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TMI Blog2025 (1) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... details. 4. During the course of assessment proceedings the Assessing Officer noted that the books of account of the assessee were audited as per the provisions of the Act. On further perusal of Form 3CD report for assessment year 2018-19 he noted that at serial no.34, the auditors have mentioned that the assessee is required to deduct or collect tax as per the provisions of Chapter XVII-B or Chapter XVII-BB. They have also mentioned that the assessee has not furnished the statement of tax deducted or tax collected within the prescribed time, etc. However, from the verification of the TDS details as submitted by the assessee, he noted that the assessee has shown large payments as contract payments to persons who have not filed the return of income for the relevant assessment year. From the various details furnished by the assessee, the Assessing Officer noted that the assessee has paid huge amount of sub-contract work to nine persons, the details of which are as under: S No Name, PAN and Current Address of the person Nature of work/services carried out by the contractor (copy of agreement) also Total payment made during relevant year Total payment made during one year pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) in the case of sub-contractor M/s. Shivam construction, the contract was awarded by the government department to the assessee on 03.05.2017 whereas the sub-contractor has raised the bill for work done on 01.05.2017 i.e. before allotment of work to the assessee; (b) in respect of sub-contractor D. Sairaj Realtech Pvt. Ltd., the payments made were prior to submission of bill on 04.08.2017; and (c) in respect of two bills of Ekdant Buildcon, there is discrepancy of date. In view of the above and in absence of non-furnishing of supporting documents to prove the genuineness of contractual payments, the Assessing Officer held that such sub-contract payments to the extent of Rs. 3,16,96,450/- is non-genuine and bogus. He, therefore, confronted the same to the assessee. Rejecting the various explanations given by the assessee, the Assessing Officer made addition of Rs. 3,16,96,450/- to the total income of the assessee and determined the taxable income at Rs. 3,66,58,340/-. 6. Before the Ld. CIT(A) / NFAC, the assessee made elaborate arguments and filed para-wise reply to the various allegations made by the Assessing Officer. It was further submitted that the assessee has shown net pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of 8% of the gross receipts recognized in the profit and loss account. 3. Whether on the facts and in the circumstances of the case and in law the Ld. CIT (A) (NFAC) has erred in estimating the income at 8% of the receipts despite the facts that: 3.1 the assessee had shown large payment as contract payments to persons who have not filed returns of income for the relevant Assessment Year. 3.2 The assessee has submitted copy of contract agreement only with Kunal Prakash Bhadane. On perusal of agreement, it is noticed that the agreement was executed on 20.11.2017 but registered on 30.12.2017. However, the assessee did not submit agreement with other sub-contractor. 3.3 The TDS was deposited on 07.01.2019 which was only after the filing of ITR for A.Y. 2018-19. Therefore, it is clear that at the time of audit, neither contract payment of Rs. 3,16,96,450/- nor any outstanding TDS liability was available in the books of accounts. On perusal of ITR and 3CD report, it was observed by the A.O. that the auditor has not disallowed any amount u/s 40(a)(ia) of the Act for not deducting the TDS on payment or has not paid before due date of filing ITR. 3.4 In most of the bills submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 184481022 8927090 4.84% 2020-21 105708520 6784193 6.42% 2021-22 187403346 9820491 5.24% Total / Avg. NP 685045945 36753097 5.37% 13. He further submitted that the allegation of the Assessing Officer that the payments have been made to the sub-contractors before the contract work awarded by the government is incorrect. He submitted that as per the submission filed the work was completed on 03.05.2017 and the contractor has raised the bill on 01.05.2017, however, the Assessing Officer mis-construed the submissions for which he has given such remarks. He submitted that since the Ld. CIT(A) / NFAC has directed the Assessing Officer to estimate the profit at 8% as against the profit rate shown by the assessee for different years ranging from 4.84% to 6.42% and the assessee has not filed any appeal, the Revenue should not have any grievance since the order of the Ld. CIT(A) / NFAC is justified under the facts and circumstances of the case. He also relied on the following decisions: 1. CIT vs. Subodh Gupta (2015) 229 Taxman 367 (Del) 2. DCIT vs. Poonam Dnyaneshwar Mahajan vide ITA No.956/PUN/2018, order dated 22.08.2022 3. ACIT vs. Shiv Shakti Construction [(2023) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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