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2017 (9) TMI 843 - AT - Income TaxTDS u/s 194C - expenses on account of Hire Charges U/S 40(a)(ia) for non deduction of TDS - assessee has obtained form No.15-1 from the sub-contractors - Held that:- Once assessee has obtained form No.15-1 from the sub-contractors whose contents are not disputed or whose genuineness is not doubted then assessee is not liable to deduct tax from the payments made to sub-contractors. Once assessee is not liable to deduct tax u/s 194C then disallowance u/s 40(a)(ia) cannot be made. We also found that the assessee has also brought to the notice of AO vide letter dated 06/12/2010 that recipient of higher charges do not own more than two vehicles. Affidavits to this effect in support of its contention was also filed before the CIT(A). The issue under consideration is directly covered by the decision in the case of Valibhai Khanbhai Mankad vs. DCIT (ITAT) [2011 (4) TMI 887 - ITAT, AHMEDABAD]. Accordingly, we direct the AO to delete disallowance made u/s.40(a)(ia). Addition in respect of the amount deposited in the bank account - Held that:- Both accounts are duly disclosed in the balance sheet. Form the above details it is clear that cash deposited in the Shamrao Vitthal Co Op bank is out of the cash balance available with the assessee and are duly disclosed in the books of accounts. Accordingly AO is directed to delete the addition so made Disallowance 10% of the expenditure - Held that:- Total expenditure of ₹ 48,21,503/- was debited by the assessee in its profit and loss account. The AO has detailed this expenditure in para 7 of his order and after observing that assessee has failed to submit details of expenses and bills / invoices etc., he made an estimated disallowance of 10% of these expenses. However, looking the quantum of income earned by assessee vis-à-vis nature and amount of expenditure incurred to earn the same, we deem it appropriate, considering the totality of facts and circumstances of the case to reduce the disallowance from 10% to 5%. Accordingly, we confirm the disallowance so made by the AO to the extent of 5%. Appeal of the assessee allowed in part.
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