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TMI Blog2015 (8) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Ld. CIT (A) in conforming disallowance - Decided against assessee. Addition on account of non deduction of TDS for the payments for purchasing calendars - Held that:- CIT (A) while upholding the disallowance has held that the contract for purchase of calendars was a works contract and therefore, the assessee was liable to deduct TDS. On the other hand before us Ld. A.R. submitted that the assessee had also purchased calendars in earlier and subsequent years and in those years, in the assessments framed u/s. 143(3), no disallowance on account of non deduction of TDS has been made by the Revenue Authorities. We however find that to support the contention of allowing the expenses in earlier and subsequent years, the relevant assessment orders are not on record. We therefore, are of the view that in the interest of justice, the issue needs to be re-examined at the end of A.O. and if no disallowance of similar expenditure has been made in earlier years and or subsequent years, the addition made by the A.O.in the year under consideration be deleted. - Decided in favour of assessee for statistical purposes. Addition on account of prior period expenses - Held that:- CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 declaring total income of ₹ 20,12,86,950/-.The case was selected for scrutiny and thereafter the assessment was framed u/s. 143(3) of the Income tax Act,1961 vide order dated 27-12-2010 and the total income was determined at ₹ 20,48,61,950/-. Aggrieved by the order of the Assessing Officer, assessee carried the matter before the CIT (A), who vide order dated 26-8-2011 granted partial relief to the assessee. 4. Aggrieved by the order of CIT (A), the assessee is now in appeal before us and raised following grounds of appeal:- 1. The Ld. CIT (A) has erred in law and on facts in confirming the addition of ₹ 15,94,765/- on account of disallowance u/s.40(a)(ia) of the Act without proper appreciation of the facts, submissions and legal position as well as arguments put forth in the written submissions filed before the AO. and the CIT (A). In view of the facts and submissions filed coupled with legal position in support thereof, the impugned addition requires to be deleted/cancelled. 2. The Ld. CIT (A) has erred in law and on facts in confirming the addition of ₹ 1,04,669/- on account of non-deduction of TDS u/s. 194C r.w.s. 40(a)(ia) of the Act on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and forwarding agents. Since the appellant company did not deduct TDS u/s. 194C in that year, the expenses were disallowed by the appellant himself u/s. 40(a)(ia) of the Act. Now, in the present year, the appellant has claimed the deduction on account of this expenditure saying that no tax was liable to be deducted on this expenditure and since it cannot be claimed in earlier year, the expenditure is claimed in this year. The claim of the appellant is not acceptable. The fact remains that the expenditure does not pertain to the current year and the assessee has neither deducted the tax nor paid the said tax during the previous year under consideration and, therefore, no deduction can be allowed in the current year in respect of that expenditure. The claim of the appellant that no TDS was required to be deducted and, therefore, disallowance of expenditure was not warranted is not relevant. The relevant point is that the expenditure pertains to earlier year and the appellant in that year had himself made a disallowance for some reason in the return. The appellant has also claimed in his written submission that the first appellate authority can consider the claim of expenditure whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the expenditure were with respect to export of goods and to which the Ld. A.R. could not place any evidence to demonstrate that the goods were exported in the year under consideration or even at the fag end of F.Y. 2006-07. Before us the Ld., A.R. has also not placed any material on record to demonstrate that the liability crystallized during the year nor has placed any material on record to controvert the findings of Ld.CIT (A). Further the case laws relied upon by Ld. A.R. are also distinguishable on facts and in view of the aforesaid facts, we find no reason to interfere with the order of the Ld. CIT (A) and thus this ground of the assessee is dismissed. 10. Second ground is with respect to the addition of ₹ 1,04,669/- on account of non deduction of TDS for the payments for purchasing calendars. 11. Assessing Officer during the course of assessment proceedings noticed that assessee has paid ₹ 1,04,669/- for calendars printing work but no TDS was deducted and for non deduction of TDS the assessee s submission was that the contract for printing calendar was including material and was therefore the assessee was not liable to deduct TDS. The submission of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in 201 ITR 435. Ld. D.R. on the other hand, supported the order of A.O. and the CIT (A). 15. We have heard rival submissions and perused the material available on record. We find that the CIT (A) while upholding the disallowance has held that the contract for purchase of calendars was a works contract and therefore, the assessee was liable to deduct TDS. On the other hand before us Ld. A.R. submitted that the assessee had also purchased calendars in earlier and subsequent years and in those years, in the assessments framed u/s. 143(3), no disallowance on account of non deduction of TDS has been made by the Revenue Authorities. We however find that to support the contention of allowing the expenses in earlier and subsequent years, the relevant assessment orders are not on record. We therefore, are of the view that in the interest of justice, the issue needs to be re-examined at the end of A.O. and if no disallowance of similar expenditure has been made in earlier years and or subsequent years, the addition made by the A.O.in the year under consideration be deleted. We therefore, restore the matter to the file of A.O. to decide the issue as per the directions given hereinabove. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while computing the income for A.Y. 2008-09 as it was below the line adjustment in the profit and loss account. He therefore, submitted that since the assessee has not claimed the expenditure, the question of any disallowance does not arise at all. He further submitted that the said expenses crystallized during the year is not in dispute because the invoices were received during the year and for which he pointed to Annexure F of Tax Audit Report placed at page 56 of the paper book and submitted that the auditor has also certified the crystallization of the liability during the year. He therefore, submitted that the addition made by the A.O. be deleted and for which he also placed reliance on the decision reported in the case of CIT v/s. CIT v/s. Bharat Carbon Ribbon Manufacturing Co. Pvt. Ltd., 239 ITR 505 (SC) (supra). 20. The Ld. D.R. on the other hand supported the order of AO and CIT (A). 21. We have heard the rival submissions and perused the material available on record. The issue in the present case is about the disallowability of prior period expenses. We find that the Ld. CIT (A) while upholding the disallowance has noted that the assessee has not been able to prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is covered with Rule 6DD of the Income Tax Rules. The claim of the appellant that the foreign currency was purchased from an authorized dealer, the payment was made to a foreigner and on demand will not exempt him from the provisions of Sec. 40A (3) of the Act. It has to be proved by him that the payment in cash is covered by Rule 6DD of the Income Tax Rules which he has failed to do. Accordingly, the disallowance made by the A.O. is upheld. The ground of appeal is therefore, dismissed. 25. Aggrieved by the order of CIT (A), the assessee is now in appeal before us. Before us the Ld. A.R. reiterated the submissions made before A.O. and the CIT (A) and further submitted that the payments in question pertains to machinery repairs expenses paid to the foreign representative of the company during his stay in India and on his specific request. He further, submitted that the person to whom payment was made was not having any bank account in India and the payment was made under exceptional circumstances. He further submitted that the genuineness of the payment has not been questioned by the A.O., and in such circumstances the payment be allowed. The Ld. D.R. on the other hand suppor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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