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2023 (7) TMI 1037 - ITAT CHANDIGARHDisallowance of revenue expenditure - HELD THAT:- As assessee out of small turnover of Rs. 2.55 Cr has declared the profit of approximately Rs. 19 lacs which is 7.44% of the turnover. We do not find justification on the part of the lower authorities in disbelieving the small payments booked by the assessee to villagers/labour etc. during the execution of his work specially when execution of the work has not been doubted and the recipients were illiterate labourers/tractor operators etc. Therefore, the impugned addition agitated vide ground No. 2 is ordered to be deleted. Addition of cash credits - assessee claimed in respect of the aforesaid receipts that the same were business receipts - HELD THAT:- No justification on the part of the CIT(A) in confirming the impugned additions. The payment of Shri K.C. Sharma has been made by cheque and there is no denial that assessee has received the said payment from Shri K.C. Sharma. Even there is a cross-verification of the ledger/books of account of Shri K.D. Nirash and there is no denial that the assessee has carried out work from them and the payments were business receipts which have been duly accounted for towards the income of the assessee and due tax paid thereupon. Therefore, the impugned additions are not sustainable, same are, accordingly, ordered to be deleted. Addition u/s 40A(3) - assessee had made cash payments to the labourers, CIT(A) restricted the addition to 50% of the addition made by the AO - HELD THAT:- No justification on the part of the CIT(A) having admitted the contention of the assessee that the aforesaid payment was made out of compulsion to the labourers, therefore, the impugned addition is ordered to be deleted. Addition on account of non-deduction of tax at source (TDS) invoking the provisions of Section 40(a)(ia) - HELD THAT:- This issue is restored to the file of the AO to consider the contentions of the assessee and to verify that the aforesaid payments have been taken into consideration by the respective payees for the purpose of their computation of income and due tax, if any paid thereupon. Disallowance of notional interest - assessee had given certain interest free loans - HELD THAT:- Assessee has explained that the assessee had sufficient own funds to give interest free loan. This fact could not be rebutted by the ld. DR, therefore, the impugned addition is not sustainable. The same is ordered to be deleted.
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