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TMI Blog2019 (4) TMI 1656X X X X Extracts X X X X X X X X Extracts X X X X ..... hase of gift items - assessee has fairly agreed that assessee has not submitted purchase bills and other required documents to prove the bona file of purchases - HELD THAT:- As based on the submissions made by the ld. Counsel and ld DR for the Revenue that the deduction of TDS u/s 40a(ia) of the Act and purchases made by the assessee needs to be examined by the Assessing Officer, therefore we are of the view that purchases from M/s Tirupati Mercantile Trading Co. Ltd and purchases of gift items from M/s G.B. Promoters should be remitted back to the file of the Assessing Officer for his necessary verification. Therefore, we allow this grounds of appeal raised by the assessee for statistical purposes. - ITA No.158/Kol/2017 - - - Dated:- 24-4-2019 - Shri A.T. Varkey, JM And Dr. A.L. Saini, AM For the Assessee : Shri Subash Agarwal, Advocate For the Respondent : Shri Robin Chowdhury, Addl. CIT Sr. DR ORDER PER DR. A. L. SAINI: The captioned appeal filed by the Assessee, pertaining to assessment year 2011-12, is directed against an order passed by the learned Commissioner of Income Tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold which is reproduced below: From the examination of details in respect of property at 157, Rabindra Sarani, it was observed by AO that the total area of the property is 18178.66 sq ft. Book value transferred from fixed asset is ₹ 25,08,797/- and cost of improvement is ₹ 37,29,731/-. The per square feet value of the property is thus ₹ 343.18 [{37,29,731 +25,08,797}/18178.66]. Hence, the valuation of the closing stock of such property shall be ₹ 54,81,840/- [343.18 x 15973.66]. Similarly, the valuation of closing stock of property at 159, Rabindra Sarani as per the submission of the assessee is arrived at ₹ 1,92,51,361/- [{(23,52,484+1,74,25,186)/43402.65} X 42,247.65]. However, the valuation of closing stock for such properties are disclosed at ₹ 22,04,490/- and ₹ 1,69,61,480/- respectively. The assessee was, therefore, required to explain, why the valuation of closing stock of the properties at 157, Rabindra Sarani and 159, Rabindra Sarani together shall not be considered at ₹ 2,47,33,180/- [54,81,819+1,92,51,361] as against ₹ 1,91,65,970/- [22,04,490+1,69,61,480] disclosed by assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dra Sarani 159 Rabindra Sarani is considered at ₹ 2,47,33,180/- as against ₹ 1,91,65,970/-. Hence, the difference of ₹ 55,67,210/- (Rs.2,47,33,180- ₹ 1,91,65,970), short credited in the accounts of the assessee, was added back to the total income of the assessee. 7. Aggrieved by the stand so taken by the Assessing Officer, the assessee carried the matter in appeal before the Ld. CIT(A) who has confirmed the addition made by the Assessing Officer. Aggrieved, the assessee is in appeal before us. 8. Before us, ld Counsel for the assessee has reiterated the submissions made before the authorities below. On the other hand, the ld. DR has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity. 9. We have heard both the parties and perused the material available on record.We note that the assessee, Onkar Paribahan Finance Private Limited(OPFPL), has two old buildings which are situated at 157 Rabindra Sarani, Kolkata 700007 and 159 Rabindra Sarani, Kolkata 700007. The building have separate flats and the fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tionate renovation expenses incurred of ₹ 37,29,731/- and ₹ 23,52,484/- for the two buildings: (i) Building No. 157 RabindraSarani, Kolkata 700007 at ₹ 54,81,819/-; and (ii) Building No.159 RabindraSarani, Kolkata 700007, at ₹ 1,92,51,361/-. Thus, totaling to ₹ 2,47,33,180/- (Rs. 54,81,819+ ₹ 1,92,51,361). We note that the renovation expenses in respect of property at 157, Rabindra Sarani and 159, Rabindra Sarani were borne exclusively in respect of the areas sold. The assessing officer has failed to bring any cogent evidence on record to show that these expenses were not borne exclusively in respect of the areas sold. Hence, the assessee, OPFPL has applied renovation expenses incurred of ₹ 37,29,731/- and ₹ 23,52,484/- for the sold flats of the two buildings to determine surpluses from the sale of flats of the said two buildings. Based on this factual position we allow the ground No.1 raised by the assessee. 11. Ground No. 2 raised by the assessee relates to disallowance and addition made by the Assessing Officer u/s 40(a)(ia) of the Act in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of business promotion expenses that the assessee had failed to deduct tax at source on payment of ₹ 5,95,598/- to one M/s. G.B.Promoters and on payment of ₹ 67,067/- to M/s. Dreamz Kraft. The assessee was asked to furnish details and evidences in support of such claim. The assessee was, therefore, required to explain why the sum of ₹ 5,95,598/- and ₹ 67,067/- shall not be disallowed u/s 40(a)(ia) of the Act for violation of provisions of Chapter XVII-B of the Act. 14. In response, the assessee submitted reply. After going through the submission of the assessee, on the issue of payment to M/s. Tirupati Mercantile Trading Co Ltd, the AO noted that from para-15 of Notes to Accounts of the Audited Accounts regarding related party disclosure, it was observed that the assessee and M/s. Tinipati Mercantile Trading Co Ltd are under the same management and, therefore, the difference in the quantum of sales made by M/s. Tirupati Mercantile Trading Co Ltd and the payments made by the assessee under the nomenclature of sales is unexplainable. Therefore, the sum of ₹ 1,89,96,589/- paid to M/s. Tirupati Mercantile Tradin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of purchase above 10 lakhs from party. Hence, it is purchase from the said party, so there was no question to deduct the TDS u/s 194C. However, ld DR for the Revenue submitted before us that assessee has not produced the purchase bills and other details of the said party before AO, therefore, the assessee has failed to prove the bona fide of these purchases. 18. We note that assessee, OPFPL , claimed to have purchased some gift items worth ₹ 5,95,598/- for the purpose of its business promotion. These gift items were purchased from M/s G.B. Promoters. The assessee paid the amount of ₹ 5,95,598/- to M/s G.B. promoters for purchase of said gift item. This payment was made through account payee cheque. Later on, the party to whom payment was made did not deliver the gift item therefore, the assessee has written off the said amount in the books of the assessee, as bad debts. The ld Counsel submitted before us that this amount is in the nature of Bad debts and it was by mistake appeared in business promotion ledger account,hence, there is no question arises to deduct TDS on said amount. The ld Counsel submitted before us that the assessee company was not lia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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