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TMI Blog2016 (2) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... two of them filed copy of bank books in Development Credit Bank, Kurla and Bank of India. They have also confirmed that the lump sum amounts received from the assessee are distributed among other works as wages. Therefore it cannot be said that the assessee has not proved incurring of expenditure. Taking all these facts into consideration, we are of the view that the lower authorities are not justified in coming to the conclusion that the expenses are not genuine. In the circumstances, we delete the adhoc disallowance made by the AO at 20% of labour charges. - Decided partly in favour of assessee - ITA No. 1115/Mum/2014, ITA No. 948/Mum/2014 - - - Dated:- 24-2-2016 - Shri C. N. Prasad, Judicial Member And Shri Rajesh Kumar, Accountant Member For the Petitioner : Shri Vipul J. Shah For the Respondent : Shri R.A. Dhyani ORDER Per C. N. Prasad, JM These are cross appeals by the assessee and the Revenue against the very same order of the Ld. CIT(A)-30, Mumbai dated 04.12.2013 pertaining to assessment year 2006-07. Both these appeals are heard together and they are disposed of by this common order for the sake of convenience. ITA No. 948/M/2014 Revenue s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance to the extent of @20% he submits that there is no justification in sustaining such disallowance without appreciating the fact that during the course of remand proceedings the assessee has produced the details of the parties to whom the payments have beenmade and they submitted their PAN card, Driving licence, Adhar Card and confirmation letters accepting the amounts received towards labour charges. 6. The Ld. Departmental Representative supports the orders of the AO. 7. Heard both sides, perused the orders of the lower authorities. The AO while completing the assessment noticed that assessee has not deducted TDS on labour charges and therefore by invoking provisions of Sec. 40(a)(ia) of the Act he disallowed labour charges to the extent of ₹ 81,88,864/-. In the alternative, the AO was of the view that the entire expenses cannot be allowed on the ground that the assessee failed to submit the requisite details and supporting evidences to show that the expenditure was incurred. The Ld. CIT(A) called for the remand report from the AO and after obtaining the remand report and the comments from the assessee on remand report held that assessee is carrying out Embroidery a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, further enquiries conducted by the Ld. CIT(A), we do not find any infirmity in the order passed by the Ld. CIT(A) in deleting the disallowance made u/s. 40(a)(ia) of the Act as the payment made by the assessee to karigars is not contractual and therefore, the provisions of Sec. 194C have no application. The Ld. CIT(A), however, sustained the disallowance made by the AO at 20% of the labour charges holding that assessee has not been able to establish the genuineness of the entire payment. 9. The assessee is in appeal before us challenging the order of the Ld. CIT(A) in passing ex-parte order by the Ld. CIT(A) and also sustaining the adhoc disallowance being 20% of total wages paid to workers. The Ld. Counsel for the assessee at the time of hearing submits that ground No. 1 of the grounds of appeal regarding sufficient opportunity is not pressed. Therefore the same is dismissed as not pressed. 10. In so far as the adhoc disallowance sustained by the Ld. CIT(A), the Ld. Counsel submits that the CIT(A) is not justified in confirming the disallowance without appreciating the fact that in the course of assessment proceedings, the assessee had produced the parties and they had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have actually received the payments for distribution amongst the workers, their pass books were called for examination. Copy of the books of Shaikh Alam. Mohammed for the period 1.1.2006 to 31.12. 2009 maintained with Development Credit Bank, Kurla and statement of account from 21.01.2005 to 02.06.2005 of Shri Shaikh Tohir AIi maintained with Bank of India have been furnished. (copy of these documents are enclosed for your kind perusal. No bank account was produced in the case of Syed Nurul Islam. The bank accounts produced were also partial. They have stated that the deposits reflected in the said accounts are the receipts from the assessee being labour charges. These payments were received by them in lump sum which were to distribute amongst the workers for the work done by them. They have further stated that they have already submitted the necessary documents before the CIT(A) i.e. PAN Car/Driving licence and copy of ledger account and confirmation letters, copies of which were also shown to this office. The confirmation letters are found to be in a stereotypic manner. When asked about filing of individual return they have stated that they did not file any return. They hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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