SHAH TECHNICAL CONSULTANTS P. LTD,MUMBAI vs. ASST CIT RG 2(3), MUMBAI

Shah Technical Consultants P. Asst. Commissioner of Income Tax, Ltd. Range 2(3), Aayakar Bhavan 407 Raheja Cnetre, Free Press M.K. RD Journal Marg, Nariman Point Vs. Mumbai-400 020 Mumbai-400 021 PAN No. AADCS4968D Appellant .. Respondent Assessee by .. Dr.K Shivram & Mr. Rahul Hakani, AR Revenue by .. Mr.Vishwas Mundhe, DR .. Date of hearing 03-05-2017 Date of pronouncement .. 12-05-2017 O R D E R PER MAHAVIR SINGH, JM:

This appeal by the assessee is arising out of the order of CIT(A)-6 Mumbai, in appeal No. CIT(A)-6/IT-230/2009-10, Mumbai dated 21-01-2013. The Assessment was framed by ACIT 2(3), Mumbai for the A.Y. 2006-07 vide order dated 12-08-2008 u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).

The first two inter-connected issues in this appeal of assessee is as regards 2. to the order of CIT(A) confirming the disallowance of expenses of Xerox, Spiral Binding and lamination at Rs. 85,521/- and another expenses of maintenance charges of Rs. 2,89,997/- for non deduction of TDS under section 194(C) of the Act by invoking the provisions of section 40(a)(ia) of the Act. For this assessee as raised following ground No. 1 and 2: -

“1. The Ld. CIT(A) erred in confirming the disallowance of Rs. 85,521/- u/s 40(a)(ia) being Xerox charges paid, on the ground that no TDS has been Shah Technical Consultants P. Ltd.; AY:06-07 deducted, without appreciating the fact that no TDS is deductible on such charges.

At the outset, learned Counsel for the assessee stated that the expenses 3. claimed by assessee has already been disclosed by the recipient parties and included these receipts in the respective returns of income and this can be verified by the AO. In term of the proviso to section 40(a)(ia)of the act once the recipient has disclosed the receipt in their return of income the disallowance cannot be made. The learned Counsel for the assessee requested for set aside of this issue back to the file of the AO for verification purposes.

We have the rival contentions on this issue and gone through the facts and 4. circumstances of the case. We find that let this issue be remitted back to the file of the AO who will decide the issue in term of the decision of Hon’ble Delhi High Court in the case of CIT v. Ansal Landmark Townships Pvt. Ltd. [2015] 377 ITR 635 (Del). Accordingly, this to inter connected issues are remitted back to the file of the AO and allowed for statistical purposes.

The next two interconnected issues in this appeal of assessee is against the 5. order of CIT(A) confirming the addition of income from other sources at Rs.5,65,897/- and also confirming the addition of undisclosed income in stock and work in progress at Rs. 21,62,741/-. For this assessee has raised following ground No. 3 and 4: -

“3. The ld. CIT(A) erred in confirming the addition of Rs.5,65,897/- as income from other sources, without considering the submissions of the Appellant and without Page 2 of 4

Shah Technical Consultants P. Ltd.; AY:06-07 appreciating the fact the said amount was accounted for in the books of the assessee. Hence the said addition may be deleted.

We have heard the rival contention and gone through the facts and 6. circumstances of the case. At the outset, the learned Counsel for the assessee in respect to addition of income from other sources stated that AO on receipt of information from Dalal Mott. Mc. Donald noted that the payment of consultancy received by assessee was at Rs. 7,78,311/- as against the disclosed receipts at Rs. 5,51,250/-. Similarly, in the case of M/s Victory Custings, the payment of Job work was shown at Rs. 4,38,836/- as against the disclosed by assessee at Rs. 1,00,000/-. Therefore, the assessee has disclosed less receipt of Rs. 5,65,897/-, the AO added the same. The CIT(A) just burst aside the details filed before him and remand reports of the AO dated 18-01-2010 and dated 11-01-2012 was not at all considered, wherein complete evidences were filed before the AO during remand proceedings by the assessee and even before CIT(A) during appellate proceedings. We have gone through the remand report and noticed that all the aspects were discussed by the AO in remand report and assessee had produced complete details and reconcile the figures. Since, CIT(A) has not adjudicated the issue, in all probability we restore the matter back to the file of the AO for fresh adjudication. Needless to say that the assessee will produce all the details before the AO of his verification.

Shah Technical Consultants P. Ltd.; AY:06-07 file of the AO and AO vide remand report dated 18-01-2001 and 11-01-2012 has dealt with the issue in the remand report but CIT(A) has not at all considered the same. In the interest of justice and in fitness of things, we restore back this issue to the file of the AO for fresh consideration. The AO will appraise all the evidence and then decide the issue.