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TMI Blog2017 (8) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order passed U/s 147/147(3) of IT Act 1961 and in upholding the same. 2. Under the facts and circumstances of the case, the ld CIT(A) is not justified in confirming the addition of Rs. 5,78,500/- towards increase in valuation of work in progress closing stock. 3. Under the facts & circumstances of the case, the Ld. CIT (A) is not justified in confirming the addition of Rs. 13,95,070/- towards belated deposit of TDS U/s 40(a)(ia) of IT Act, 1961." 2. The assessee derived income from execution of contract civil work. Return of income was filed on 30/09/2009 declaring total income of Rs. 3,97,920/-, which was processed U/s 143(1) of the Income Tax Act, 1961 (in short the Act) on 17/03/2011. Subsequently, it was noticed that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficiency and accuracy of the reasons recorded are not necessity at the time of reopening of the assessment. Prima facie, the Assessing Officer was having sufficient material to form a belief that income had escaped assessment. She pleaded to sustain the reopening proceedings being legal and valid. 5. I have heard both the sides on this issue. I have also perused the grounds of various additions made by the Assessing Officer. I have also considered the case laws relied upon by both the sides. After taking all the relevant facts under consideration, I am of the view that the pleadings of the ld AR are not supported by the facts of the case. The discrepancy was noted between the books of account and form 26 AS. On that basis, the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 10 lakhs and as the assessee has shown the closing stock of RS. 421500 therefore the difference of Rs. 578500 was added to be the part of the valuation of closing stock. The appellant's case is that when the AO has estimated profit by applying NP rate of 8% then no separate addition on account of closing stock can be made. On careful consideration of the facts of record it is noted that the appellant has not disputed the finding of the AO that partly completed work should have been reflected as work in progress in the closing stock. The appellant has also not disputed the estimation of work in progress out of Rs. 1750000 at Rs. 10 lakh. The objection of the appellant that when NP rate of 8% is applied then no further addition should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal is against sustaining the addition of Rs. 13,95,070/- towards belated deposit of TDS U/s 40(a)(ia) of the Act. This is the amount, which the assessee has paid to three different persons, which is: (i) M/s Anjali Tubewell Co. Rs. 325490/- (ii) Balaji Constructions Rs. 150000/- (iii) Shyam Earth Movers Rs. 919580/- and deducted the TDS. The ld. CIT(A) has decided the issue as under:- "7.3 I have carefully considered the findings of the AO and submission of the appellant. It may be noted that there is no dispute on the fact that the assessee has deducted TDS on the contractual payment of Rs. 1395070 but the TDS deducted was not deposited in time. The only contention of the appellant for deletion of such addition is that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The ld. AR relied on the various decisions wherein he has tried to establish that the TDS was on labour/job work/machinery hire charges, therefore, it is not covered by Section 30 to 38 of the Act on which the provisions are applicable. He pleaded that these expenses are covered by Section 28 of the Act. In my considered view, such pleadings are completely futile and irrelevant to the fact that it has no legal basis. It was made clear to ld. AR that Section 28 of the Act provide about which income shall be chargeable to income tax under the head profit and gain of business and profession. The provisions of Section 28 of the Act cannot be extended to encompass expenses other than mentioned in Section 30 to 38 of the Act, so that those expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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