|The Tax Publishers2021 TaxPub(DT) 0290 (Del-Trib)
INCOME TAX ACT, 1961
Where CIT(A) observed that since there was no change in the facts and circumstances of the case nor had AO brought anything on record to prove that the agreement fell within the expanded scope of works contract envisaged under section 194C, Explanation (iv) thereto with effect from 1-10-2009, therefore, ground of appeal raised by assessee was dismissed.
Business disallowance under section 40(a)(ia) - Non-deduction of TDS under section 194C - Contractual receipts of goods treated as regular sale by suppliers -
Assessee was engaged in business of running a restaurants which sell primarily Chinese food, beverages and liquor and that the company outsourced the Chinese kitchen to another entity called an enterprises. For the assessment year, assessment was completed under section 143(3) by making addition on account of section 40(a)(ia) holding that there was a contract between an enterprises and assessee for supply of Chinese food during the year under consideration and therefore, such payment was contractual payment falling within the definition of contractor under section 194C. Since assessee did not effect TDS, such an expense was liable to be disallowed under section 40(a)(ia). Held: CIT(A) found that a similar question had arisen in the case of the assessee in the previous assessment years and after examining the contract with the said enterprises, the bills issue and the VAT returns of assessee and a seller of the goods in light of the amended section 194C, his predecessor reached a conclusion that transaction between assessee and supplier was that of sale and purchase and the same does not fall within the ambit of section 194C. CIT(A), therefore, observed that since there was no change in the facts and circumstances of the case nor had AO brought anything on record to prove that agreement fell within the expanded scope of works contract envisaged under section 194C, Explanation (iv) thereto with effect from 1-10-2009, there was no scope to deviate from the view taken by his predecessors for assessment years 2006-07 to 2012-13. CIT(A) was justified in finding it difficult to take a different view from the consistent one taken for the earlier assessment years.
Relied:Asstt. CIT v. K.S. Hotel Pvt. Ltd. [ITA No. 6858/Del/2015, dt. 6-8-2019], Dy. CIT v. K.S. Hotels (P) Ltd. 2018 TaxPub(DT) 7313 (Del-Trib), Dy. CIT v. K.S. Hotels Pvt. Ltd. [ITA No.:-278/Del/2013, dt. 17-10-2018] and Tripat Kaur v. Asstt. CIT [I.T.A. No. 3244/Del/2012, dt. 7-9-2012].
FAVOUR : Against the assessee.
A.Y. : 2013-14
INCOME TAX ACT, 1961
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