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TMI Blog2017 (3) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospective in operation by the decision cited supra and accordingly, the issue should not be invited with disallowance u/s. 40(a)(ia) of the Act. With regard to other two payments in the sum of ₹ 1,00,000/- each to M/s. Maa Jagadamba Transport and M/s. Shiv Shakti Transport, we find that the assessee was not able to adduce any evidence even before us. However, in view of the fact that the said payments were made by account payee cheques and those parties being residing at a far away location, we deem it fit and proper in the interest of justice and fair play to set aside this aspect of the issue (i.e in respect of these two parties only) also to the file of the AO to decide the same afresh in accordance with law. Disallowance of payments made to labourers for screening work - Held that:- We find from the bank statement enclosed in page 33 of the paper book, the names of the three parties viz., A. K. Goala, Sanja and labour association are duly reflected therein on three different dates. This clearly proves that the assessee had issued bearer cheques to those three parties. Hence, the finding of the AO that payments were made by account payee cheques is factually i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AM: This appeal by assessee is arising out of order of CIT(A), Asansol vide appeal No. 329/CIT(A)/Asl/W-2(1)/Asl/11-12 dated 09.10.2013. Assessment was framed by ITO, Ward-2(1), Asansol u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) for Assessment Year 2009-10 vide his order dated 27.12.2011. 2. The first issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in upholding the disallowance made u/s. 40(a)(ia) of the Act in respect of transport charges in the facts and circumstances of the case. 3. The brief facts of this issue is that the assessee is the proprietor of M/s. Tirupati Balajee Enterprises engaged in trading in iron ores. During the course of assessment proceedings the AO observed that assessee has debited a sum of ₹ 11,62,000/- as freight charges in his P L Account and out of that a sum of ₹ 9,50,000/- was paid to M/s. Baba Transport, ₹ 1 lac paid to M/s. Maa Jagadamba Transport and ₹ 1 lac to Shiv Shakti Roadlines without deduction of tax at source. Accordingly, he proceeded to disallow the same u/s. 40(a)(ia) of the Act for violation of section 194C of the Act. This addition wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said parties to support the case of the assessee. In response to this, the Ld. DR objected to the very admission of additional evidence in terms of Rule 29 of ITAT Rules by arguing that the certificate enclosed in the additional evidence is given by M/s. Baba Transport and not by the Chartered Accountant of M/s. Baba Transport as provided in second proviso to section 40(a)(ia) and sec. 201(1) of the Act. Apart from this, he vehemently relied on the orders of the lower authorities and pleaded for non- interference of the said order. 6. We have heard rival submissions and have perused the records very carefully. We find that the assessee had filed additional evidence in terms of rules 29 of ITAT Rules in the form of certificate from M/s. Baba Transport which is enclosed in page 1 of the paper book and from the said certificate it is seen that M/s. Baba Transport had duly accounted for in their books and in the income tax return the receipt of monies from the assessee to the tune of ₹ 9,50,000/-. It is also seen that the said certificate admittedly contains PAN and income tax particulars of M/s. Baba Transport. We find that even though the said certificate is not signed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wards screening work. It was also explained that since assessee is engaged in the business of trading of iron ore, screening of ore is very important and it is mainly labour oriented job and labours are used for such manual screening for separation of boulders etc. from iron ore, for purification. It was stated that these payments were made through labour sardar and through labour association available in the said locality and accordingly, the same does not fall under the ambit of any contract within the meaning of section 194C of the Act and hence, the provisions of section 40(a)(ia) of the Act could not be invoked on the assessee. The AO not convinced with this reply proceeded to make the disallowance u/s. 40(a)(ia) of the Act in the sum of ₹ 12,90,000/- in the assessment. The same was upheld by the Ld. CIT(A) . Aggrieved, the assessee is in appeal before us on the following ground: 6. For that on the facts of the case the Ld. CIT(A) was not legally justified in sustaining the addition of ₹ 12,90,000/- on A/c of payments made to labourers for screening work and the provisions of section 40(a)(ia) is not applicable to such payments and the addition on this count m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion and have carefully perused the material available on record. We find from the bank statement enclosed in page 33 of the paper book, the names of the three parties viz., A. K. Goala, Sanja and labour association are duly reflected therein on three different dates. This clearly proves that the assessee had issued bearer cheques to those three parties. Hence, the finding of the AO that payments were made by account payee cheques is factually incorrect. We also find that the assessee had filed ledger account before the AO which clearly proves that the payments were made to two labour sardars and one labour association for payment to labourers for various dates. This fact is also supported by wage sheet filed by the assessee in the form of additional evidence before us. However, since wage sheet was not available before the lower authorities for their examination, we deem it fit and appropriate in the interest of justice and fair play, to set aside this issue to the file of the AO to examine the wage sheet and the contention of the assessee that the payments were made to labour sardar and labour association and if the same are found to be true, the assessee should not be invited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06,533/- payable by the assessee to the said party. The assessee had made purchases of ₹ 2,73,034/- during the year from the said party. The assessee had made payments by account payee cheques to the tune of ₹ 16,45,497/- during the year to the said party. Accordingly, there is a balance of ₹ 8,34,070/- payable to the said party as on 31.03.2009. The assessee was able to get a statement of account from the said party Mr. Nirmal Kumar Pradip Kumar and the same is filed as additional evidence before us and from the said statement, he stated that there is a difference of ₹ 5 lacs in the opening balance with the said party in view of the fact that the said party is showing a debit balance of ₹ 17,06,533/- as on 01.04.2008 whereas the assessee is showing an opening credit balance of ₹ 22,06,533/-. He stated that there is no dispute on the total purchase made from the said party. There were three payments made by the assessee during the year to the tune of ₹ 16,45,497/- which is also duly reflected in the statement of account of the said party. Apart from this, the said party had credited two sums one i.e. on 26.05.2008 ₹ 3 lacs vide cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X
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