SHRI MURTAZBHAI H. KHANUSIYUA,HIMATNAGAR vs. THE JT. CIT, S.K.RANGE, HIMATNAGAR

PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER :

This is an appeal filed by the assessee against the order of the Commissioner of Income Tax(Appeals)-VIII, Ahmedabad, dated 11/03/2014, in the matter of assessment Under Section(u/s)143(3) of the Income tax Act, 1961 (‘the Act hereinafter’), for the Assessment Year 2009-10, on the following Grounds:- Learned CIT(A) has erred in making an addition of Rs.12,77,185/-u/s. 40(a)(ia) of the Income Tax Act. It is submitted that facts and circumstances of the case, looking to the nature and amount of the payment and the recipient, the appellant has to submit that provisions of Section 40(a)(ia) are just not applicable. In view of this, the addition of Rs.12,77,185/- be deleted both on facts as well as law. ii. With prejudice to the above, Learned Commissioner of Income Tax (appeals) has erred in incorrectly and illegally holding that assessee was liable to deduct TDS on the ground that he was Contractor. It is submitted that on the facts and circumstances of the case, it is absolutely clear that appellant is a sub-contractor and is not required to deduct TDS under Section 194C of the Income Tax Act as held by Hon'ble Income Tax Appellate Tribunal in his own case. In view of this, no disallowance can be made u/s. 40(a)(ia). It is submitted that disallowance made by the Assessing Officer and confirmed by Hon'ble CIT(A) of Rs.12,77,185/- be deleted.

The assessee is engaged in the business of Civil construction (Road work) and shown total contract receipts of Rs.12,20,90,405/- and shown gross profit of Rs.97,79,097/- and net profit of Rs.22,38,727/- after depreciation of Rs.21,82,967/-. The net profit shown by the assessee at Rs.44,21,694/- subject to depreciation works out at the rate of 3.62%. In the preceding assessment year receipts of the assessee were of Rs.12,22,56,992/- and its net profit subject to depreciation was of Rs.38,86,473/- i.e. 3.18%. Regarding the net profit the assessee Shri Murtazbhai H. Khanusiyua vs. JCIT contended that assessments in his case for the A.Y. 2007-08 and 2008-09 were completed u/s.143(3) and nominal disallowance of Rs.1 lakh and Rs.75,000/- respectively were made.

Assessee has filed a copy of letter issued by Airport Authority of India showing allotment of “Contract” to M/s. G.H. Vijapura & Co.

Assessee has also filed a Sub Contract Agreement between M/s. G.H. Vijapura & Co. and M/s. M.H. Khansuiya (Proprietary firm of the appellant).

Assessee has also filed Copy of Audited accounts of the assessee for the year under consideration.

Assessee has filed a decision of Coordinate Bench in his own case in ITA No.1856/Ahd/2009 for Assessment Year 2006-07, in this case, assessee has performed as a sub contractor.

Priti Yadav, Sr.PS आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant

उप/सहायक पंजीकार (Dy./Asstt.