M/S SHYAM ENTERPRISE,,RAJKOT-GUJARAT vs. THE INCOME TAX OFFICER, WARD-1(3),, RAJKOT-GUJARAT

Briefly stated facts are that the assessee in the present case is a partnership form and is the franchisee of M/s Fit and Hit Retail Private Ltd. The assessee among other parties has paid the rent to one of the parties, namely Smt. Sardaben Dineshbhai Tilava for ₹1 lakhs. But she denied having received any rent from the assessee in response to the notice issued under section 133(6) of the Act. The assessee has also not produced any documentary evidence in support of such rent expenses. The assessee finally agreed before the AO for the disallowance of such rent expenses. Accordingly, the AO added the same to the total income of the assessee.

The assessee before the learned CIT (A) submitted that the payment for the rent was paid by one of the partners of the firm on behalf of the firm. The assessee in support of his claim also filed the copy of the bank passbook and the agreement.

However, the learned CIT (A) disregarded the contention of the assessee by observing as under:

The learned AR before us filed the written submission which reads as under:

On the other hand, the learned DR vehemently supported the order of the authorities below.

We have heard the ld. DR and perused the materials available on record. At the outset, we note that the AO has made the confirmation for the rent expenses claimed by the assessee by observing that the learned AR for the assessee agreed for such disallowance. We further note that the assessee has not agitated the finding before the learned CIT (A). Similarly, we also note that there was also no such ground of appeal raised by the assessee in the appeal filed before us. The learned AR for the assessee has also not brought anything on record contrary to the finding of the AO. Thus in the absence of any contrary information/evidence qua to the finding of the AO, we do not find any reason to interfere in the order of the authorities below. Hence we dismiss the ground of appeal raised by the assessee.

The assessee in the year under consideration has claimed the credit of the TDS of ₹1, 40,426.00 which was claimed by the assessee as deducted by M/s Fit and Hit Retail Private Ltd., but the AO did not give the credit of such TDS amount for the two reasons. Firstly, the party did not respond to the notice issued under section 133(6) of the Act. Secondly, the amount of TDS was not reflecting on the database of the income tax Department.

The aggrieved assessee preferred an appeal to the learned CIT (A) who has confirmed the order of the AO by observing as under: 4.2 I have carefully considered the appellant’s contention and the assessment order. The appellant’s claim that the entire income has been taxed is incorrect. The A.O has denied credit of tax to the extent of Rs.1,40,426/- as the deductor was not traceable and the TDS amount is not reflected in the e-TDS data. The decision relied upon by the appellant is on altogether different facts. In the said decision relied upon by the appellant is on altogether different facts. In the said decision, the TDS credit was not given as some of the TDS certificates were in the name of the directors and not in the name of the firm. It was held by the Hon’ble High Court that the assessee was entitled to credit of TDS whether the certificate was issued in the name of JV or director of assessee-company. The present case is totally different and the ratio of the decision relied upon by the appellant is not applicable in this case. The disallowance of TDS credit by the A.O is upheld. This ground of appeal is dismissed.

The learned AR before us filed a written submission which reads as under: 2. The assessee received Form no. 16A from M/s. Feet and Hit Retail Pvt. Ltd., Ahmedabad showing TDS of Rs. 1,40,426/-. Since the directors of the above company are absconded and it is not known why the confirmation is not received but the factual aspect remains that the Ld. A.O. has taxed the entire amount as receipt from the assessee and once department taxed the same, denial to give credit is erroneous and as per settled law credit may kindly be directed to be given. The assessee also relied the decisions of Hon. Andhra Pradesh High Court in the case of Bhurathnam & Co. 357 ITR 396 (AP) (copy enclosed). 3. It is also submitted that the judicial guidelines contained in the following cases to give credit of TDS in veriablly when TDS payment is deducted and not paid to the Government: 1. 278ITR 206 (Hon. Karnatak High Court) - Smt. Ansuya Alva 2. 293 ITR 539 (Hon. Bombay High Court) - Yashpal Rahane. 3. 222 ITR 489 (Hon. Gauhati High Court) - Omprakash Gattani

On the other hand, the learned DR vehemently supported the order of the authorities below.

We have heard the ld. DR and perused the materials available on record. At the outset, we note that the learned AR has not brought anything on record contrary to the finding recorded by the authorities below. In our considered view the onus lies on the assessee to substantiate its claim. There was no tangible material on record suggesting that the party deducted the TDS. Thus in the absence of any documentary evidence about the deduction of the TDS by the party, we do not find any reason to interfere in the finding of the authorities below. Accordingly, the case laws referred by the learned counsel for the assessee do not apply to the present facts of the case. Hence the ground of appeal of the assessee is dismissed.

In the result, the appeal filed by the assessee is dismissed.