AMBEREEN ISLAM,KOLKATA vs. ACIT, CIR-40, KOLKATA. , KOLKATA

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ITA 1221/KOL/2023Status: DisposedITAT Kolkata05 April 2024AY 2012-13Bench: Shri Rajesh Kumar (Accountant Member), Shri Sonjoy Sarma (Judicial Member)3 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 found that TDS was deducted on payments exceeding Rs. 30,000/- or Rs. 1,00,000/- in aggregate. For payments below these thresholds, no TDS was liable. Therefore, the addition was uncalled for.

What were the facts?

The assessee incurred fabrication charges of Rs. 56,57,506/-. The Assessing Officer (AO) disallowed Rs. 44,99,906/- under Section 40(a)(ia) for non-deduction of TDS. The CIT(A) upheld this addition.

What were the issues?

Whether disallowance under Section 40(a)(ia) is justified when individual payments for fabrication charges were below the TDS threshold limits.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH: KOLKATA

Before: Shri Rajesh Kumar & Shri Sonjoy Sarma]

ORDER / आदेश Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)”] dated 25.08.2023 for the AY 2012-13.

2.

The only issue raised by the assessee in the various grounds of appeal is against the confirmation of addition of Rs. 44,99,906/- as made by AO by making disallowance u/s 40a(ia) of the Act for non-deduction of tax at source on fabrication charges.

Assessment Year: 2012-13 Ambereen Islam 3. Facts in brief are that the assessee filed return of income on 22.03.2013 declaring total income of Rs. 21,56,250/- which was processed u/s 143(1) of the Act. Thereafter the case of the assessee was selected for scrutiny under CASS and statutory notices were duly issued and served upon the assessee. During the course of assessment proceedings the assessee was asked to produce the details of fabrication charges with supporting documents along with details of TDS deduction at source. The assessee submitted before the AO during the year the assessee has deducted TDS at source on the total payments of Rs. 11,57,600/- which are comprised in the fabrication charges. The AO accordingly, after deducting Rs. 11,57,600/- from fabrication charges of Rs. 56,57,506/-, added Rs. 44,99,906/- u/s 40a(ia) for non- deduction of tax.

4.

In the appellate proceedings, the Ld. CIT(A) dismissed the appeal of the assessee by ignoring the submissions of the assessee as extracted in page no. 4 that there was no requirement of tax at source as the expenditure were incurred under the relevant provision of Act.

5.

After hearing the rival contentions and perusing the material on record we find that the assessee is a manufacturer and exporter of leather goods and during the year had paid/incurred fabrication charges of Rs. 56,57,506/- which were paid to (300 parties) labourers /different parties as fabrication charges We note that the assessee has deducted tax at source on the aggregate payments of Rs. 11,57,600/- which were exceeding Rs. 30,000/- and TDS was duly deducted and also deposited in the Govt. Treasury while in respect of remaining of Rs. 44,99,906/- where the individual payments were below Rs. 30,000/- or below 1,00,000/- in aggregate during the year and therefore no TDS was liable to be deducted in the said payments. The counsel for the assessee has produced before us the comprehensive details along with bills and vouchers corroborating his averments. Therefore in our opinion the addition as made by the AO and sustained by the ld CIT(A) is uncalled for. Accordingly we set aside the order of Ld. CIT(A) and direct the AO to delete the addition.

Assessment Year: 2012-13 Ambereen Islam 6. The additional ground raised by the assessee is not pressed at the time of hearing. Therefore the same is dismissed as not pressed.

7.

In the result appeal of the assessee is allowed. Order is pronounced in the open court on 5th April, 2024

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