Raghav Agritech Vs ITO (ITAT Nagpur)
The Income Tax Appellate Tribunal (ITAT), Nagpur Bench, delivered its decision in an appeal filed by the assessee, Raghav Agritech, challenging the order dated 23 January 2024 of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for the assessment year 2019–20. The appeal was heard ex parte as no one appeared on behalf of the assessee during the proceedings, nor was any adjournment request filed. The Tribunal, therefore, proceeded to decide the case based on the material available on record and the submissions of the Departmental Representative.
The assessee raised multiple grounds of appeal, primarily contesting the addition of ₹61,95,000 made under Section 143(1)(a) of the Income Tax Act, 1961. The Assessing Officer had made this addition on the ground that the assessee failed to deduct tax at source (TDS) on a payment of ₹2,06,50,000 made to a building contractor. Consequently, 30% of the amount was disallowed under Section 40(a)(ia) read with Section 194C. The assessee argued that the payment to the contractor was capital in nature, as it was related to building construction, and had not been claimed as revenue expenditure in the Profit and Loss Account. Therefore, the provisions of Section 40(a)(ia), which apply to expenses claimed as deductions, were not applicable. The assessee had also voluntarily disallowed ₹3,09,750 being 30% of depreciation claimed on the capitalized asset.
