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TMI Blog2016 (7) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... leting the addition - Decided in favour of assessee. Addition u/s 40(a)(ia) - assessee had not proved that TDS was deducted and paid before the end of the financial year - Held that:- Having regard to the facts of the case, we set-aside the issue to the file of the Assessing Officer for de novo examination. AO is directed to delete the addition on being satisfied that the TDS on the aforesaid payment has been deducted and paid on or before the due date of filing of the return of income. The assessee shall be given reasonable opportunity of being heard while deciding the issue. - Decided in favour of revenue for statistical purposes. Some expenses were not fully verifiable - Ad-hoc disallowance made @ 10% of such expenses. - ITA No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed dates. The Assessing Officer also noted that the assessee has deducted tax and paid to the Government Treasury after the prescribed dates as referred to in Rule 30 of the Income Tax Rules, 1962 and therefore owing to the failure of TDS compliance, the deduction of the aforesaid amount cannot be allowed as expenditure. He, accordingly, proceeded to make addition of ₹ 52,14,078/- to the total income of the assessee. 3.2 In first appeal, the CIT(A) however noted that the entire amount of TDS has been paid in the financial year 2008-09 only. He, accordingly, placed reliance upon the order of the Hon ble Calcutta High Court in the case of CIT vs. Virgin Creations in ITA No.302 of 2011 order dated 23.11.2011 and granted relief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cutta High Court, it is held that the Assessing Officer was not justified in making addition of ₹ 52,14,078/- u/s. 40(a)(ia) of the Income-tax Act. It would not be out of place to mention that in case the amount is claimed in A.Y. 2010-11 on payments basis or allowed by the Assessing Officer, the same is required to be withdrawn. Subject to the above remarks, the ground is allowed. 3.3 The Ld. Authorized Representative (AR) for the assessee vehemently exhorted that there is no dispute that the TDS has been deposited in the Government Treasury during the financial year itself and in any case before the due date of filing of the return of income. The requisite details in respect of payment with reference to the deposit challans ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A), the assessee submitted that the PAN in respect of M/s Reliable Manpower Services remained to be typed due to clerical oversight at the auditor s office. A copy of the PAN card of the recipient was submitted before the Assessing Officer during the course of assessment proceedings, which has not been considered. The assessee claimed that it has deducted TDS on the aforesaid amount and deposited the same well before the year-end. Therefore, no adverse inference can be drawn against the assessee. 5.3 The CIT(A) on appreciation of facts placed before him granted the relief to the assessee. The operative para of the order of the CIT(A) is as under :- 10. I have carefully considered the facts of the case as well as reply of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being heard while deciding the issue. We direct accordingly. 7. Thus, Ground No.2 of the Revenue appeal is allowed for statistical purposes. 8. In the result, the appeal of the Revenue is disposed of in the aforesaid terms. ITA No.1470/PN/2014 (By Assessee) : 9. Now, we shall take-up the assessee s appeal. The assessee has taken several Grounds in its appeal. However, the only issue involved is ad-hoc disallowance of ₹ 3,12,706/- out of business/sales promotions expenses. 10. The Assessing Officer observed that the assessee firm incurred expenditure on account of business/sales promotion to the tune of ₹ 31,27,065/-. The Assessing Officer next observed that major expenses are towards Hotel expenses, lunch expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that expenses of ₹ 31,27,065/- includes a meager amount of ₹ 2,26,358/- towards Hotel and lunch expenses are duly supported by evidences. The Ld. AR further submitted that with reference to para 4.1 of the assessment order that the disallowance before the Assessing Officer was agreed with respect to Hotel expenses, lunch expenses and entertainment of guests etc. which amount to ₹ 2,26,358/- only. The Assessing Officer has, therefore, wrongly worked out the disallowance with reference to the total expenses of ₹ 31,27,065/-. 11. We find that the major expenses have been incurred towards advertisements and expenditure incurred towards goods used for Demo and promotions, professional fees paid for exhibition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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