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TMI Blog2018 (1) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... 5(3) of the Income Tax Act, 1961. The action of the CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the rejection of books of accounts. 2. In the facts and circumstances of the case and in law the Id. CIT (A) has erred in confirming the action of the Id. AO in disallowing a sum of Rs. 16,17,487/- under section 40(a)(ia) of the Income Tax Act, 1961. The action of Id. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing of the said disallowance of Rs. 16,17,487/-. 3. In the facts and circumstances of the case and in law the Id. CIT (A) has erred in confirming the action of the Id. AO in disallowing a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat as per the amendment in Section 40(a)(ia) of the Act only 30% of the sum payable to a resident shall be disallowance if the tax is not deducted at source. The said amendment is explanatory in nature and therefore, it is applicable retrospectively. The ld AR of the assessee has relied on the decision of Hon'ble Supreme Court in the case of CIT Vs Vatika Township Pvt. Ltd. 109 DTR 33 and submitted that the Hon'ble Apex Court has observed that if legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, then the presumption would be that such legislation giving it a purposive construction, would warrant it to be given a retrospective effect. The ld AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of accounts were rejected u/s 145(3) of the Act and thereafter the AO has estimated net profit @ 5.05% on contract receipt after deduction of depreciation, interest and remuneration paid to partners as against net profit of 2.39% declared by the assessee. From the perusal of the assessment order, it is noted that there have been discussions between the AO and the assessee in terms of estimating the net profit rate once the books of account have been rejected. As part of that discussion, it is noted that in response to AO's show-cause as to why 8.5% net profit rate should not be allowed, the Id. AR has submitted that if the net profit at the rate of 8.5% is applied, then the deduction on account of payment of hiring charges for machin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is sustained." Following the order of the Coordinate Bench of this Tribunal (supra) we delete the addition made by the Assessing Officer on this account. 6. Ground No.3 of the assessee's appeal is regarding disallowance made U/s 43B of the Act. The ld AR of the assessee has submitted that the Assessing Officer has made an addition on account of service tax U/s 43B of the Act. He has further submitted that the assessee has not made any claim of expenditure in the P&L account or in computation of income on account of service tax payable, therefore, no disallowance is called for U/s 43B of the Act. In support of his contention, he has relied upon the decision of Hon'ble Bombay High court in the case of CIT Vs Knight Frank (India) Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es that the issue stands concluded against the Revenue by the decision of this Court in Commissioner of Income Tax Vs Ovira Logistics Pvt. Ltd. 377 ITR 129 and Commissioner of Income Tax Vs Calibre Personnel Service Pvt. Ltd. (Income Tax Appeal No. 158 of 2013) rendered on 2nd February, 2015. (c) In view of the above, the question (ii) as proposed is covered by the decision of this Court. Therefore, it does not give rise to any substantial question of law. Thus, not entertained." Following the decision of the Hon'ble Bombay High Court cited above, the disallowance made by the Assessing Officer is not sustainable. However, subject to the verification of the fact that the assessee has not made any claim while computing its taxable income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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