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2012 (9) TMI 734 - ITAT AHMEDABADDisallowance of transport and octroi charges u/s 40(a)(ia)r.w.s. 194C - A.Y. 2005-06 - Held that:- On perusing the records of assessee there is nothing on record to show that the assessee has paid the entire sum of transportation charges before 31st March,2005 and there is nothing payable as on 31st March, 2005 - As the allowability of deduction u/s. 40(a)(ia) has not been examined by the A.O. in the light of decision of Special Bench in the case of Merilyn Shipping (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) the issue needs to be re examined, thus the matter should be remitted back to the file of A.O. for verification - in favour of remand by way of remand. Disallowance of wages - Held that:- As A.O. had not pin pointed any defect in wage register & has merely disallowed the payment for the reason that there were no signatures of the recipient on revenue stamp in the wage register and has further presumed that the assessee has inflated expenses on wages without pin pointing to any specific instance no disallowance on adhoc basis can be made - in favour of assessee. Addition in respect of valuation of closing stock - partial relief by CIT(A)- Held that:- As the assessee had not considered stock of work in process while valuing the closing stock and the assessee has submitted that it does the job of dyeing and printing on job work charges and while valuing the closing stock, the stock of WIP is already included based on that CIT (A) has granted partial relief - As assessee here has not pin-pointed the working of valuation of closing stock which would show that valuation of work in process is also included in it & has also not been in a position to demonstrate as to what was the break up of own material and that received for processing on job work basis no reason to interfere with the order of CIT (A) - against assessee. Non deduction of TDS - Disallowance of labour charges u/s 40(a)(ia)- A.Y. 2006-07 - Held that:- As decided in M/s. Alpha Projects Versus DCIT, Ci rcle-1(1) [2012 (4) TMI 466 - ITAT, AHMEDABAD] since the TDS has been paid to the account of Govt. before filing of return of income, no disallowance is called for - as in this case assessee has credited the amount on 31-3-2005 and tax was also deducted on that date. The TDS of RS.17,728/- was deposited in the Govt. account on 24-5-2005 i.e. before the date of filing of the return. (return was filed on 29-10-2005) no addition seems to be warranted - in favour of assessee. Addition on account of inflated purchases - Held that:- Difference of Rs.4,33,130/- was observed in the purchase register and the A.O. made addition on the basis of the difference and the statement of Accountant of assessee - As it is undisputed fact that the books of accounts of the assessee are audited by the auditors. CIT (A) had primarily agreed with the contention of the assessee and therefore directed the A.O. verify the reconciliation and delete the addition if the assessee’s contention was found correct. No infirmity in the directions of CIT (A) to the A.O. to verify and then delete if the assessee’s contention is found correct, thus no interference is called for in the order of the CIT (A) - in favour of assessee. Disallowance of transport and octroi charges u/s 40(a)(ia) - Held that:- The provisions of section 40(a)(ia) are applicable only to the amounts of expenditure which are payable as on the date 31st March of every year and it cannot be invoked to disallow which had been actually paid during the previous year, without deduction of TDS as in the present case, since there is no sum payable as on 31-3-2006, following the decision of Special Bench in the case of Merilyn Shipping (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) we delete the addition made by A.O. - in favour of assessee.
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