M/S M. K. GUPTA & CO.,SILIGURI vs. DCIT, CIR-2, SILIGURI, SILIGURI

This appeal filed by the assessee is directed against the order of Ld. CIT (Appeals) Siliguri dated 22.09.2015 and the grounds raised

For that on the facts and in the circumstances of the case, Ld. CIT (A) erred in confirming the disallowance of Rs. 2,26,100/- made by the A.O. on account of payment made for Drilling Charges by wrongly invoking the provisions of sec. 40(a)(ia) r.w. sec. 194C of the Act.

For that on the facts and in the circumstances of the case, the Ld. CIT (A) was not justified in confirming the addition to the tune of Rs. 1,39,595/- out of the total addition of Rs. 2,79,190/- made by the A.O. in respect of alleged accrual of foreign J.V. profit.

For that on the facts and in the circumstances of the case, the Ld. CIT (A) was not justified in confirming the estimated disallowance of Rs. 2,19,299/- made by the A.O. on account of Consumable Kerosene Oil expenses.

We have heard the arguments of both the sides and also perused the relevant material available on record. At the time of hearing before us, the learned counsel for the assessee is not pressed ground no 1 and 5 raised by the assessee in this appeal. The same are accordingly dismissed as not pressed. As regards the issues raised in ground no 2 to 4 relating to the various disallowances made by the A.O. under section 40(a)(ia) and confirmed by the Ld. CIT (A), the limited contention raised by the learned counsel for the assessee is that amounts in question disallowed under section 40(a)(ia) having been already offered to tax by the concerned payee, the assessee cannot be treated as assessee in default for non-deduction of tax at source from the said payments and there is no question of making disallowance under section 40(a)(ia) as held by the Hon’ble Supreme Court in the case of Hindustan Coca Cola Beverages Pvt. Ltd. vs CIT 3 Assessment Year: 2012 -13 M/s. M.K. Gupta & Co. reported in 293 ITR 226 (SC). He has submitted that the Assessing Officer may follow this claim of the assessee. The learned DR has not pressed any objection in this regard. We accordingly restore these issues to the file of the Assessing Officer for the limited purpose of verifying the claim of the assessee that the concerned payees have already paid tax on the amounts in question paid by the assessee and accordingly allow appropriate relief to the assessee keeping in view the decision of Hon’ble Supreme Court in the case of Hindustan Coca Cola Beverages Pvt. Ltd. (supra). Ground no 2, 3 and 4 of the assessee’s appeal are accordingly treated as partly allowed for statistical purposes.

As regards the issue involved in ground no 6 relating to the disallowance of Rs. 2,19,299/- made by the A.O. confirmed by the Ld. CIT (A) out of consumable kerosene oil expenses, it is observed that total expenses of Rs. 43,85,970/- were claimed by the assessee on purchase of kerosene oil. During the course of assessment proceedings, A.O. examined the claim of the assessee for the said expenses and found that the expenses claimed by the assessee on purchase of kerosene oil were supported only by self-made vouchers. Although he found merit in the contention raised on behalf of the assessee that the consumption of kerosene oil at different sites for the work was inevitable, he held that the expenses claimed by the assessee on purchase of kerosene oil were not fully verifiable for want of proper bills and vouchers. He accordingly disallowed expenses claimed by the assessee on purchase of kerosene oil to the extent of Rs. 2,19,299/- being 5% of the total expenses claimed by the