M/S KASHMIR CEMENT,UDHAMPUR vs. INCOME TAX OFFICER, WARD-2(4), UDHAMPUR

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ITA 584/ASR/2018Status: DisposedITAT Amritsar13 October 2022AY 2014-155 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal remitted the issue of TDS on freight payments back to the CIT(A) for fresh adjudication. It also deleted disallowances for other expenses, stating the CIT(A) failed to provide evidence to disprove the assessee's claims.

What were the facts?

The assessee challenged disallowances of various expenses including loading/unloading, repair, staff welfare, travelling, and vehicle diesel. The primary dispute involved freight payments made without deducting TDS, and other expenses claimed without sufficient bills/vouchers.

What were the issues?

Whether TDS was required on freight payments, and whether disallowances of expenses lacking bills/vouchers were justified without contrary evidence.

Which sections of the Income-tax Act were involved?

Section 194C,Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR

Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE

For Respondent: Ms. Amanpreet Kaur, Sr. DR
Hearing: 28.09.2022Pronounced: 13.10.2022

This appeal has been filed by the assessee against the order dated 16.08.2018 passed by the Ld. Commissioner of Income Tax (Appeals), Jammu, in respect of Assessment Year 2014-15, arising out of the Assessment Order dated 08.12.2016 of the Income Tax Officer, Ward-2(4), Udhampur, challenging disallowance of expenses under the head loading

2 Kashmir Cements v. ITO and unloading expenses, repair and maintenance expenses, Staff Welfare expenses, Travelling expenses, and Vehicle Diesel and working allowances paid to partners.

2.

None appeared for the assessee. Finding no bonafide returns the adjournment application filed is rejected. Considering the facts on record and after hearing the ld. Addl. CIT-DR, it is decided to hear the appeal on merits in the interest of the justice. The issue of selection of the case under scrutiny as challenged by the assessee is not arising out of the order of the impugned order. Therefore, this ground is dismissed as not maintainable.

3.

After considering the contentions raised by the counsel for the assessee in grounds of appeal and facts discussed by the ld. CIT(A) that since the freight paid to M/s Punjab Kashmir Roadlines a sum aggregating to Rs.1,49,470/- which exceeds Rs.75,000/-. Thus, it was hit by section 194C of the Act, and therefore, the assessee was liable to deduct tax at source while making payment in respect of M/s Punjab Kashmir Roadlines.

The ld. DR contended that the ld. CIT(A) was justified in confirming the addition of Rs.1,49,470/- made by the AO on account of disallowances of expenses of freight charges by invoking provisions of section 40(a)(ia). She further argued that other disallowances have been confirmed by the ld.

3 Kashmir Cements v. ITO CIT(A) for want of complete details of either production of proper bills/vouchers or the persons/labourers in respect of which the expenditure was claimed.

4.

Having heard the ld. Addl. CIT DR, perusal of the record and the impugned order, it is noted that the assessee has paid freight to M/s Punjab Kashmir Roadlines a sum of Rs.1,49,470/- without deducting TDS as required under the proviso to section 194C of the Act. The ld. CIT(A) has concurred with the observation of the ld. Assessing Officer without taking a rebuttal of the assessee on the issue of regarding details of TDS deduction on the freight payment if any, accordingly, the issue of TDS is remitted back to the file of the ld. CIT(A) to adjudicate afresh after calling for the details from the assessee by way of granting sufficient opportunity of being heard. The assessee is directed to cooperate in the fresh proceedings before the ld. CIT(A) with the direction to provide the information regarding details of TDS if any deducted as per the provisions of law.

5.

As regards the next issue which pertains to disallowance of expenses for want of bills/vouchers in respect of payment, under the heads staff welfare, miscellaneous expenses, travelling expenses, and Vehicle Diesel

4 Kashmir Cements v. ITO expenses for want of proper bills/vouchers besides expenses claimed under the head loading and unloading expenses, repair and maintenance expenses, Staff Welfare expenses, Travelling expenses, and Vehicle Diesel and working allowances. The ld. CIT(A) has not brought on record any evidences to disprove the disputed expenses claimed by the appellant assessee. He has merely mentioned in the order that bills/vouchers are not produced in respect of person or labourers. However, to disprove the claim of assessee, he is required to bring on record, the supporting corroborative documentary evidences. Further, the CIT(A) has not discussed any circumstantial evidences to substantiate that the expenses claimed by the appellant assessee were bogus expenses or otherwise not incurred for the business purposes. Taking into consideration, the totality of the facts and the circumstances of the case, such disallowances of expenses confirmed by the ld. CIT(A) on the basis of presumption and assumption are not justified. In our view, the additions confirmed on account of such miscellaneous expenses in respect of claims of unloading expenses, repair and maintenance expenses, Staff Welfare expenses, Travelling expenses, and Vehicle Diesel and working allowances, are not justified. Accordingly, the same are deleted.

5 Kashmir Cements v. ITO 6. In the result, the appeal filed by the assessee is partly allowed.

Order pronounced in the open court on 13.10.2022 Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr/PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T

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