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TMI Blog2018 (1) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... (A). But CIT(A) has introduced an altogether new aspect, that is, no TDS having allegedly been made by the assessee on payment made to the sub contractor - as the assessee has merely passed on the amount to the sub-contractor and TDS stands duly made thereon. That being so, there is, evidently, no violation of the provisions of section 40(a)(ia)- That being so, the addition made by the ld. CIT(A) is deleted. - Decided in favour of assessee - I.T.A No. 54/Agra/2017 - - - Dated:- 8-1-2018 - SHRI A. D. JAIN, JUDICIAL MEMBER For The Assessee : Shri Rajendra Sharma, AR For The Revenue : Shri Waseem Arshad, Sr. DR. ORDER This is assessee s appeal for assessment year 2010-11, contending that the ld. CIT(A) is not justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as declared. During the course of assessment proceedings, the AO observed that the assessee had not disclosed tax receipts from PWD, NH division, Gwalior and GMMPRDA, PIU, Vidisha amounting to ₹ 2,51,983/- and ₹ 54,718/-, respectively totaling to ₹ 3,06,701/- in its profit and loss account. The AO, then, asked the assessee to explain the same. The assessee informed that the above two works were sub-let to a sub-contractor, since the assessee was not ready to carry out these works. It was informed that the entire amount was passed on to the sub-contractor on 'no profit and no loss' basis, since these works were to be completed as per the terms of the tender and the work order. The assessee produced a copy of the led ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no profit no loss' terms. It is undisputed that the appellant had made payment of ₹ 3,06,701/- the sub-contractor, however without deducting any tax u/s 194C. Keeping in view the above, the addition is being confirmed, however u/s 40(a)(ia), even though the Ld. AO has not invoked that section. In view of this, the ground No.2 of the appeal is dismissed. 6. Before this Bench, on behalf of the assessee, by way of a written Synopsis, as well as the oral arguments, it has been contended that: That the above appeal has been preferred by the appellant against the addition for ₹ 3,06,701/- sustained by the learned CIT (Appeals), made by the AO by disallowing of the expenditure under Section 40 (a)(ia) paid to sub contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o to sub-Section (1) of section 201, wherein it is mentioned that where the person to whom any sum is paid with deduction of tax and the payee (recipient) of the amount has furnished the return of income under section 139 and has taken into account such sum for computing of his income and has paid the tax on such income and, if he furnishes a certificate to this effect, then the person responsible for making payment or for deduction of tax shall not be treated in default. As per provisions of section 191, it is clearly mentioned that if the AO is satisfied that the recipient of the amount has not included this sum paid to him in his income and also has not paid tax thereof, then the assessee is responsible for making payment and for deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is against the provisions of above Sections. As per decisions, as referred above, non disallowing is called for till the AO is satisfied that the person to whom the assessee has made payment, has not included such amount in his total receipt and also has not paid the tax thereon, disallowance made under Section 40(a)(ia) of the Income Tax Act is not valid, the deduction made on this account is liable to be deleted. 7. Per contra, the ld. DR has placed strong reliance on the impugned order. It has been contended that this is not a case of a mere disallowance, but of non-TDS. Strong reliance has been placed on the impugned order. 8. I have heard both the parties and have perused the material on record. The AO took note of the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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