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2020 (5) TMI 109 - AT - Income TaxAddition towards the processing charges on account of non-deduction of TDS - Payment exceeding the limit as specified in the TDS certificate or not? - HELD THAT:- In the statement furnished u/s 131 by AR of M/s Cham trading organization, it was clearly admitted that it has received plant hiring charges but there was no finding on such charges received by the party by the AO. AO has accepted the plant hiring charges paid by the assessee to the party. Thus, the finding of the AO in itself is contradictory in the given facts and circumstances. Therefore we are reluctant to make any reference to such finding of the AO. Assessee has made the payment to the partner of M/s Cham trading organization under the instruction. Merely, the payment made to thirdparty under the instruction of the main party cannot be ground to make the disallowance of the expenses. Furthermore, the Shri Ramjibhai Kanji bhai is representing the partnership firm in the capacity of the partner. Thus, payment to the partner cannot be a ground for making the disallowance. There was no documentary evidence brought on record suggesting that earlier TDS certificate issued by the AO for ₹ 50 lakhs was substituted by ₹ 1.50 crores. Thus it is transpired that the TDS certificate issued by the AO up to ₹ 2 crores whereas the payment was made less than ₹ 2 crores. Payment in the given case does not exceeds the limit as specified in the TDS certificate. Hence the ground of appeal of the revenue is dismissed. TDS u/s 194C/195 - addition u/s 40 (a)(ia) - terminal handling charges on account of non-deduction of TDS - Applicability of provisions of section 172(8) - HELD THAT:- Handling charges were recovered/received by the agents of the non-shipping companies as evident from the invoice issued by them which are placed. There is a Circular issued by the CBDT. The said Circular No. 723, dt. 19th Sept., 1995 states that where the provisions of s. 172 are to apply, the provisions of ss. 194C and 195 relating to tax deduction at source are not applicable. We also find that handling charges paid to the non-shipping companies also covered under the provisions of section 172(8) DR at the time of hearing has not brought anything on record suggesting that the handling charges were not paid by the assessee to the non-resident shipping companies. In view of the above, we hold that the assessee was not liable to deduct the TDS under the provisions of section 194C/195. - Decided against revenue. Addition of unpaid liabilities u/s 41(1) - AO found that these are very old creditors appearing in the books of accounts of the assessee AND assessee has not filed any confirmation to the fact that these liabilities are still appearing in the books of accounts - HELD THAT:- . There is no dispute about the fact that the liability shown by the assessee has not ceased to exist in its books of account and the same is very much reflected in its balance sheet. Therefore, in our considered view, the same cannot be added to the total income of the assessee u/s 41(1) of the Act until and unless it is not written off in the book of accounts. See OPTO AUDIO ELECTRONIC PRODUCTS PVT. LTD., KOLKATA VERSUS ITO., WARD-11(2), KOLKATA [2012 (7) TMI 613 - ITAT, KOLKATA] - We hold that there cannot be any income on account of cession of liability which has not been written back by the assessee in its books of accounts. - Decided against revenue. Addition of travelling and conveyance expenses, telephone and postage expenses, and motorcycle maintenance expenses - AO on estimated basis disallowed such expenses to the tune of 10% - HELD THAT:- onsidering the nature of the business of the assessee and past history, we feel that the disallowance to the extent of 5% as restricted by the learned CIT (A) is reasonable. Accordingly, we do not want to disturb the finding of the learned CIT (A) - Decided against revenue.
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