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TMI Blog2016 (11) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... enuineness regarding the obligation to effect the said payment merely because the payment was effected through a banking channel. In the instant case, we are satisfied that the assessee has produced necessary material before the Commissioner of Income-tax (Appeals), during the course of hearing of the appeal against the order of the Assessing Officer, relating to sub-contracting a part of his work. There is nothing to doubt, in such circumstances, regarding the genuineness of payments effected through banking channels in favour of the two sub-contracting agencies. - Decided in favour of assessee - Tax Case Appeal No. 350 of 2016 - - - Dated:- 7-9-2016 - Nooty Ramamohana Rao And Dr. P. Devadass, JJ. For the Appellant : J. Narayanasam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd hence it was evident that these entries were made in the books of account towards the end of the financial year as convenient/adjustment entries which are normally resorted to for reporting less quantum of profit arising out of business/trading activity undertaken by the assessee. On the above basis, the Assessing Officer has disallowed the amount of little more than ₹ 2.38 crores. 3. The assessee preferred an appeal to the Commissioner of Income-tax (Appeals). During the course of consideration of the appeal, the assessee has presented certain additional evidence in support of his claim that there is nothing to suspect with regard to the payments made to the two sub- contracting agencies by it. Taking into account and consideri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils to the assessee which contained the details of quantity of structural steels of the executed work, for the verification and approval of the assessee. Any such arrangement pre-supposes the existence of a sub-contracting agency as otherwise there was no necessity for the so called sub-contractors to make available the data of the works executed by them, to the assessee. It is not the case of the Revenue that the execution of work by the assessee incidentally involves supervision or coordination of work of the sub-contractors. In the event the sub-contract and execution of work by the so called sub-contractors has no proximity to the work required to be executed by the assessee vis-a-vis its principal, calling for running work progress det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t at the first instance. In the instant case, the obligation that arose on the part of the assessee to make such payment can be easily gathered from the fact that it kept on receiving, from time to time, the running progress schedule of erection work by the sub-contractors. As was already noticed by us, if there is no proximate relationship between the work to be executed by the assessee and the sub-contractors' executed work, which the assessee was required to execute towards its principal, the question of taking note of the progress of running work by the assessee from a third party would not have arisen. So long as the said running work details are not discredited as totally unconnected to the work which the assessee was required to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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