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TMI Blog2024 (6) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... hod - in the light of provisions of section 194C held that 30% of these expenses is liable to be sustained for the reason that TDS was not deducted, Whether when following and accepted method of accounting which is POCM Method in this case, the assessee estimates and makes accounting provisions towards the unfinished work, the provisions of TDS under Section 40(a)(ia) of the Act are attracted or not.? - HELD THAT:- We are of the considered view that there is no error in the findings of the CIT (Appeals) in regard to both the counts of disallowances under Section 40A(ia) and section 40B of the Act. Once the assessee claims that while following percentage of completion method at 100% of the revenue of the project has been recognized, it was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 143(1) of Income-Tax Act, 1961 (hereinafter referred as the Act ) by the ITO, Ward 4(4), Gurgaon (hereinafter referred as the Ld. AO). 2. The assessee had filed return of income of Rs. 92,06,590 which was selected for complete scrutiny and during the course of assessment proceedings, learned Assessing Officer had examined the expenses debited in regard to the sets under consideration. Learned Assessing Officer observed that assessee was following percentage method of accounting in respect of construction business being done by him. The learned Assessing Officer taking into consideration that completion certificate was received and disallowed Rs. 5,36,19,000 towards the provisions made for unfinished work and claimed as expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been accounted for as completed project under POCM Method. 2. The order of Ld. CIT(A) of holding the applicability of provisions of section 40(a)(ia)/43B of the Income-Tax Act is bad in law in as much as it is against the system of accounting regularly and consistently followed by the assessee for revenue under POCM method read with Guidance Note on Real Estate Transaction of 2012. 3. That the Ld. CIT(A) has failed to appreciate that there is no finding of the A.O that the estimation of total revenue and total expenditure necessary for determining profit under the POCM Method were not fair and true and further the CIT(A) has also not disputed the same. In absence of such findings no disallowance could be made u/s 40(a)(ia)/43B @30% of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the learned CIT (Appeals) had accepted the fact that assessee was consistently following system of accounting then the disallowance made by the learned CIT (Appeals) is not sustainable. 6. Learned Departmental Representative, however, submitted that there is no error in the findings of learned tax authorities below. 7. In regard to these ground nos. 1 to 4, it comes up that the learned CIT (Appeals) had benefited the assessee accepting the plea that as the assessee following POCM Method for project to accounting, elements of assumptions is inherent and accordingly made the deletion made by the Assessing Officer. However, learned CIT (Appeals) considered the fact that there were certain expenditure of the nature UP VAT tax amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also been explained as to why the provisions of TDS were not applicable and such method employed by the assessee year after year on completion of project has been explained and accepted in all earlier assessment years. Keeping in view our detailed submissions and without prejudice to all other submissions especially submission dated 09.05.2022 wherein details of amounts have been provided, it is submitted that the disallowance made by the Assessing Officer at Rs. 53,61,93,000/- should be restricted to Rs. 6,84,20,113/- being 30% as per the applicable provisions of section 40(a)(ia) of the income-tax Act, for which also we request your honour to give directions to allow such amounts as per the provisions of law in the respective year in whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge Solution Signages purchase 17,46,004 8. National Barbed wire purchase 85,793 9. Acme C C Product R CC Drain Cover purchase 26,278 10. Dinesh Sanity Store Upvc pipe fitting purchase 6,47,862 11 Ncubate India service Pvt. Ltd. R O System purchase 66,65,185 12 CEMENT+Steel Material purchase 7,01,344 13 Miscellaneous Exp Other petty purchases 2,56,78,180 14 Project over head Purchase of day to day item and day to day expenditure 73,30,090 15 Employee Cost Payment to employees 6,13,35,323 16 Electricity Charges Paid to the Government for purchase of connection 1,00,74,488 17 Unutilized input Service Tax 14,42,406 18 Depreciation 2,97,029 19 Unutilized input GST 3,33,47,631 SUB TOTAL (8) 5,33,94,777 7,86,59,901 3,50,87,066 Grand Total 16,71,41 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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