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2015 (7) TMI 1279 - AT - Income TaxGenuineness of the expenditure claimed - Held that:- We find that as per the agreement dated 04.05.2007 the assessee had to perform certain functions and for that purpose it had incurred expenditure. AO has not doubted the genuineness of the expenditure. The FAA has given a finding of fact that AO had made the disallowance merely on presumption.The DR was not able to controvert the assertion made by the FAA. The assessee had furnished the details of the expenditure. We are of the opinion that the order of the FAA does not require any interference from our side. So, confirming his order we decide ground no.1 against the AO. Prior period expenditure - assessee follows mercantile system of accounting - Held that:- It is found that the assessee had not produced any documentary evidence in support of its claim,that during the appellate proceedings it furnished bill/vouchers and the FAA considering those documents granted relief to the assessee.But,as per the provisions of Rule 46A of the Income-tax Rules,1962 the FAA is required to forward the new evidences to the AO or has to admit the same under sub rule 4 of the Rules. We do find that the FAA has not followed any of the sub section of the Rule 46A and has decided the matter without calling for remand report from the AO. In the interest of justice,we are remitting back the matter to the file of the AO for limited purpose of verification of the bills/vouchers not produced before him and furnished to the FAA for the first time.- Decided partly in favour of revenue TDS u/s 194J OR 194C - Disallowance being expenses on account of mixing supervision and packing supervision - TDS liability - Held that:- We find that the AO had made the disallowance as he was of the opinion that mixing supervision and packing supervision fell in the category of fees for technical services.He invoked the provisions of section 9(1)(vii)r.w.s.194J and 40(a)(ia). We find that he has not elaborated as to how the mixing and packing supervision can be termed fees for technical services-a term having its definite meaning.In our opinion,the FAA has rightly held that it was a pure and simple labour contract and was covered by the provisions of section 194C. - Decided against AO TDS u/s 194C - Disallowance of loading and unloading expenses u/s.40(a)(ia) - Held that:- AO had made the disallowance as he was of the opinion that the loading and unloading charges were covered by the provisions of section 194C and that the assessee was liable to deduct tax for such payments.The assessee had made payments for loading and unloading to the unskilled daily labourers and there was no contract between the two parties.It had produced the necessary documents along with the vouchers before the AO. There was no justification in holding that the payments were covered by Section 194C of the Act and the assessee had to deduct tax at source. Therefore, in our opinion,the order of the FAA does not suffer from any legal or factual infirmity
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