ITO 30(2)(1), MUMBAI vs. KARAKAL V. VARGHESE, MUMBAI

The only ground agitated by the Revenue, before this Tribunal, is with respect to deleting the addition made under section 40(a)(ia) of the Income Tax Act, 1961 (hereinafter the Act).

During hearing the learned D.R. Shri Rajesh Ojha, merely relied upon the assessment order and the consequent addition made therein. On the other hand, nobody was present for the assessee in spite of issuance of Registered AD Notice on 29.06.2016. The assessee neither presented himself nor moved any adjournment petition. It seems that the assessee has nothing to say. Therefore I have no option but to proceed ex-parte, qua the assessee, and dispose of this appeal on the basis of material available on record.

I have considered the submission of learned A.R. and perused the material available on record. Though various additions were made in the present appeal like section 68 but the Department is in appeal with respect to addition made under section 40(a)(ia) of the Act. This issue has been discussed in para 10 of the assessment order wherein in the Profit & Loss Account the assessee has claimed/debited certain expenses. The assessee was asked to explain the position of tax deducted at source along with details of such expenses. The assessee duly filed the details and also copy of challan showing the tax deducted at source. However, the learned Assessing Officer made certain disallowances. On appeal before the learned CIT(A) the disallowance made by the Assessing Officer was deleted. I find that the assessee has deliberated upon the non-applicability of the TDS provisions with respect to certain parties and has considered the party- wise details of the expenses from para 5.2.1 on wards of the impugned order. The clause 11 of the Finance Bill 2004 along with the provision has been deliberated upon along with the decision in CIT vs. Mother India Refrigeration Industries Pvt. Ltd. (1985) 155 Taxman 711, SS Networks vs. ITO (2015) 53 taxmann.com 534 (Hyd), Padam Sundra Rao vs. State (2002) 255 ITR 147 (SC), ACIT vs. Velliapa Textiles Ltd. (2003) 263 ITR 550, Rajiv Kumar Agarwal vs. Addl. CIT (2014) 45 taxmann.com 555 (Agra) and found that assessee duly deducted tax on labour charges and on some parties the TDS provision is no applicable as the transaction , during the year, was below exemption limit. So far as non-deduction on freight, commission and brokerage is concerned after considering the totality of facts nothing was found against the assessee. Considering the totality of facts and the foregoing decision including the judicial pronouncements I find no infirmity in the conclusion of the learned CIT(A). It is affirmed. Finally the appeal of the Revenue is dismissed.