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TMI Blog2015 (7) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... instead of unsecured loan included in the liabilities of the balance sheet’, we do not find any infirmity in the order of ld CIT(A) to interfere as the AO has clearly accepted the assessee’s contention after due verification. Ld CIT(A) deleted the addition relying on the findings of the Assessing Officer in the remand report, wherein, he has clearly stated that all payments were made on different dates and to different persons, which are below ₹ 20,000/- and, therefore, provisions of section 194C were not attracted. We do not find any reason to interfere with the order of ld CIT(A). Hence, Ground No.3 is rejected. Scope of section 194C - We find that ITAT Delhi Bench in the case of Mrs Kanak Singh in [2015 (7) TMI 69 - ITAT DELHI] order dated 19.9.2014 held that it is to be noted that for disallowing expenses from business and profession on the ground that TDS has not been deducted, the amount should be payable and not which has been paid by the end of the year. We do not find that the Tribunal has committed any error in recording the finding on the facts, which were not controverted by the department and thus the question of law as framed does not arise for considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Ld. CIT(A) is not justified in deleting the addition of ₹ 28,60,000/- and ₹ 10,00,000/- made on account of discrepancy in the balance sheet regarding unsecured loans claimed. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in deleting the addition of ₹ 9,75,000/- made by the AO u/s.69C. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in deleting the addition of ₹ 1,55,000/- made by the AO u/s.40(a)(ia). 4. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in accepting the contentions of the assessee in violation of Rule 46A of the I.T. Rules, when the remand report of the AO was not comprehensive and the same was not binding upon the Ld. CIT(A). 5. Brief facts apropos Ground Nos.1 2 are that in the course of assessment proceedings, the Assessing Officer observed that another file under scrutiny for assessment year 2008-09 was of M/s. Anand Exports. In the course of study of bank book of Anand Exports, it was found that this party had made loans and advances' to the assessee. However, the figure for unsecured loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, with the remand report of the AO clearly substantiating the contentions of the assessee that these amounts have been shown in the balance sheet, I agree with the view of the AO given in the remand report that these additions are not sustainable. Similarly, the hire charges payable of ₹ 9,75,000/- is again clearly a part of the balance sheet and the addition was due to the fact that because of typographical omission of this amount in the balance sheet. However, this amount is part of the liabilities in schedule - 4 amounting to ₹ 1,01,31,350/- as verified by the AO during remand and, accordingly, the addition of ₹ 9,75,000/- is also not sustainable. Thus, the additions of ₹ 28,60,000/-, ₹ 10,00,000/- and ₹ 9,75,000/- are deleted and the ground No.5 is, thus, decided in favour of the appellant. 9. In view of the findings of the Assessing Officer in the remand report, inter alia, that ..on verification of the same, it was found that the total figure of ₹ 41,71,000/- shown under the head advance from customers in the balance sheet as at 31.3.2008 includes the sum of ₹ 28,60,000/- . now it can be concluded that instead of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sahoo U/s.40(a) (ia) of the Act is out and out illegal, since, the said payment made as advance to the said employee towards payment of expenses and the individual entry in the ledger is the conglomeration of several vouchers of below ₹ 20,000/-, thereby, the TDS provision is not attracted to this expenses. Hence this disallowance may kindly be allowed for the interest of justice. 3. For that, the disallowances of expenses of ₹ 78,100/- U/s. 40 (a) (ia) is arbitrary since the individual debit entry in the ledger is the conglomeration of several vouchers of below ₹ 20,000/- and as such the TDS provision is not attracted and liable to be allowed. 4. For that, the disallowance of expenses of ₹ 10,00,000/- payment made to subcontractor M/s. S.S. Builders, U/s. 40 (a) (ia) is illegal and non-application of mind, since the authorities below failed to appreciate the fact that, the total balance to the credit of S.S. Builders is ₹ 47,58,316/- which includes an opening balance of ₹ 10,00,000/- and under the provision of section 194C tax is required to be deducted at the time of credit of such sum to the account of contractor or at the time of payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case. The facts are not disputed. Admittedly assessee did not deduct the tax as required under the provisions of section 194C. However, it is also not disputed that no amount was payable at the end of the year to sub-contractors. Under such circumstances, the majority view decision of Special Bench in the case Merilyn Shipping Transports (supra), is squarely applicable to the facts of the case. However, the Special Bench decision was examined by various High Court and it was held by Hon ble Allahabad High Court in the case of M/s Vector Shipping Services (P) Ltd. (supra), as under: We do not find that the revenue can take any benefit from the observations made by the Special Bench of the Tribunal in the case of Merilyn Shipping and Transport Ltd. (136 ITD 23) (SB) quoted as above to the effect Section 40 (a) (ia) was introduced in the Act by the Finance Act, 2004 with effect from1.4.2005 with a view to augment the revenue through the mechanism of tax deduction at source. This provision was brought on statute to disallow the claim of even genuine and admissible expenses of the assessee under the head 'Income from Business and Profession' in case the assessee doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble High Court stands dismissed by the Hon ble Supreme Court: 5.2. 5.3. Since no decision of Hon ble Jurisdictional High Court directly on the issue has been brought to our notice, therefore, considering the conflict of opinion between various High Court and the decision of Special Bench of the ITAT, we do not find any infirmity in the order of CIT(A) on the issue in question. 20. Respectfully, following the same, Ground Nos.2 3 are allowed. 21. As far as Ground No.4 is concerned, ld counsel for the assessee submitted that the total balance to the credit of S.S.Builders was of ₹ 47,58,316/-, which included opening balance of ₹ 10 lakhs, therefore, provisions of section 194C were not attracted to sum of ₹ 10 lakhs. 22. Having heard both the sides, we restore this issue to the file of the AO to verify the assessee s contention and if it is found that a sum of ₹ 10 lakhs represented the opening balance in the accounts of S.S.Builders, then the contention of the assessee that provisions of section 194C are not attracted, has to be accepted. The contention of ld counsel for the assessee that provisions of section 194C are not attracted, is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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