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2012 (7) TMI 731 - AT - Income TaxDisallowance of expenses - invoking provisions of Section 40(a)(ia)on non deduction of TDS - Held that:- To reject the contention of the assessee that there was no liability for deducting TDS on payment to one of the main recipient was a sick unit and was under BIFR as there is no such provision under the Income Tax Act to give a different treatment to the companies, who are under BIFR, thus disallowance on account of weaving charges is confirmed in toto - the matter relating to processing charges and service charges are sent back to AO to verify as to whether the payment on each occasion was less than Rs. 20,000/- and it did not exceed Rs. 50,000/- in that year - partly in favour of assessee. Disallowance of expenses - invoking provisions of Section 40A(2)(b) - Held that:- On concluding that payment of Rs. 1,20,000/- paid towards hiring of cars was within the terms of contract which again comes within the purview of "work in pursuance of a contract" as defined under Section 194(C). Since the payment is above Rs. 50,000/-, the assessee was liable to deduct the TDS - against assessee. Disallowance of expenses - invoking provisions of Section 68 - Held that:- From the perusal of the record, it is seen that Rs. 3,33,000/- has been withdrawn from the cash book on 29-5-2004 and the same has been deposited in the bank account on 18-6-2004. Thus, there is a direct nexus between the withdrawals from the cash book and the deposits made in the bank account - thus addition made u/s.68 are deleted as no point of unexplained cash credit arise here - in favour of assessee.
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