9911796707
TMI Blog2015 (12) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... discharged as there is no evidence to suggest the bogus nature of the expenditure and the conclusion of the Assessing Officer is based on the presumption to reach the conclusion that the payment are not genuine it cannot be upheld. Further, the assessee is able to show the commercial expediency to incur the expenditure for the purpose of business and incurring of expenditure also confirmed by the respective sub-contractors and they have received payments through banking channel in subsequent assessment years. Hence, we have no hesitation in confirming the order of the Commissioner of Income Tax (Appeals) - Decided against revenue - IT APPEAL No. 2038 (MDS.) OF 2014 - - - Dated:- 28-8-2015 - N.R.S. GANESAN, JUDICIAL MEMBER AND CHANDRA PO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals) forwarded the same to the Assessing Officer and called for remand report from the Assessing Officer. The Assessing Officer submitted remand report on 20.12.2013. The Commissioner of Income Tax (Appeals) gave a copy of the remand report forwarded by the Assessing Officer to the assessee for comments. After considering the assessee's comments, the Commissioner of Income Tax (Appeals) also considered the submissions of the ld. Authorised Representative for assessee and also the findings of the Assessing Officer in the order of assessment, the remand report and observed that the Assessing officer in the assessment order was that the sub-contractors viz. Teckno Conveyor and Errections India were accommodating concerns for claiming co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctors have raised invoices at the end of the Financial year and declared the same as income on accrual basis in their respective hands. The Assessee had deducted tax at source in respect of the amount payable to the sub contractors; The Assessee had raised invoices against M/s. Vedanta in respect of the executed work and duly accounted the same; M/s. Vedanta had issued completion certificate; Assessee had made part payments to the sub contractors in subsequent assessment years as and when it received payment from M/s. Vedanta. 4.1 The Commissioner of Income Tax (Appeals) further observed that the materials placed on record and as submitted by the assessee, it was found that the sub-contractor Teknoconveyor was engaged by the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccrued was in the course and for the purpose of its business. Outstanding dues to labourers/hire charges by the Sub-contractors of the assessee and non deduction of tax at source by the sub-contractors of the assessee, cannot be taken as reasons for disallowing the claim of the assessee. In this case, it is established from the undisputed facts and my findings above that the sub-contractors have executed the work for the assessee. The assessee had incurred expenditure to its sub contractors for execution of the project undertaken by the assessee with Vedanta, and Vedanta had issued completion certificate in respect of four projects. Once it is established that the assessee had incurred the expenditure for the purpose of its business, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d when the entry has been made towards the expenditure at the fag end of the financial year. ''Expenditure'' is not necessarily confined to the money which has been actually paid out. It covers a liability which has accrued or which has been incurred although it may have to be discharged at a future date. However, any expenditure primarily denotes the idea of spending or paying out, it may, in given circumstances, also covers an amount which has gone out of the assessee's pocket but which is all the same, an amount which the assessee has had to give out. It also covers a liability which the assessee has incurred in praesenti although it is payable in future. A contingent liability that may arise in future is, however, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason to doubt the expenditure incurred to carry on the business of the assessee. The only test for the deductability of the expenditure is whether the expenditure has been incurred solely and exclusively for the purpose of the business. If the reality of the payment is challenged or is in dispute different considerations arise; so also in case where the tax authorities are able to point to some consideration other than the purpose of the business as accounting for any portion of the payment made. In such cases, of course, such portion of the amount claimed, which is either not held to have been paid or is held to have been paid for reasons other than business expediency, could and should be disallowed; but the reason for disallowance is be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
