KAYEE PROJECT EQUIPMENTS PVT. LTD.,KOLKATA vs. ITO, WD-8(3), KOLKATA, KOLKATA

The only issue in this appeal is to be decided as to whether the CIT(A) justified in confirming the addition made by the AO u/s. 40(a)(ia) of the Act in the facts and circumstances of the case.

The brief facts of this case that the assessee is a company dealing in transport and transport contractors. The assessee filed its return declaring a total income of Rs.2,56,533/- on M/s. Kayee Project Equipments P.Ltd 1 02/11/2006. The said return was processed u/s. 143(1) on 30- 09-2007. Thereafter, the AO initiated proceedings u/s. 147 of the Act, wherein on the reason that the assessee did not deduct TDS on the payment to an extent of Rs.1,08,24,104/- towards lorry hire charges. On perusal of books of account and ledger accounts of the assessee the AO found that the assessee has paid amount exceeding Rs.50,000/- aggregate payments during the year, on which TDS was not deducted. Thus, the AO disallowing Rs.4,72,027/- u/s. 40(a)(ia) passed his order u/s. 143(3)/147 of the Act on 30-12-2010.

Aggrieved by such order of the CIT-A the assessee preferred an appeal before the Tribunal.

The Ld. AR submits that the AO added such amount taking into consideration the payments were made towards lorry hire charges independently. The Ld. AR further submitted that lorry hire charges are inclusive of reimbursement of expenses, which needs to be excluded while calculating the payment exceeding Rs.50,000/-. It was further submitted that in none of the case the payment to the parties was exceeding more than the limit specified u/s. 194C of the Act. In support of his contentions , he referred to page no. 26 to 44 of the paper book to show that the amounts paid on such memos towards purchase of high speed diesel charges. The Ld. AR also argued that these documents were not filed before the AO during the course of M/s. Kayee Project Equipments P.Ltd 2 assessment proceedings and urged to remand the case to the file of the AO for verification of the same.

On the contrary, the Ld.DR has objected to the same and submitted that the assessee did not produce such documents either before the AO or at least before the CIT-A.

We have heard the rival submissions and perused the material available on record. We find that the CIT-A has categorically observed that the assessee could not produce anything to discharge its responsibility regarding deduction of taxes on payments of lorry hire charges. According to the Ld. AR as submitted before us that such hire charges include the payments made towards high speed diesel charges. Admittedly, the break up as produced by the assessee in the paper book pages 26 to 44 these details were not available before the AO during the assessment proceedings. It is also noticed that the CIT-A has passed his order ex-parte without giving reasonable opportunity of being heard. Taking into consideration the facts and circumstances of the case, submissions of the Ld.AR for the assessee and in the interest of justice, we deem it fit and proper to remand the case to the file of the CIT-A for fresh adjudication. The assessee shall be at liberty to file requisite evidences, if any, to substantiate its claim. The assessee is also directed to co-operate in further appellate proceedings without seeking any further adjournment.