ACIT, CHANDIGARH vs. SH. RAKESH KUMAR, CHANDIGARH

(िनधा�रणवष� / Assessment Year: 2009-10) ACIT-Range 5 Sh. Rakesh Kumar बनाम/ Chandigarh. # 38, Sector 27-A, Chandigarh. Vs. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AGOPK-7454-J (अपीलाथ�/Appellant) (��थ� / Respondent) : & CO. No. 19/CHANDI/2015 (In (िनधा�रणवष� / Assessment Year: 2009-10) Sh. Rakesh Kumar ACIT-Range 5 बनाम/ # 38, Sector 27-A, Chandigarh. Chandigarh. Vs. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AGOPK-7454-J (अपीलाथ�/Appellant) (��थ� / Respondent) : Assessee By : Sh. Ajay Jain (CA) – Ld. AR Revenue By : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 03-04-2025 घोषणाकीतारीख /Date of Pronouncement : 21-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2009-10 arises out of an order of learned Commissioner of Income Tax (Appeals)-2, Chandigarh [CIT(A)] dated 26-03-2015 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.143(3)of the Act on 23-12-2011. The assessee has filed cross-objection challenging the disallowances as sustained in the impugned order. Having heard rival submissions and upon perusal of case records, the appeal as well as cross-objection is disposed-off as under. The assessee is stated to have carried out earth work during the year. The issues that form part of subject matter of dispute before us are adjudicated as under.

2.5 The Ld. Assessee incurred earth work expenses and transport charges without deduction of tax at source. The Ld. AO accordingly disallowed amount of Rs.165.89 Lacs u/s 40(a)(ia). 2.6 In form 26AS, the assessee had receipts Rs.13.14 Lacs. Since the same was not shown by the assessee, Ld. AO added the same to the income of the assessee but allowed TDS credit against the same. Appellate Proceedings 3.1 The Ld. CIT(A) noted that the assessee was owner of 8 trucks in financial year 2007-08 and it declared income u/s 44AE. Therefore, it was not liable for Tax Audit in immediately preceding AY 2008-09. This being the case, the provisions of Sec.194A(1) and 194C(2) would apply which provide that the assessee was not mandated to deducted TDS on interest payments (194A) and contractual payments (194C) in this year. Accordingly, the disallowance as made by Ld. AO was deleted. 3.2 On interest disallowance of Rs.16.87 Lacs, it was observed that the loan was taken by pledging two properties as belonging to the assessee. The name of wife and sons was included as co-applicant for the sake of eligibility of loans. The loans were utilized for business purposes. However, Ld. CIT(A) rejected the same and confirmed this interest disallowance. 3.3 On interest disallowance of Rs.44.82 Lacs, Ld. AO was directed to disallow interest on pro-rata basis. It was observed that while computing disallowance, Ld.AO should have reduced the interest disallowance of Rs.16.87 Lacs.

3.4 On the issue of receipts in Form 26AS, Ld. AO was directed to re- verify the claim of the assessee since it was contended that the same were refunded / reflected twice. 3.5 Aggrieved, the revenue is in further appeal before us whereas the assessee has preferred cross-objections against the same. Our findings and Adjudication 4. From assessee’s computation of income for AY 2008-09 as placed on record, it could be seen that the assessee has declared income from trucks u/s 44AE of the Act. If transportation charges are reduced from business receipts, the other turnover would be Nil and there would no liability on the assessee to carry out tax audit u/s 44AB. This being the case, the assessee is not liable to deduct tax at source u/s 194C or u/s 194A in this year as correctly held by Ld. CIT(A) considering the provisions of Sec.194A(1) and 194C(2). Therefore, no fault could be found in the impugned order to that extent. The corresponding grounds as raised by the revenue stand dismissed.