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2017 (10) TMI 1510 - AT - Income TaxTDS us 194C - addition u/s 40(a)(ia) - Making Payment to the so-called Contract Labour expenses without deducting TDS - only explanation for non-deduction of tax as submitted by the Ld. Counsel for the assessee, that no amount was payable - HELD THAT:- We find that Ld. CIT(A) given a finding on fact that evidences were produced by the assessee do not inspire confidence. We find that Ld. CIT(A) was not decided the issue whether the tax was deductible and the provision of Section 40(a)(ia) of the Act was applicable. Therefore, considering the totality of the fact, we deem it proper to restore this issue to the file of the Ld. CIT(A) to decided afresh, after considering the submissions of the assessee. This ground of Assessee’s appeal is allowed for statistical purpose. Addition of 3% of the contract expenses - HELD THAT:- We find that Assessing Officer on the one hand they had stated that the assessee has contravened provision of Section 40A (3) of the Act on the other hand he proceeded to make disallowance of 3% of the total contract expenses. Disallowance is made on adhoc basis without specifying as what were the expenses were that not got verified by the assessee. Under these facts, the addition so made cannot be sustained. - Decided in favour of assessee.
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