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TMI Blog2017 (3) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessing officer for adjudication de novo - Decided in favour of assessee for statistical purposes. Unexplained investment addition u/s 69 - Held that:- On perusal of the AO order we find that the assessee has made the payment to the GGPL 2 times in the year under consideration for the purchase of the flats. The 1st payment was of ₹ 9.86 lakh which has been duly disclosed in the balance sheet but the 2nd payment for ₹ 9.50 lakh to the same party and for the same transaction has not been shown in the name of the GGPL in the balance sheet. Non-disclosure of the 2nd payment has created suspicion in the mind of the AO and in the absence of any satisfactory reply from the assessee in this regard, the AO had resorted to treat the same as unexplained investment u/s69 of the Act. There is no dispute that the payment was made to the GGPL for ₹ 9.50 lakh though bank which was disclosed in the return of the assessee. However, the pertinent issue is that the same entry is not reflecting in the balance sheet of the assessee. Therefore, in our considered view the instant issue needs to be re-examined by the AO. - Decided in favour of assessee for statistical purposes. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y AO for the non-deduction of tax, the assessee submitted that the accountant has made a mistake for non-deduction of TDS inadvertently and expressed no objection for the proposed addition as per law. Accordingly, AO has disallowed the same and added to the total income of assessee. 5. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before the ld. CIT-A submitted that fees to the counsel and advocates were reimbursed by the client of assessee. The accounting entries shown in the form of expense cannot change the character of the payments made by assessee. As such, the accounting entries are not decisive in taxation issues. However, Ld. CIT(A) disregarded the claim of assessee and confirmed the order of AO by observing as under:- 3.3 I have considered the facts of the case and the appellant s submissions. It is not disputed that tax had not been deducted by the appellant. The appellant also relied upon other case to state that reimbursement of expenses does not attract the provisions requiring deduction of tax at source but the facts of those cases are distinguishable. In those cases, the assessee had reimbursed expenses to the payee whereas in the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pages 5 to 9 where the copies of sample bills were placed. In those sample bills, the payments collected on behalf of counsel and advocates were shown separately. On the other hand, Ld. DR submitted that additional evidences are submitted and accordingly prayed before the Bench to restore the issue to the file of AO. 7. We have heard the rival contentions and perused the materials available on record. The issue in the case relates to the disallowances made by the AO on account of non-deduction of tax on the payment of professional fees as specified under section 194J of the Act. The disallowance made by the AO has been subsequently confirmed by the learned CIT-A. The provisions of section 40(a)(ia) of the act, under which the impugned disallowances has been made, provides as under. Amounts not deductible. 40. Notwithstanding anything to the contrary in sections 30 to 88 [38], the following amounts shall not be deducted in computing the income chargeable under the head Profits and gains of business or profession ,- (a) .. (ia) any interest, commission or brokerage, 91 [rent, royalty,] fees for professional services or fees for technical s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 4 of paper book where the bills raised to the parties are placed, we find that the assessee has claimed the payment for senior counsel from its client separately. The sample bills produced before us for our consideration justify that the assessee is charging the fees from its clients for the counsels separately. Thus the amount of fees collected from the clients in the name of the senior counsel amounts to reimbursement of expenses. Accordingly the claim of the assessee is that he had no share of income out of these counsel payments and accordingly not liable for the TDS deduction. We find force in the argument of the ld AR but at the same time the gamut of the facts of the case needs verification. On this proposition the learned DR fairly did not dispute the same but prayed to restore the matter to the file of the assessing officer for the necessary verification on this aspect. In view of these discussions and bearing in mind entirety of the case we deem it fit and proper to restore the matter to the file of the assessing officer for adjudication de novo in the light of our above observation and in accordance with the law. While doing so the assessing officer shall give a due a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 9,50,000/- is confirmed. Being aggrieved by this order of Ld. CIT(A) assessee came in second appeal before us. 11. Before us Ld. AR for the assessee has reiterated same submissions as made before Ld. CIT(A) whereas Ld. DR for the Revenue vehemently relied on the order of Authorities Below. 12. We have heard the rival contentions and perused the materials available on record. The issue in the case relates to the disallowances made by the AO on account of payment to GGPL for ₹ 9.50 lakh which has not been disclosed in the balance sheet of the assessee. The AO has treated the impugned payment as unexplained investment u/s 69 of the Act due to non-disclosure of the same in the balance sheet of the assessee. The disallowances made by the AO was subsequently confirmed by the ld CIT(A). The provisions of section 69 of the Act, under which the impugned addition has been made reads as under : Unexplained investments. 69. where in the financial year immediately preceding the assessment year the assessee has made investments which are not record in the boa, if any, maintained by him for any source of income, and the assessee offers no explanation about t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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