it was noticed by the AO that the assessee has purchased raw material for manufacturing of slurry explosives worth of Rs. 3,15,09,272/-. The assessee was asked to produce the copy of ledger accounts from whom the raw materials have been purchased. The assessee filed the same but the AO noticed that the desired information have not been filed by the assessee, therefore, he issued show cause notice which has been incorporated in the assessment order. The assessee was repeatedly asked by the AO to reconcile the difference noted by him but the ld. AR of the assessee also expressed his inability to furnish the additional details. Accordingly, the difference noted by the AO to the tune of Rs. 27,99,978/- was claimed as bogus purchase and added to the total income of the assessee.the assessee filed written submissions and submitted that the discrepancy in purchases is due to comprising of purchase with doubt and purchase without doubt. The assessee filed also a chart with due element along with ledger copies but these documents were not filed before the AO, therefore, he did not accept the documents filed before him and he dismissed the appeal of the assessee.
After hearing both the sides and perusing the entire material available on record and the documents submitted by the assessee,, which were filed before the AO and CIT(A) with proper documentary supports. Therefore, the documents filed by the assessee are hereby accepted and this issue is also sent back to the file of AO for proper adjudication of the issue. The assessee is directed to cooperate with the AO with necessary documents. This ground of appeal is allowed for statistical purposes.
Sec. 194C & 194H of Income Tax Act, 1961— TDS - The assessee made the payments to Shri Khagesh Patel. It is noticed that the assessee did not deduct TDS as per Section 194H of the Act. He deducted @2% instead of 10%. The assessee contended that the major turnover was achieved from the public sector undertakings and how and why the assessee paid commission to Shri Khagesh Patel for selling of goods. The entire payments were received by the assessee in his bank accounts through cheques/RTGS. Further on perusal of the TDS return filed by the assessee along with details filed by the assessee, it was noticed that in the case of many instances the tax was deducted @1% or 2% as per Section 194C of the Act which is clear from the exact break up of TDS return. He also deducted TDS @2% u/s.194C of the Act. On perusal of the copies of Income Tax Return produced by the assessee of Shri Khagesh Patel in the form of ITR-IV, It was clear that Shri Khagesh Patel offered the amount received from the assessee company as per Section 44AD of the Act. Section 44AD of the Act relates to the civil contract works but not for the commission received. It was noted that there is contradictory in the submissions of the assessee as the assessee has taken plea before the authorities below that it is a commission payment towards selling of goods, whereas as per TDS return as well as copy of ITR-IV of Shri Khagesh Patel, which is in the nature of contract payments. Therefore, ITAT sent back this issue to the file of AO for finding out the correct nature of payments made to Shri Khagesh Patel by the assessee company after providing reasonable opportunity of being heard to the assessee. - MAHANADI METAL AND CHEMICALS PRIVATE LIMITED V/s ITO - [2020] 23 ITCD Online 130 (ITAT-CUTTACK)
it was noticed by the AO that the assessee has purchased raw material for manufacturing of slurry explosives worth of Rs. 3,15,09,272/-. The assessee was asked to produce the copy of ledger accounts from whom the raw materials have been purchased. The assessee filed the same but the AO noticed that the desired information have not been filed by the assessee, therefore, he issued show cause notice which has been incorporated in the assessment order. The assessee was repeatedly asked by the AO to reconcile the difference noted by him but the ld. AR of the assessee also expressed his inability to furnish the additional details. Accordingly, the difference noted by the AO to the tune of Rs. 27,99,978/- was claimed as bogus purchase and added to the total income of the assessee.the assessee filed written submissions and submitted that the discrepancy in purchases is due to comprising of purchase with doubt and purchase without doubt. The assessee filed also a chart with due element along with ledger copies but these documents were not filed before the AO, therefore, he did not accept the documents filed before him and he dismissed the appeal of the assessee.
After hearing both the sides and perusing the entire material available on record and the documents submitted by the assessee,, which were filed before the AO and CIT(A) with proper documentary supports. Therefore, the documents filed by the assessee are hereby accepted and this issue is also sent back to the file of AO for proper adjudication of the issue. The assessee is directed to cooperate with the AO with necessary documents. This ground of appeal is allowed for statistical purposes.
Sec. 194C & 194H of Income Tax Act, 1961— TDS - The assessee made the payments to Shri Khagesh Patel. It is noticed that the assessee did not deduct TDS as per Section 194H of the Act. He deducted @2% instead of 10%. The assessee contended that the major turnover was achieved from the public sector undertakings and how and why the assessee paid commission to Shri Khagesh Patel for selling of goods. The entire payments were received by the assessee in his bank accounts through cheques/RTGS. Further on perusal of the TDS return filed by the assessee along with details filed by the assessee, it was noticed that in the case of many instances the tax was deducted @1% or 2% as per Section 194C of the Act which is clear from the exact break up of TDS return. He also deducted TDS @2% u/s.194C of the Act. On perusal of the copies of Income Tax Return produced by the assessee of Shri Khagesh Patel in the form of ITR-IV, It was clear that Shri Khagesh Patel offered the amount received from the assessee company as per Section 44AD of the Act. Section 44AD of the Act relates to the civil contract works but not for the commission received. It was noted that there is contradictory in the submissions of the assessee as the assessee has taken plea before the authorities below that it is a commission payment towards selling of goods, whereas as per TDS return as well as copy of ITR-IV of Shri Khagesh Patel, which is in the nature of contract payments. Therefore, ITAT sent back this issue to the file of AO for finding out the correct nature of payments made to Shri Khagesh Patel by the assessee company after providing reasonable opportunity of being heard to the assessee. - MAHANADI METAL AND CHEMICALS PRIVATE LIMITED V/s ITO - [2020] 23 ITCD Online 130 (ITAT-CUTTACK)