COMMISSIONER OF INCOME TAX Vs. KRISHNA KUMAR GOEL

JUDGEMENT

(1.) THE present appeal has been filed by the Department under Section 260A of the Income -Tax Act, 1961 against the judgment and order dated 22.05.2009, passed by the Income Tax Appellate Tribunal, Lucknow in ITA No. 79/Luck/2009, for the assessment year mentioned above. The brief facts of the case are that the assessee is a contractor engaged in the civil construction and electrical installation on the basis of turnkey project system involving specialized work. During the assessment year under consideration, the assessee has undertaken work of scientific convention centre at Lucknow. During scrutiny, the Assessing Officer observed that a sum of Rs. 3,98,020/ -, has been shown as liability of TDS in the balance -sheet. The TDS was deducted against the payment made to the sub -contractor for various work undertaken from them which inter alia includes the supply of material as well as other work executed by the sub -contractor. The Assessing Officer has also opined in his order that TDS was not paid within prescribed time limit. Finally, the Assessing Officer has made the addition for three component, namely, Rs. 2,01,09,049/ -; + Rs. 15,15,376/ -; + Rs. 97,69,921/ - under Section 40(a)(ia) of the Income Tax Act. In the first appeal, the CIT(A) has given partial relief. However, the Tribunal has deleted the said addition. Being aggrieved, the Department has filed the present appeal on the proposed substantial question of law, which are as under: - -

(2.) WITH this background, Sri D.D. Chopra, learned counsel for the Department has justified the order passed by the Assessing Officer. He submits that the tax was deducted at source partly to the sum provided under the head "interest" on unsecured loans and also to the payments made to various persons with whom arrangements had been made for procurement of material. He submits that the contract was awarded to assessee by the Project Manager, Construction and Design Services (C and DS), U.P. Jal Nigam, Lucknow.

(3.) LEARNED counsel also submits that a sum aggregate to Rs. 2,01,09,049/ - had been made for purchase of material, which was accounted on different dates prior to March, 2005. He read out Section 40(a)(ia) of the Income Tax Act. On reproduction, it reads as under: - -