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2015 (11) TMI 63 - ITAT KOLKATADisallowance U/s 40(a)(ia) - packing material expenses in the form of job charges paid without deduction of tax u/s-194C - Held that:- A work does not include where supply of a product according to requirements or specification of a customer by using materials purchased from a person other than the customers. Hence, the provision of Sec. 194C does not attract to the present case. The case cited by the Ld. DR is not applicable as it was decided in the context of the provisions of Bombay Sales Tax Act 1959 and it has no nexus with the provisions of section 194C of the Act and consequently there was no application of provisions of section 40(a)(ia) of the Act. Hence, this ground of Revenue’s appeal is dismissed.- Decided in favour of assessee. Disallowance of sales promotion & selling expenses - assessee failed to produce any details such as address, PAN etc., of the payee - genuineness of the expenses not proved - violation of section 40(a)(ia) viz a viz section 194C - CIT(A) deleted the addition - Held that:- It has been noted that the Ld. AO recorded the transaction not genuine in the absence of the complete address of the distributors. But the AO did not issue even a single notice to any of the party out of the list provided at the time of assessment under section 133(6) of the Act. So it was not appropriate on the part of the AO to conclude the parties not genuine. Besides the AO has also not appreciated the volume of the business viz a viz the PAN India dealer network. With regard to the violation of the provisions of section 194H read with section 40(a)(ia), the AO held such transaction as of principal and agent. From the aforesaid submission of the assessee, it is clear that the transaction was of a purchase and sale. There was no monetary transaction between the parties for the target incentive. Only the credit notes were provided only to the distributors who have achieved the target which they can redeem at the time of subsequent purchases. So we are of the opinion that the transaction is out of the purview of the TDS provision. At the end, we find no infirmity in the order of the CIT(A) - Decided in favour of assessee.
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