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TMI Blog2016 (1) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that:- restore this issue back to the file of AO to verify whether any order u/s.201 has been passed against the assessee. In case, no order has been passed, the AO would decide this issue in the light of the judgement of the Hon’ble High Court of Delhi in the case of CIT vs. Ansal Land Mark Township (P) Ltd.(2015 (9) TMI 79 - DELHI HIGH COURT ). Thus, this ground of assessee’s appeal is allowed for statistical purposes. Addition u/s.68 - unexplained cash credit - Held that:- There were debit and credit entry into the ledger account of the depositor. We find that there are debit entries of ₹ 1,50,000/-, then credit entries of ₹ 50,000/- & ₹ 1 lac, again there is a debit entries of ₹ 20,000/- and there is corresponding credit entry f ₹ 20,000 and again there is a credit entry of ₹ 72,000/- and debit entry of ₹ 72,000/-. The AO has added the entire entry entries of ₹ 3,94,000/- All these transactions have been routed through banking channel. The closing balance is of ₹ 1,52,000/-. We find that the AO has not given set off of these debit entries, when the transaction is routed through banking channel, identity of depositor i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,73,003/-, disallowance by invoking the provisions of section 40(a)(ia) of the Act on account of late deposit of tax to the Government account of ₹ 18,53,850/-, disallowance by invoking the provisions of section 40(a)(ia) on account of non-deduction of TDS of ₹ 18,29,036/- and addition on account of unexplained cash credit u/s.68 of the Act of ₹ 3,94,000/-. The assessee being aggrieved by the assessment order, preferred an appeal before the ld.CIT(A), who after considering the submissions of the assessee dismissed the appeal. Aggrieved by the order of the ld.CIT(A), now the assessee is further in appeal before us. 3. At the time of hearing, ld.counsel for the assessee submitted that he does not wish to press ground No.1. The ld.Sr.DR has no objection. In view of the statement made by the ld.counsel for the assessee, ground No.1 is dismissed as not pressed. 4. Ground No.2 is against confirming disallowance of employees contribution for PF ESI of ₹ 4,73,003/-. At the time of hearing, ld.counsel for the assessee fairly conceded that this issue has been decided by the Hon ble Jurisdictional High Court in favour of the Revenue in the case of CIT vs. Guj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inserted by Finance (No.2) Act, 2004 by the judgement of Hon ble High Court of Delhi in the case of CIT vs. Ansal Land Mark Township (P) Ltd. in ITA 160/2015 ITA 161/2015 dated 26/08/2015. 7.1. On the contrary, ld.Sr.DR supported the orders of the authorities below. 8. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgement relied upon by the ld.counsel for the assessee. We find that the AO observed that the assessee had not deducted the tax at source on entire amount of payments made/credited to Deepak Fabrication, JJ Engineering, Kavita Enterprise, Nitai Chandan Mandal, Om Sai Engieering Mahavir Crane totalling to ₹ 18,29,036/-. The ld.CIT(A) confirmed this disallowance by observing as under:- 8.3. I have carefully considered the facts and the circumstances of the case, observations of the Assessing Officer, submissions of the assessee and the material available on record. The assessee has himself accepted that he is a defaulter on the payments made to M/s Om Sai Engineering. The assessee claims that it is a manufacturer or producer of articles or things, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer is directed to calculate the disallowance u/s 40(a)(ia) adopting the figure of ₹ 12,12,145/- instead of ₹ 10,64,145/- as far as disallowance of payments to M/s Om Sai Engineering is concerned. The assessee fails on this ground of appeal. 8.1. The ld.counsel for the assessee has placed reliance on the judgement of Hon ble High Court of Delhi in the case of CIT vs. Ansal Land Mark Township(P) Ltd.(supra). The Hon ble High Court of Delhi has held as under:- 12. Relevant to the case in hand, what is common to both the provisions to Section 40(a)(ia) and Section 210(1) of the Act is that the as long as the payee/resident (which in this case is ALIP) has filed its return of income disclosing the payment received by an in which the income earned by it is embedded and has also paid tax on such income, the Assessee would not be treated as a person in default. As far as the present case is concerned, it is not disputed by the Revenue that the payee has filed returns and offered the sum received to tax. 13. Turning to the decision of the Agra Bench of ITAT in Rajiv Kumar Agarwal vs. ACIT (supra), the Court finds that it has undertaken a thorough analysis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses in(which the assessee's tax withholding lapses did not result in any loss to the exchequer. Now that the legislature has been compassionate enough to cure these shortcomings of provision, and thus obviate the unintended hardships, such an amendment in law, in view of the well settled legal position to the effect that a curative amendment to avoid unintended consequences is to be treated as retrospective in nature even though it may not state so specifically, the insertion of second proviso must be given retrospective effect from the point of time when the related legal provision was introduced. In view of these discussions, as also for the detailed reasons set out earlier, we -cannot subscribe to the view that it could have been an ' intended consequence to punish the assessees for non deduction of tax at source by declining the deduction in respect of related payments, even when the corresponding income is duly brought to tax. That will be going much beyond the obvious intention of the section. Accordingly, we hold that the insertion of second proviso to Section 40(a)(ia) is declaratory and curative in nature and it has retrospective effect from 1st April, 2005, being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the observations of the AO, the submissions of the assessee material available on record and the judicial pronouncements on the subject. It is clear from the records that the assessee has failed to establish the identity and creditworthiness of the claimed creditor viz Shri Mustafa Abbasbhai. He refused to comply with the summons u/s 131 issued by the Assessing Officer. There are cash deposits in the account of Shri Mustafa Abbasbhai either on the same day or a few days prior to the issue of cheque to the assessee and therefore, even the genuineness of the transaction is doubtful. Shri Mustafa Abbasbhai is an employee of the assessee and therefore, the assessee exercises control over his actions. The total net annual income of Shri Mustafa Abbasbhai is only ₹ 1,56,000/- and after considering his household expenses, he may not have enough savings to loan to the assessee. It is the assessee who has shown credits by way of loan in his books of accounts and the onus is on him to prove the identity and creditworthiness of the creditor and also establish the genuineness of the transaction. In Rosahn Di Hutti vs CIT [1977] 107 ITR 938 (SC) and Kale Khan Mohammad Hanif vs CIT [1963 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit of ₹ 3,84,000/- in assessee s bank account is held to be unexplained and the order of the Assessing Officer in this regard is upheld. The assessee fails on this ground of appeal. 9.2. The ld.counsel for the assessee drew our attention towards page No.82 to 87 of the paper-book in support of his contention that there were debit and credit entry into the ledger account of the depositor. We find that there are debit entries of ₹ 1,50,000/-, then credit entries of ₹ 50,000/- ₹ 1 lac, again there is a debit entries of ₹ 20,000/- and there is corresponding credit entry f ₹ 20,000 and again there is a credit entry of ₹ 72,000/- and debit entry of ₹ 72,000/-. The AO has added the entire entry entries of ₹ 3,94,000/- All these transactions have been routed through banking channel. The closing balance is of ₹ 1,52,000/-. We find that the AO has not given set off of these debit entries, when the transaction is routed through banking channel, identity of depositor is established, therefore in our considered view, the AO was not justified in making the disallowance of the entire credit entries amounting to ₹ 3,94, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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