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Income Tax Appellate Tribunal, “SMC” BENCH: KOLKATA
Before: Shri Mahavir Singh, JM]
For the Appellant: Shri Rip Das, Advocate For the Respondent: Shri Tanuj Niyogi, JCIT, Sr. DR ORDER This appeal by assessee is arising out of order of CIT(A)-XXXIII, Kolkata vide Appeal No. 267/CIT(A)-XXXIII/ITO Wd-52(2)/Kol/08-09 dated 23.08.2013. Assessment was framed by ITO, Ward-52(2), Kolkata u/s. 251/143(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2006-07 vide his order dated 13.09.2013.
The first issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in treating the sundry creditors as unexplained cash credits to the tune of Rs.10,86,681/-.
I have heard rival submissions and gone through facts and circumstances of the case. I find that the AO noticed from the Balance Sheet that the assessee has shown sundry creditors for goods at Rs.14,96,440/- out of which an amount of Rs.10,86,681/- pertains to the sundry creditors with the remark “different cash party”. The assessee claimed to have made purchases from these parties as goods received but the AO was not convinced and he added the sum of Rs.10,86,681/- as unexplained cash credit u/s. 68 of the Act. The CIT(A) exactly on same reasoning confirmed the addition.
I find from the facts of the case that the assessee has filed complete details in its paper book at page 19 wherein sundry creditors to whom payments were made in cash are enclosed. These parties were outstanding during the year and no payment was made and this was shown as sundry creditors amounting to Rs.10,86,681/- and assessee has filed complete name and address in the list. The details were made available before the 2 M/s. Creative Foundation AY 2006-07 AO also. I find that these sundry creditors pertained to small suppliers who supply material to the assessee being local vendors and the supply is not accompanied by any cash memo or bill but it is a settled position that there will be outstanding at the end of the year. In the immediate next year these payments are made, which was contended by assessee’s counsel now before me and he stated that in the next year the payments were made. I find no infirmity in the contention of the assessee and accordingly this addition is deleted. This ground of appeal
of assessee is allowed.
5. The next issue in this appeal of assessee is against the order of CIT(A) confirming the disallowance of contractual payments made without deduction of TDS u/s. 194C of the Act thereby invoking the provisions of section 40(a)(ia) of the Act amounting to Rs.2,45,907/-.
6. I have heard rival submissions and gone through facts and circumstances of the case. I find that the assessee has made payments in respect to two contractors namely, Shri Bablu Maity amounting to Rs.1,06,000/- and Mr. Anabul Seikh amounting to Rs.1,39,907/- thereby the total of Rs.2,45,907/-. The assessee is liable to deduct TDS u/s. 194C of the act on these payments but he failed to do so. The AO by invoking the provisions of section 40(a)(ia) of the Act made disallowance and CIT(A) confirmed the same. Now before me, Ld. Counsel for the assessee only requested for setting aside this issue to the file of AO in view of amendment in section 40(a)(ia) of the Act by bringing the second proviso by Finance Act, 2012 is held to be retrospective by Hon’ble Delhi High Court in the case of CIT Vs. Ansal Land Mark Township (P) Ltd., ITA Nos. 160 & 161/2015 dated 26.08.2015, wherein it has been held as under: “No s. 40(a)(ia) disallowance for failure to deduct TDS on payment if payee has offered amount to tax. Second Proviso to s. 40(a)(ia) inserted by Finance Act 2013 w.e.f. 1.4.2013 should be treated as curative and to have retrospective effect from 1.4.2005. ITAT praised for "thorough analysis" of the provision”
7. In view of the above, the issue needs to be set aside to the file of AO. On query from the Bench, Ld. Sr. DR has not objected to the proposal. In view of the above facts and circumstances, we are of the considered view that let the AO examine the details of recipients of payments, which are to be filed by assessee and in case these receipts are included in their respective return of income and paid taxes thereon, the AO will delete the disallowance made u/s. 40(a)(ia) of the Act in view of the decision in the case of 3 M/s. Creative Foundation AY 2006-07 Ansal Land Mark township (P) Ltd., supra. This issue of assessee’s appeal is allowed for statistical purposes. 8. In the result, appeal of assessee is allowed partly for statistical purposes. 9. Order is pronounced in the open court. Sd/- (Mahavir Singh) Judicial Member
Dated : 8th December, 2015 Jd.(Sr.P.S.) Copy of the order forwarded to: