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2018 (8) TMI 1368 - CALCUTTA HIGH COURTDisallowance of expenses - selling expenses - promotional expenses - expenses towards packaging material purchases - genuineness of the transactions - failure to deduct TDS u/s 194C/ 194H on selling expenses and promotional expenses - Disallowance u/s 40(a)(ia) - CIT(A) deleted the additions - ITAT confirmed the order of CIT(A) Held that:- The Tribunal accepted the findings of the First Appellate Authority on the counts we have referred to in the preceding paragraphs. The Tribunal has analysed the provision of Section 194C and has given a specific finding that the said provision was not attracted in the subject case. So far as the assessee’s claims for deduction in respect of packaging material expenses, sales promotional expenses as well as selling expenses, the Tribunal accepted the findings of the First Appellate Authority. Before the Tribunal, it was urged on behalf of the Revenue that the distributors to whom incentives were paid could not be sent notices under Section 133(6) as the assessee had not provided complete address. This submission was made in support of Revenue’s stand that the recipients thereof were not genuine. But in the appendage to the assessment order, to which we have referred to earlier, there is specific reference to such notices being sent. The Tribunal further found that there was no violation of Section 194H of the Act as the transactions involved were all purchases and sales. There was no actual transaction between the parties for the target incentives and only credit notes were provided to the distributors who had achieved the target which they could redeem at the time of subsequent purchases. Decided in favour of assessee.
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