ACIT,CIRCLE-1,SOLAPUR, SOLAPUR vs. YUVRAJ PATIL AND COMPANY, TALSANGI

Facts of the case, in brief, are that the assessee is a partnership firm and engaged in construction business such as construction of roads and canals, etc. It filed its return of income on 28.10.2023 declaring total income of Rs.2,81,78,480/- which includes business income of Rs.2,61,32,541/-. The case was selected for scrutiny under CASS for the following reason: “(i) Business purchases made by the assessee and no TDS deducted u/s 194Q”

Accordingly statutory notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was issued and served on the assessee. Thereafter notice u/s 142(1) of the Act along with a questionnaire was issued and served on the assessee in response to which the assessee filed the requisite details from time to time. The Assessing Officer in the order passed u/s 143(3) r.w.s. 144B of the Act made addition of Rs.4,35,09,020/- being 30% of the purchases of Rs.14,50,30,066/- on which the assessee has not deducted TDS u/s 194Q of the Act.

Before the Ld. CIT(A) / NFAC the assessee filed certain additional evidences in the shape of Form 26A certificates obtained from the various parties duly issued and signed by the Chartered Accountant as per Rule 31ACB according to which each of the payees has duly included the corresponding receipts in their respective returns of income filed u/s 139 of the Act and that the tax liability on such receipts has already been discharged. Based on the additional evidences filed by the assessee, the Ld. CIT(A) / NFAC deleted the addition by observing as under:

Aggrieved with such order of the Ld. CIT(A) / NFAC, the Revenue is in appeal before the Tribunal by raising the following grounds: 1. Whether on the facts and circumstances of the case and in law, the CIT(A) NAFC has erred in admitting the additional evidences regarding disallowance of Rs.4,35,09,020/- on the account of non-deduction of TDS u/s 194Q r.w.s. 40a(ia) without giving opportunity to the AO to examine the

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. It is an admitted fact that due to non-deduction of TDS on purchases of Rs.14,50,30,066/- as per provisions of section 194Q, the Assessing Officer made addition of Rs.4,35,09,020/- by disallowing 30% of such purchases. We find the Ld. CIT(A) / NFAC, on the basis of certain additional evidences filed before him, deleted the addition made by the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraphs. It is the case of the Revenue that the Ld. CIT(A) / NFAC without calling for a remand report from the Assessing Officer has accepted the additional evidences in violation of Rule 46A of the IT Rules, 1962 and deleted the disallowance made by the Assessing Officer which is not correct.

We find some force in the above arguments of the Ld. DR. Admittedly the assessee has not filed the Form 26A certificates obtained from all the five concerned parties according to which each of the party has duly included the corresponding receipts in their respective returns of income filed u/s 139 of the Act

In the result, the appeal filed by the Revenue is allowed for statistical purposes.