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TMI Blog2014 (9) TMI 1017X X X X Extracts X X X X X X X X Extracts X X X X ..... s also been made like regular assessment. The reasons/findings given in the assessment order are same as given in the assessment for the assessment year 2010-11. - Decided against revenue Disallowance of wages - CIT(A) deleted the addition - Held that:- No such disallowance was made in A.Y. 2009-10. Otherwise also the AO pointed out certain defects regarding address of the labour, thumb impression, attendance record, but at the same time he allowed the entire wages paid during the year and the outstanding wages for two months. As such, there appears to be no nexus between the defects pointed out and the amount disallowed. We also find that the only apprehension of AO as appears from his order is about the huge outstanding wages and that too only in respect of outstanding for a period of more than two months. The assessee furnished appropriate explanation giving reason for shortage of fund as considered by the CIT(A) in his order. Assessee also furnished details of payment of outstanding amount in the next year. In such facts and circumstances of the case, we find no reason to disagree with the view taken by the CIT (A).- Decided against revenue Non deduction of tds u/s 194C - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances of the case and looking at the overall quantum of expenditure of ₹ 17,25,65,778/- claimed by the assessee in computing the business profits, we do not agree with the version of the department - Decided against revenue - ITA No. 412 & 413/JU/2014 - - - Dated:- 25-9-2014 - SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER For the Petitioner : Shri Sandeep Jhanwar For the Respondent : Shri Jai Singh, DR ORDER PER HARI OM MARATHA, J.M. These two appeals by the revenue are directed against two separate orders of the CIT(A), Udaipur both dated 02.05.2014. Since the issues in these two appeals are common, we are disposing them off by this common order. 2. Ground Nos. 1 to 4 of the Revenue s appeals in both the years arises out of same common findings of CIT(A). 2.1 Briefly stated, the facts of the case are that the assessee derives income from contract business. The AO pointed out certain defects in the books of accounts and applied provisions of section 145(3) of the Income-tax Act, 1961 ['the Act' for short]. He estimated the net profit in the contract business of the assessee by applying a rate of 9% i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 1,01,25,000/- has been surrendered as income for A.Y. 2010-11 but that has been separately considered by the assessee as well as department while computing the business income. The AO also added the same to the total income over and above the estimated income by applying net profit rate. Therefore, no inference out of that could be taken in respect of income determined on the basis of entries made in the regular books of accounts. The books may only be rejected on account of specific defect in books of accounts. On this basis, he supported the order of CIT (A). 2.3 We have perused the material on record and also the rival submission made by the parties. We find that the provisions of section 145(3) of the Act have been applied on the basis of same reasons as considered by us in appeal no. 391/Jodh/2013 CO No. 25/Jodh/13 in the assessee s case for A.Y. 2009-10. We have dealt the issue in detail in that order dated 25.09.2013. We find that the facts and circumstances in these two years are same. The assessee continuous to derive income from contractorship business and the manner of keeping the books of accounts is same. The books of accounts are audited and nothing has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ₹ 59,50,250/- as reasonable and genuine, purely on estimate/guess basis. The nature of payment to labours will not defer the wages for the months and years. The ld. CIT(A) also found that the appellant has explained the reasons for deferring the wages due to financial shortage which had arisen due to block of his substantial funds as security by the contracts awardees. He observed that the contention of the appellant is verifiable from the schedule I which is part and parcel of the balance sheet of the appellant of the A.Y. under consideration. According to this, there is a deposit of ₹ 5,87,86,023/- which is substantially high in comparison to the immediately preceding A.Y. Further, the delay in receiving the payments from the contract awardees was also one of the reasons for deferring the wages for the next year. Further, admittedly, the appellant has paid the whole wages to the labours in the next year and no wages which was carried forward as outstanding. He further mentioned that it is not a case of AO that the wages claimed is not genuine but, it is the case of the AO that the reasons given for deferring the wages for the next year were not satisfactory wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his order. Assessee also furnished details of payment of outstanding amount in the next year. In such facts and circumstances of the case, we find no reason to disagree with the view taken by the CIT (A). We accordingly uphold his order for both the years and reject ground no. 5, 5(a) 5(b) of both the departmental appeals. 4. Now we take up remaining grounds of appeal for A.Y. 2008-09. 4.1 Ground No. 6 of the departmental appeals is against deletion of disallowance of ₹ 6,67,918/-. 4.2 The A.O found that TDS was not made on certain payments of freight Repairs on which tax should have been deducted u/s 194C. He accordingly applied provisions of section 40(a)(ia) of the Act and disallowed ₹ 6,67,918/- while computing the total income. Ld. CIT(A) on the other hand allowed the claim of the assessee, finding that provisions of section 40(a)(ia) are not applicable where the expenditure has already been paid and it is not outstanding at the end of the year. He relied on ITAT Bangalore Bench judgment in the case of S. S. Ward vs. Addl. CIT (2012) 19 ITR (Trib.) 35. 4.3 We have heard the rival parties and perused the material on record. We find that the entire ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the assets as the assessee failed to produce the bills of the assets purchased whereas the appellant has filed copy of the bills of the fixed assets acquired during the year vide letter dated 08.03.2013. He further observed that it is not a case of the AO that the assets on which the depreciation was disallowed, has been used for the purpose other than business. He accordingly deleted the disallowance. 5.2 Before us, the ld. D.R supported the order and submitted that in absence of proper details of fixed assets purchased, depreciation can t be allowed. 5.3 The ld. A.R on the other hand supported the order of CIT(A) by submitting that both the computers and stone crusher plants was purchased by the assessee during the year and the cost was paid by cheque and duly and entered in the books of accounts as evident from copies of ledger account submitted. The assets could well be physically verified by anybody. The auditors had duly verified the books of account and vouchers and had held the depreciation allowable in their tax audit report. The assessee could not produce purchase bills at the time of hearing of assessment proceeding because the bills were misplaced by staff d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay basis in books of accounts of the assessee. These accounts are audited by the auditors and no adverse opinion has been given by the auditors. In such circumstances, the disallowance made only for the reason of non- submission of voucher was not justified. He accordingly supported the order of CIT(A). 6.2 We have heard the submissions of the parties and perused the material on record. We find that Assessing Officer has given over weightage on vouchers of the expenses. The expenditure on repairs appears to have been incurred in normal course of business. There is no observation that these expenses are excessive looking at the nature of business of the assessee. The assessee has fairly large size of turnover and absence of few vouchers is inevitable in such cases. In these facts and circumstances of the case, we are inclined to uphold the findings given by CIT (A) and reject this ground of appeal also. Now we go to the only remaining grounds no. 6 in appeal for the A.Y. 2010-11 which is taken against deletion of addition of ₹ 15,22,979/- made by applying the provisions of section 69C of the Act. 6.3 The A.O found that the assessee himself admitted entries of ₹ 1,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this amount of ₹ 1,16,47,979/-. The surrender of ₹ 1,01,25,000/- was in fact made on overall basis with a mention of not levying any penalty on the same. The sum of ₹ 1,16,47,979/- is in respect of various expenditure. Assessee has claimed total expenditure of ₹ 17,25,65,778/- as per books of account for various sites which is much higher than the amount of expenditure of ₹ 1,16,47,979/-. On one hand, the revenue claims that the assessee has recorded higher expenditure for the purpose of proposing its disallowances and at the same time proposes addition in respect of unbooked expenses which is not justified in the facts and circumstances of the present case. The expenditure of ₹ 1,16,47,979/- is in fact part of overall expenditure of ₹ 17,25,65,778/- claimed by the assessee. We are inclined to agree with the version of the assessee that the expenditure which has been written at various sites by different persons in an unsystematic manner had been duly incorporated in the books of accounts on systematic basis. We have already given a finding that the AO did not point out any substantial defect in the books of accounts. In such facts and cir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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