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2016 (6) TMI 1247 - AT - Income TaxDisallowance u/s 40(a)(ia) - non deduction of tax at source - Held that:- A.R. of the assessee, before us, has submitted that since the TDS was deducted by the concerned party/agent and some of the expenses were in the nature of reimbursement of actual expenditure; therefore, the disallowance was not warranted. He has submitted that he may be given an opportunity to demonstrate before the AO in this respect. Considering the above submissions of the Ld. A.R., we are of the view that interest of justice will be well served, if, the assessee is allowed an opportunity to demonstrate before the AO regarding the above submissions. We accordingly restore this issue to the file of the AO for consideration of the contentions of the assessee only in relation to payment made to M/s. J.N. Freight Forwarders Pvt. Ltd. However, the disallowances made in respect of the other two parties M/s. M. Liladhar and M/s. Lincs Cargo Pvt. Ltd. are hereby confirmed. Addition under section 69C - unconfirmed/unproved purchases - Held that:- Where the assessee filed letters of confirmation of suppliers, copies of bank statement showing entries of payment through account payee cheques to suppliers and stock reconciliation statements, sale of purchased goods was not doubted, the transactions were supported with evidences and confirmations, in such an event merely because the suppliers have not appeared before the AO or the Ld. CIT(A), one can not conclude that the purchases were not genuine. We do not find justification for the addition made by the lower authorities in this respect. Hence, the additions made by the lower authorities on account of bogus purchases under section 69C of the Act are therefore ordered to be deleted. Additions made on account of excess stock - Held that:- CIT(A) observed from the quantitative details of sales and purchases of the two items, that the entire quantity of the said two items was sold/exported during the relevant year under consideration and no closing stock of these items was left with the assessee at the end of the relevant accounting year. That the assessee had duly explained the mistake resulting in showing the excess stock and the said mistake was duly rectified by filing a revised return within the limitation period prescribed. On account of these facts and evidences, the Ld. CIT(A) held that the AO was not justified in rejecting the revised return filed by the assessee. He held that the mistake of wrongly showing the closing stock at the enhanced value of ₹ 80,98,900/- was fully verified and the same being inadvertent mistake apparent from record and the revised return being filed in time, the rejection of the said revised return by the AO was wrong. He directed the AO to accept the revised return and to delete the addition on account of excess stock of two items. No infirmity in the above order of the Ld. CIT(A) relating to the issue under consideration and the same is accordingly upheld.
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