TMI Blog2017 (1) TMI 1547X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is violation of section 194C(7) and disallowance under section 40(a)(ia) does not arise - Decided in favour of assessee. Addition on account of GIFT treating the same as bogus expenses - Held that:- Assessee made piecemeal payments for purchase of Diary, Calendar, Pen from “Uma Chabighar' and shirt and trouser pieces from “Shamsundar Bastralaya" and treated said amounts as "credits" and in our opinion the Assessee correctly done so as the Assessee did not have received the items from the said two parties - finding of the AO was that the payments should not have been treated as credits and should have been offset on receipt of items ordered - Assessee had shown the expenses on gifts in the books of accounts by directly debiting the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the instant case, the Ld. Commissioner of Income Tax (Appeals)-Burdwan acted unlawfully in upholding the impugned addition in the sum of Rs, 4.10,090/- resorted to by the Ld. Income Tax Officer. Ward 2(4), Burdwan within the province of s, 40(a)(ia) of the Income Tax Act. 1961 by misreading the facts and circumstances of the instant case and such specious finding reached on that behalf in violation of the statutory prescription is wholly illegal,illegitimate and infirm in law. 3. FOR THAT the W. Commissioner of Income Tax (Appeals)-Burdwan acted unlawfully in upholding the purported addition in an amount of ₹ 1.24.500/- out of expenses under the head gifts made by the Ld. Income Tax Officer. Ward 2(4). Burdwan without consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,00,122/-, (ii) Obhinoy Maji of ₹ 68,530/-, (iii) Pradip Kumar Keshari of ₹ 70,375/-, (iv) Biswajit Bhattacharyya of ₹ 1,08,670/- (v) Somenath Banerjee of ₹ 62,393/- ₹ 4,10,090/- 6. The Assessee explained that the payees had issued their Permanent Account Numbers in compliance to s. 194C(6) of Act and no tax could be deducted on the entire sum of ₹ 4,10,090/- paid on that account. The AO was not satisfied with such explanation and added the said sum of ₹ 4,10,090/- to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced reliance on the order 09-09-2016 of Coordinate Bench of this Tribunal in ITA No. 1420/Kol/2015 in the case of Soma Rani Ghosh Vs. DCIT. On the other hand, the Ld.DR relied on the order of AO. 8. Heard rival submissions and perused the material available on record. It is an admitted fact that since all the payees submitted their Permanent Account Numbers in the assessment proceedings. The provision contemplated in Sec 194C(6) permits no deduction of TDS shall be made u/s. 194C(1) if the payee furnishes PAN to the payer. We find that the requirement of Section 194C(6) of the Act submission of Permanent Account Number which enable the payer from no deduction of TDS. The finding of the AO was that the Permanent Account Numbers furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no s -3 and 4 are related to an addition of ₹ 1,24,500/- made on account of GIFT treating the same as bogus expenses. 11. The AO found that the Assessee debited an amount of ₹ 1,24,500/- and the AO asked the Assessee to explain the nexus between the gift of ₹ 1,24,500/- in his accounts vis-a-vis his commission earning activities. In support of the same, the Assessee produced evidences of advance payments in respect of diary, calendar and pen etc.. from Uma Chabighar of ₹ 85,500/- and shirt and trouser from Shamsundar Bastralaya of ₹ 39,000/-. The AO on perusal of the books revealed that the credit entries were made under the head Gift to customer and found the submissions of the assessee are self contradic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghtly and is fully allowable u/s. 37(1) of the Act. 13. Heard rival submissions and perused the material evidence on record. In course of assessment proceedings the AO disallowed such sum on observing that the said payments were shown as credit entry in the books of Assessee and whereas on perusal of the documents as filed by the Assessee along with written submissions such sum was paid by the Assessee as advance, which according to him is a contradictory stand. It is an undisputed fact the Assessee has claimed a sum of ₹ 1,24,500/- on account of Gift to Customers in his Profit Loss Accounts and it is evident from the books of accounts. It is observed from the assessment order in page no-4 and 5 wherein the AO discussed the det ..... X X X X Extracts X X X X X X X X Extracts X X X X
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