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TMI Blog2016 (6) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... d various other related jobs was to be carried out for a number of clients for which there were receipts of over Rs. 46 lakhs. 3. For that the Ld. CIT(A) erred in confirming the disallowance of Rs. 12,57,040/- when the payment made for the services taken was quit4 reasonable considering the nature of work. 4. For that the Ld. CIT(A) erred in confirming the disallowance of Rs. 9,71,000/- paid to 20 persons when the details of parties including their assessment particulars were field, all of them disclosed the receipts in their returns and therefore genuinity of the claim and identity of the parties cannot be disputed and further the services rendered were proved with reference to the nature of work done by them. 5. For that the Ld. CIT(A) erred in disallowing the remaining sum of Rs. 2,86,040/- (Rs.12,57,040 - 9,71,000/-) without any finding that the said payment was not genuine. 6. For that the Ld. CIT(A) erred in disallowing the payment of hiring charges to 7 parties amounting to Rs. 2,33,652/- without any adverse finding when 7 parties appeared before the Ld. CIT(A) and accepted having receive the hiring charges. 7. For that the Ld. CIT(A) erred in confirming the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of assessee. 3. Aggrieved, assessee preferred an appeal before Ld. CIT(A) whereas assessee submitted that the provision of Sec. 194J of the Act applies for the expense of professional services and technical services. Therefore the provisions to Sec. 194J are attracted only in case where the services are rendered by a person of professionally educated in a particular discipline. In the instant case, payments are made to ladies and gentlemen who are not much educated and have been hired to conduct clerical workings like counting, recording etc. of stock, counting of fixed assets, labelling etc. Such clerical work requires no specific professional skill. Besides above, assessee submitted that the people were outsourced only for limited purpose of physical verification activity of the client's business and these people do not work for a long time. They were hired for a span of 2/3 months. Some people were hired assignment-wise and they leave the firm once the assignment is complete. Therefore, it is not possible to collect the required information about the people to whom the charges were paid. It is also to note that hired people were non-technical but all of them were working un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs like counting, recording etc of stock, counting of fixed assets, labeling etc. Such, clerical work requires no specific professional skill." However, Ld. CIT(A) disregarded the plea taken by assessee that payments were made to clerical assistance and many of them worked as student of CA / CS / ICWA which is clearly of the nature of fees of professional services and therefore attracts the provision of Sec.194J of the Act. 3.1 Ld. CIT(A) also doubted the genuineness of the expenditure claimed by assessee on the ground that the alleged persons to whom payments were made did not appear in response to summon issued to them. In many occasion, summons issued came back as un-served. Ld. CIT(A) also rejected the documents submitted by the assessee at the time of hearing on the ground that documents submitted are not reliable and he confirmed the action of AO. Being aggrieved by this order of Ld. CIT(A) assessee came in second appeal before us. 4. Before us Ld. AR submitted that payments were not made to people who are technically qualified as required u/s 44AA of the Act. The payments to the persons are covered u/s. 194C of the Act and in each case the payment is below Rs. 50,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44AA or of this section. Notified professions under section 44AA are in terms Notification No. S.O. 17(E), dated 12th January, 1977 issued under section 44AA prescribed the following professions : (a) The profession of authorised representative "Authorised representative" means a person, who represents any other person, on payment of any fee or remuneration, before any tribunal or authority constituted or appointed by or under any law for the time being in force, but does not include an employee of the person so represented or a person carrying on legal profession or a person carrying on the profession of accountancy. (b) The profession of film artist: "Film artist" means any person engaged in his professional capacity in the production of a cinematograph film, whether produced by him or by any other persons as (i) an actor; (ii) a cameraman; (iii) a director, including an assistant director; (iv) a music director, including an assistant music director; (v) an art director, including an assistant art director; (vi) a dance director, including an assistant dance director; (vii) an editor; (viii) a singer; (ix) a lyricist; (x) a story writer; (xi) a screen play writer; (xii) a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that Ld. CIT(A) erred in restricting the disallowance out of office expense incurred by assessee to the extent of 10% of Rs. 8,39,858/-. During the year assessee has claimed reimbursement expense for an amount of Rs. 8,39,858/- by crediting in its profit and loss account. This reimbursement expense was claimed by assessee from its clients on actual basis of the expenditure incurred. Against the receipt of such reimbursement expenses and assessee has claimed expenses of Rs. 8,39,858/- exactly same amount by debiting the profit and loss a/c. On verification of expense claimed by assessee, the AO found that in some cases self-made vouchers were available and in some cases there was no voucher in support of expenses claimed by assessee. Accordingly, AO opined that the possibility of personal expense cannot be ruled out therefore 20% of Rs. 8,39,858/- which comes to Rs. 1,67,972/- was disallowed and added back to the total income of assessee. 7. Aggrieved, assessee preferred an appeal before Ld. CIT(A) who has reduced the disallowance made by AO from 20% to 10%. Being aggrieved by this order of Ld. CIT(A) assessee came in second appeal before us. 8. We have heard rival contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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