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TMI Blog2017 (10) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... - is part of the gross contract amount of ₹ 7,87,57,116/- declared by Shri Banimali Koley as his contract receipts in the return of income filed for A.Y.2012-13. It is also clear from the remand report of the AO that it cannot be said that the assessee has not included the sum of ₹ 1,69,89,200/- received from the assessee in his gross receipts. The AO did not examine Shri Banimali Koley, if he had any doubts in this regard. He has however not chosen to do so but has given a remand report which is very vague. The certificate in Form No.26A has to be accepted as correct - disallowance sustained by CIT(A) u/s 40(a)(ia) of the Act should be deleted - appeal allowed - decided in favor of assessee. - ITA No.943/Kol/2017 - - - Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racts. In the course of assessment proceedings u/s 143(3) of the Income Tax Act, 1961 (Act), the AO noticed that the assessee had paid a sum of ₹ 1,69,89,200/- as labour charges to M/s. Koley Construction, sole proprietor Shri Banamali Koley. The payment in question was in the nature of payment for carrying out work and the assessee was bound to deduct tax at source in terms of section 194C of the Act. Since the assessee failed to deduct tax at source the AO disallowed the sum of ₹ 1,69,89,200/- which was claimed as expenses by the assessee in the profit and loss account by invoking the provision of section 40(a)(ia) of the Act. 4. Before CIT(A) the assessee submitted that as the second proviso to section 40(a)(ia) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alled for the evidence from Shri Banamali Koley, proprietor of M/s. Koley Construction to whom the payments in question were made by the assessee to show entries in his books of account by which a sum of ₹ 1,69,89,200/- received from the assessee as labour charges had been accounted for. To such an enquiry of the AO, Shri Banamali Koley merely relied on the proviso to section 201(1) of the Act and the certificate of the Chartered Accountant in Form No.26A and failed to produce the books of accounts as demanded by the AO. The AO accordingly in his remand report was of the view that he was not in a position to say as to whether Shri Banamali Koley had included the payment received from the assessee computing his income for A.Y.2012-13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard the rival submissions. The short point that arose for consideration is as to whether filing of Form No.26A namely the certificate of the Chartered Accountant as prescribed under the proviso to section 201(1) of the Act can be taken as a conclusive proof that the recipients of the payment from the assessee has taken into account the sum received from an assessee on which no tax had been deducted at source for computing his income in such return of income. The proviso to section 201(1) of the Act inserted by the Finance Act 2012 w.e.f. 01.07.2012 reads as follows :- Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act dated 30.03.2015 and the complete books of account, bills and vouchers, bank statements and other documents were submitted before the AO in such proceedings. This fact is not disputed by the revenue. The AO has however observed as follows in his remand report dated 29.11.2016: However, on going through the assessment record of Sri Banamali Koley for A . Y . 2012 - 13 it appears that Sri Koley, Prop . Of Koley Construciton credited in the profit loss account as on 31 / 03 / 2012 ( 1 ) Gorss contract amount received Rs . 7,87,57,116 /- ( 2 ) Hire charges received Rs . 12,07,210 /- , but whether Sri Koley included of Rs . 1,69,89,200 /- received from M / s . Koley ConstructionITA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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