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2016 (2) TMI 831 - AT - Income TaxTDS u/s. 194C not paid - Addition u/s. 40(a)(ia) - payment of labour charges - non genuineness of the entire payment - Held that:- On perusal of the Ld. CIT(A)’s order, the remand report submitted by the AO, further enquiries conducted by the Ld. CIT(A), we do not find any infirmity in the order passed by the Ld. CIT(A) in deleting the disallowance made u/s. 40(a)(ia) of the Act as the payment made by the assessee to karigars is not contractual and therefore, the provisions of Sec. 194C have no application. The Ld. CIT(A), however, sustained the disallowance made by the AO at 20% of the labour charges holding that assessee has not been able to establish the genuineness of the entire payment. As could be seen from the remand report of the AO, the assessee produced the workers to whom he has paid labour charges. They have produced their ID proof, PAN, Driving Licence, Adhar card. They have stated that they are the main karigars during relevant period and confirmed that they have received the payments from the assessee by way of either in cash or in cheque. The workers two of them filed copy of bank books in Development Credit Bank, Kurla and Bank of India. They have also confirmed that the lump sum amounts received from the assessee are distributed among other works as wages. Therefore it cannot be said that the assessee has not proved incurring of expenditure. Taking all these facts into consideration, we are of the view that the lower authorities are not justified in coming to the conclusion that the expenses are not genuine. In the circumstances, we delete the adhoc disallowance made by the AO at 20% of labour charges. - Decided partly in favour of assessee
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