I am of the considered view that it is reasonable to estimate the sales at ₹ 3.75 crores. Therefore, A. O. is directed to consider the sales at ₹ 3.75 crores as against the sales of the appellant company as per books of ₹ 3,52,48,694/-. This ground is accordingly partly allowed. Aggrieved by the order of the learned CIT(A), the Revenue is now in appeal before us. 5. Before us, the learned DR relied on the order of the AO. On the other hand, the learned AR submitted that no evidence has been brought on record by the AO indicating that the sales have been made by the assessee company outside the books of accounts. He further submitted that the book of accounts of the assessee compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors of the assessee company. He was of the view that since the ownership of the assets does not belong to the assessee, the assessee is not entitled to claim depreciation. He, accordingly disallowed the claim of depreciation of ₹ 1,45,000/-. Aggrieved by the order of the AO the assessee carried the matter before the learned CIT(A). 8. The learned CIT(A) following the decisions of his predecessors in the assessee s own case for earlier years 2004-05 to 2005-06 deleted the addition. Aggrieved by the order of the learned CIT(A), the Revenue is now in appeal before us. 9. Before us the learned DR supported the order of the AO. On the other hand, the learned AR has submitted that the assessee company had made payment for the vehicles and it is also reflected in the books of the company. Further, the vehicles were used for the purpose of the business of the assessee company. He further submitted that for assessment years 2004-05 and 2005-06 the addition was deleted by the learned CIT(A) relying on the decision of the ITAT in the case of Ambuja Synthetics Mills Pvt. Ltd. Vs DCIT dated 29-01-2004. He thus supported the order of the learned CIT(A). 10. We have heard the rival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,90,661/- u/s. 40a(ia) of the Act. The impugned disallowance thus requires to be cancelled/deleted. 13. The issue involved in grounds No.1 and 2 of the Cross Objection of the assessee and ground No.1 of the appeal of the Revenue is identical. Since we have decided this issue against the Revenue while adjudicating Revenue s appeal as aforesaid, both the grounds No.1 and 2 raised by the assessee in its Cross Objection are allowed in its favour. 14. Ground No.3 of the assessee s Cross Objection relates to confirmation of addition on account of disallowance made u/s 40(a(ia) of the Act for ₹ 1,90,661/-. During the course of assessment proceedings the AO noticed that the assessee had debited packing material expenses of ₹ 4,18,794/-. He further noticed that the assessee got the packing materials printed with its Logo as well as the name and address of its branches and phone numbers etc. It was also noticed by the AO that the assessee had made payment in respect of packing materials exceeding ₹ 50,000 to three parties namely Sr. No. Name of parties Amount (in Rs.) 1 Pree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... keting. The materials purchased did not carry any Logo of the company and were of standard size available in the market. These purchases did not constitute any contract with the said parties; hence, the assessee was not liable to deduct TDS from the payment made to them. The learned DR on the other hand, supported the order of the AO and the learned CIT(A). 17. We have heard the rival submissions and perused the materials on record. The assessee before us submitted that the purchases aggregating to ₹ 1,90,661/- is on account of plastic trays, cups, spoons and plastic dishes etc. which did not carry the logo of the assessee and were in the nature of purchases. The purchases were of standardized material available in market. These submissions of the assessee could not be controverted by the Revenue by bringing any material evidence on record. We are, therefore, of the view that the purchases made by the assessee from the aforesaid three parties cannot be considered as being a case of contract which would require deduction of TDS u/s 194C of the Act and, therefore, no disallowance u/s 40(a) (ia) of the Act is called for. We, therefore, direct the AO to delete the addition mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
