CHANDAN KUMAR SAHOO,CUTTACK vs. ITO, PARADEEP

This is an appeal filed by the assessee against the order of CIT(A)-

Cuttack, dated 17.10.2014, for the assessment year 2009-2010.

The assessee has filed modified grounds of appeal on 17th January, 2.

2017. Ld Departmental Representative had no objection to accepting and

adjudicating the same. Hence, the modified grounds of appeal were

accepted and the parties were allowed to make their submissions thereon.

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not require separate adjudication by me.

the CIT(A) erred in confirming the addition of Rs.4,95,400/- u/s.68 of the

Act.

authorities and materials available on record. The Assessing Officer

observed that the assessee has sown credit balance in the current account

at Rs.4,95,400/- for the first time. This balance has been transferred to the

capital account of the assessee. The Assessing Officer required the assessee

to explain the source of such credit balance but the assessee felled to

explain the same satisfactorily. Therefore, the Assessing Officer added the

same under section 68 of the Act.

that it will be observed from pages 5 and 6 of the paper book, wherein, the

ledger account of proprietary business of the assessee Sidhivinayak Tyres

and Tarini Engineering is placed. Ld A.R. of the assessee submitted that at

pages 30 to 37 of the paper book, copies of balance sheet of the proprietary

business Sri Baladevjew Fuel Centre , Sidhi Vinayak Tyres and Tarini

Engineering are filed. From these copies, it can be seen that the assessee

was having credit balance in the current account as on 31.3.2009 of

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Rs.14,86,248/- in Sri Baladevjew Fuel Centre, overdrawn balance in the

current account in Sidhi Vinayak Tyres of Rs.7,77,126/- and overdrawn

balance in the current account in Tarini Engineering 2,13,722/-. He

submitted that sum total of the balances of current account in the three

firms works out to Rs.4,95,400/-, which has been added in the capital

account of the assessee. A chart of three proprietorship business as on

31.3.2009 is filed at page 1 of the paper book, which explains the capital

account as on 31.3.2009 of the Proprietor Shri Chandan KIumar Sahu.

Hence, he submitted that the addition made and sustained of Rs.4,95,400/-

was not justified.

submission of ld Authorised Representative of the assessee.

Act on account of unexplained credit in the capital account. The explanation

of the assessee is that the credit balance in the current account of the

assessee in his three proprietary business of Rs.14,86,248/- in Sri

Baladevjew Fuel Centre, overdrawn balance in the current account in Sidhi

Vinayak Tyres of Rs.7,77,126/- and overdrawn balance in the current

account in Tarini Engineering 2,13,722/- respectively and the net results of

which works out to Rs.4,95,400/-. Which has been added in the capital

account of the assessee. The explanation of the assessee has not been

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controverted by the ld D.R. Therefore, I am of the considered opinion that

aggregate amount of Rs.4,95,400/- has been duly explained by the

assessee by filing the relevant copies of profit and loss account of three

proprietary business of the assessee, which remained uncontroverted by

the revenue. Hence, the addition made cannot be sustained in law. I,

therefore, set aside the orders of lower authorities and delete the addition

of Rs.4,95,400/- and allow this ground of appeal of the assessee.

the CIT(A) erred in sustaining the addition of Rs.6,65,000/- u/s.68 of the

Act.

authorities and materials available on record. The brief facts of the case

are that the Assessing Officer found that a sum of Rs.6,65,000/- has been

credited to the account of Tarini Engineering on different dates. The

Assessing Officer asked the assessee to explain the credits with necessary

evidence. The assessee replied that the amount has been withdrawn from

another partnership firm namely, M/s.Jagannath Engineering Works. The

Assessing Officer observed that the assessee did not show any income from

such firm and also did not produce any evidence of withdrawal of amount

from such firm. Hence, he added the same to the income of the assessee.

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from pages 5 -6 of paper book, wherein, ledger account of the firm Sidhi

Vinayak Tyres and Tarini Engineering are filed. He pointed out that sum of

Rs.2 lakhs on 24.12.2008, Rs.1,00,000/- on 16.2.2009 and Rs.1,00,000/-

on 2.3.2009 aggregating to Rs.4 lakhs was paid by Sishivinayak Tyres to

the firm Tarini Engineering in cash. He further pointed out that it will be

observed from bank statement of Sri Jagannth Engineering Works at State

Bank of India, Sikharpur that on 16.8.2009 a sum of Rs.2,65,000/- was

paid by Jagannath Engineering Works to the assessee Shri Chandan Kumar

Sahu and on the very same date i.e. 16.8.2008, the same was credited in

the bank account of the assessee. It was his submission that the total

credit of Rs.6,65,000/- is explained and, therefore, the CIT(A) was not

justified in confirming the addition of Rs.6,65,000/- u/s.68 of the Act.

Representative of the assessee.

by the Assessing Officer on the ground that the assessee explained that

Rs.2,65,000/- was received from Jagnath Engineering Works but the

assessee did not show any income from such firm and also did not produce

any evidence of withdrawal of amount from such firm.

Jagannath Engineering Works and has demonstrated that a sum of

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Rs.2,65,000/- was credited to the account of the assessee by cheque on

16.8.2008 drawn on State Bank of India, Sikharpur Branch and it was

credited on the same date i.e. 16.8.2008. Further, the assessee has shown

by filing ledger account of two firms i.e. Sidhivinayak Tyres and Tarini

Engineering works that a sum of Rs.4 lakhs was paid by Sidhivinayak Tyres

during the period from 24.12.2008 to 2.3.2009 to the assessee in cash,

which was credited by Tarini Engineering in its books of account. Thus, the

credit of Rs.6,65,000/- was duly explained by the assessee. The

explanation of the assessee has not been controverted by ld Departmental

Representative. Hence, I am of the considered opinion that the ld CIT(A)

was not justified in confirming the addition of Rs.6,65,000/- u/s.68 of the

Act. I, therefore, set aside the orders of lower authorities and delete the

addition of Rs.6,65,000/- made u/s.68 of the Act and allow this ground of

appeal of the assessee.

the CIT(A) erred in confirming the addition of Rs.5,64,521/- under the head

“labour charges” and “job works” u/s. 40(a)(ia) of the Act.

authorities and materials available on record. In the instant case, the

Assessing Officer found that the assessee has debited Rs.5,64,521/- under

the head “labour charges” and “job works. The Assessing Officer observed

that it was contract payment and no TDS was deducted u/s.194C of the Act

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and, therefore, by invoking the provisions of section 40(a)(ia) of the Act,

he disallowed Rs.5,64,521/- and added the same to the income of the

assessee.

that it was explained before the Assessing Officer as well as the CIT(A) that

entire amount was paid during the year itself and that provisions of section

194C of the Act were not applicable as the payment during the year did not

exceed Rs.50,000/-. It was also argued that no amount was outstanding

and payable at the end of the year. Therefore, in view of the decision of

Hon’ble Allahabad High Court in the case CIT vs. Victor Shipping Services

(P) Ltd., (2013) 357 ITR 642(All), wherein, it has been held that for

disallowing expenses from business and profession on the ground that tax

has not been deducted at source, the amount should be payable and not it

has been paid by the end of the year, ), no disallowance u/s.40(a)(ia) was

warranted in the case of the assessee. He further submitted that the SLP

filed against the judgment of Hon’ble Allahabad High Court has been

dismissed by the Hon’ble Supreme Court vide judgment dated 2.7.2014 in

CC No.(s) 8068/2014. He submitted that where there are contrary

decisions of Hon’ble High Courts on an issue and none of which is Hon’ble

Jurisdictional High court, then the decision in favour of the assessee should

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be followed in view of the decision of Hon’ble Supreme Court in the case of

CIT vs.Vegetable Products Ltd., 88 ITR 192 (SC).

amounting outstanding and payable at the end of the year. Therefore, I

set aside the orders of lower authorities and respectfully following the

decision of the Hon’ble Allahabad High Court in the case of CIT vs. Victor

Shipping Services (P) Ltd(supra) delete the disallowance of Rs.5,64,521/-

made u/s.40(a)(ia) of the Act and allow this ground of appeal of the

assessee.

SR.PRIVATE SECRETARY ITAT, Cuttack