SHAIKH SAMIM,KOLKATA vs. I.T.O., WARD - 50(1), KOLKATA

Brief facts of the case of the assessee is that the assessee is engaged in the business of manufacturing of gold ornaments and their sell locally as well as through Assessment Year: 2018-19 Shaikh Samim export. The assessee filed its return of income for the AY 208-19 declaring total income of Rs. 1,39,39,640/-. The case of the assessee was selected for scrutiny, notice u/s 143(2) was issued and subsequently notice u/s 142(1) along with questionnaire were also issued to the assessee. In response to the show cause notice, the assessee furnished his reply. The AO after considering the submission of the assessee assessed the total income of the assessee at Rs. 2,36,61,630/-.

The said order has been challenged by the assessee before the Ld. CIT(A) where in the Ld. CIT(A) has confirmed the addition made u/s 40A(ia) amounting to Rs. 66,65,885/- but allowed the appeal of the assessee with regard to claim U/s 10AA by giving direction to the AO to recompute the income of the assessee after allowing exemption of Rs. 1,12,59,817/- u/s 10AA of the Act.

The Ld. A.R challenges the impugned order thereby submitting that the assessee had already submitted profit and loss account in respect of salary of Rs. 2,21,18,273/- comprising of salary of Rs. 1,14,61,773/- and wages of Rs.1,06,56,500/- and job work charges of Rs. 1,01,346/-. There had not been any requirement of TDS since in none of the cases there had been any requirement of deduction of tax at source u/s 192 and/or 194C of the Act. The Ld. Counsel further submits that assessment order reveals that the AO assumed of two alleged defaults in regard to TDS on salary payment and job work charges and by applying Section 40a(ia) he disallowed 30% of Rs. 2,22,19,619/- and consequently a disallowance of Rs. 66,65,885/- was made. The Ld. Counsel further submits that none of the cases coming under salary (salary and wages) and job work charges there had been any requirement of TDS. The Ld. Counsel drew attention of the Tribunal of form no. 3CD wherein the addition inadmissible u/s 40a has clearly been depicted. He had also drawn the attention of para 34 of Form no. 3CD wherein it has clearly been mentioned that whether the assessee is required to deduct / collect tax as per the provisions of Chapter XVII-B or Chatper XVII-BB. The submission of the ld. Counsel for the assessee is that disallowance of Rs. 66,65,885/- may kindly be deleted.

Upon hearing the submission of the ld. Counsel of the respective parties, we have perused the order of Ld. CIT(A) and find that the Ld. CIT(A) has confirmed the order of AO by holding that the assessee has furnished list of such persons to whom salary/wages/job work charges have been paid. As per the Ld. CIT(A)’s order, PAN are not mentioned against any of the persons. No confirmation from any person has been furnished by the assessee in support of amounts received by them. Now, we have perused the form no. 3CD and find that at page nos. 6 to11 a draft has been mentioned. The relevant portion of the form no. 3CD are hereby extracted below: