PRITHISH DAS,KOLKATA vs. ITO, WD-33(3), KOLKATA, KOLKATA

The appeal filed by the assessee is against the order of Ld. CIT(A)-9, Kolkata dated 15.03.2016 for AY 2010-11.

At the outset itself, the Ld. Counsel for the assessee drew our attention to ground no. 3A which the assessee has preferred as additional ground vide letter no. 19.12.2017 and he submitted that he is pressing only this ground for adjudication and he is not pressing original ground nos. 1 to 3 filed along with the appeal, therefore, ground nos. 1 to 3 originally raised grounds of appeal stand dismissed.

The additional ground of appeal preferred by the assessee is as under:

Brief facts of the case are that the assessee is a government contractor and sole proprietor of the firm M/s. Das Enterprise and Shri Das under the banner M/s. Das Enterprise. During scrutiny assessment, the AO found that the assessee has made payment of Rs.50,97,955/- as labour charges to six contractors and since tax has not been deducted at source he applied sec. 40(a)(ia) of the Income-tax Act, 1961 (hereinafter referred to as the 2 Prithish Das., AY- 2010-11 “Act”) and disallowed the said sum of Rs. 50,97,955/-. Aggrieved by the order of the AO, assessee preferred an appeal before the Ld. CIT(A), who confirmed the action of AO and dismissed the ground of appeal of assessee. Aggrieved, assessee preferred this ground of appeal before us.

We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee is a govt. contractor who has realized an amount of Rs.1,74,79,931/- from the contract work with the Govt. The assessee in its P&L Account has clearly shown the labour charges disbursed by him at Rs.46,23,213/- whereas the AO has disallowed Rs.50,97,955/-. We note that Rs.46,23,213/- which was given on account of labour charges to six contractors. The details of the amount debited in the P&L Account actually disallowed by the AO is given in a chart at page 2 of the Ld. CIT(A), which is as under:

From a perusal of the aforesaid chart it is clear that the labour charges given by the assessee to the aforesaid contractors are to the tune of Rs.46,23,213/-. The amount disbursed for purchase of material to the aforesaid contractors three in numbers is as given below:

In the result, appeal of assessee is partly allowed.