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2020 (1) TMI 131 - ITAT CUTTACKAddition u/s 40(a)(ia) - Non deduction of TDS - HELD THAT:- D.R. could not controvert the situation that payment to Shri K.C.Swain has been made in a small amount which is less than ₹ 20,000/- in a day and there is no contract or sub-contract between the assessee and Shri K.C.Swain. It is also not in dispute that the amount has been paid by the assessee as per the requirement of use of machine hire charges. The AO has not examined and verified the contention and explanation of the assessee, thus, the same is restored to the file of the AO for re-adjudication. Consequently, Ground No.2 of the assessee is allowed for statistical purposes. Addition u/s 40A - cash payments exceeding permissible limits - HELD THAT:- In the present case, the contention of the assessee is that the said payments were paid to truck owners and sub-contractors during the odd hours for meeting the urgent and business necessity, as the payments were required to be paid to the labourers. We also note that the assessee was doing the business in the remote area and specially the amounts were paid for making labour charges and for making certain purchases, where, it is very difficult to make payment through banking channels. In this situation, the provision attached to sub-section (3) of section 40A is to rescue the assessee from the rigour of disallowance under section 40A(3) of the Act. Keeping in view the totality of facts and circumstances and nature of work undertaking by the assessee, the disallowance restricted by the CIT(A) of ₹ 4,24,045/- cannot be held as sustainable. We accordingly, direct the AO to delete the same. Addition u/s 68 - unexplained cash credit - HELD THAT:- When the assessee has furnished his bank accounts , PAN No. and proof of address, it cannot be presumed that the identity and creditworthiness has not been proved. The onus shifted on the AO to contradict explanation of the assessee but there is no exercise by the AO in this regard for dismissing explanation and corroborative evidence by the assessee. Once there is proof of taking and repaying the loan, the addition in this regard is not called for.
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