TOSHKUMAR HARIBHAU PATIL,MUMBAI vs. INCOME TAX OFFICER WARD-2(4), KALYAN

PDF · subscribers
ITA 6240/MUM/2017Status: DisposedITAT Mumbai31 January 2018AY 2013-144 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal restored the issue of disallowance of purchases to the AO for fresh consideration with additional evidence. For the disallowance of labour charges, the Tribunal followed a High Court decision and restored the issue to the AO for fresh decision.

What were the facts?

The assessee failed to deduct tax at source on certain labour charges and direct expenses. The Assessing Officer (AO) made an addition under Section 40(a)(ia) of the Income Tax Act. The CIT(A) partly allowed the appeal.

What were the issues?

Whether disallowance under Section 40(a)(ia) is justified when the payee has offered the income to tax, and whether additional evidence should be admitted for fresh consideration by the AO.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 194C,Section 194J

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI D.T. GARASIA

For Appellant: Shri Devendra Jain, A.R
For Respondent: Ms. N. Hemalatha, D.R
Hearing: 21.12.2017Pronounced: 31.01.2018

Per D.T. Garasia, Judicial Member:

1.

The present appeal has been preferred by the assessee against the order dated 21.07.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2013-14.

2.

The only grounds in this appeal taken by the assessee are in relation to confirmation of disallowance of purchases of Rs.7,24,716/- u/s 40(a)(ia) and confirmation of disallowance of labour charges of Rs.5,82,202/- u/s 40(a)(ia) of the Act.

3.

The brief facts of the case are as under:

2 Mr. Toshkumar Haribhau Patil On going through the profit and loss account, as per schedule 'I', the assessee has incurred expenses on account of labour charges and direct expenses. In the course of assessment proceedings, the complete details of the above expenses were called for. The assessee has submitted the list of parties of labour purchase of Rs.22,64,958/-. The assessee was liable to deduct tax at source on Rs.19,65,609/-. The assessee failed to make TDS as per the provisions of section 194C. Therefore, the addition of Rs.19,65,609/- was disallowed under section 40(a)(ia) of the Act read with section 194C of the Act.

4.

Before the Ld. CIT(A) there was no explanation in respect of Rs.6,58,691/- and the appeal was partly allowed by the Ld. CIT(A).

5.

Before me assessee did not raise any ground regarding the addition of Rs.6,58,691/-. In respect of addition of Rs.6,24,614/- assessee submitted that the addition is not called for because section 194 does not apply to this payment. The assessee has submitted the bills which were not discussed in the grounds of appeal as well as statement of facts. Therefore, Ld. CIT(A) did not admit the same. But Ld. A.R. submitted that in the similar kind of additional evidence was submitted before the Ld. CIT(A) and Tribunal has restored this matter back to the file of AO, therefore this matter may be restored to AO.

6.

I have gone through the order of Tribunal in and admit the bills. Hence, I restore this matter back to the file of AO to decide the matter afresh in accordance with

7.

In respect of addition of Rs.5,82,202/-, the Ld. A.R. relied upon the decision of Hon’ble Delhi High Court in the case of CIT vs. Ansal Land Mark Township (P.) Ltd. (2015) 61 taxmann.com 45 (Delhi) wherein the High Court has held that where assessee made payments without deducting tax at source under section 194J, since payee had filed return and offered sum received from assessee to tax, impugned disallowance made under section 40(a)(ia) deserved to be deleted.

8.

I find that deductee has already deducted tax at source. Therefore, following the decision of Hon’ble Delhi High Court in the case of CIT vs. Ansal Land Mark Township (P.) Ltd. (supra), I restore this issue back to the file of the AO to decide it afresh as per law.

9.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 31.01.2018.

More judgments on Section 40(a)(ia)

All 7,300 judgments and leading authorities on Section 40(a)(ia) →

Recent GST High Court judgments

Search GST case law →