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2017 (5) TMI 366 - AT - Income TaxAddition towards sundry creditors for others u/s 68 - assessee failed to furnish details of creditors like partywise breakup, confirmation duly attested in the account copy and bank account details of the creditors - Held that:- Once the genuineness of the expenditure was not doubted, the creditors arised out of such expenditure cannot be added u/s 68 of the Act, for the simple reason that the assessee has failed to furnish confirmation letters from parties. We further observed that the assessee has filed a paper book containing details of expenditure incurred under the head Arogya Shree schemes along with ledger extract. On perusal of the details filed by the assessee, we find that the assessee has provided expenditure incurred towards medical camps through marketing agents and the same has been settled subsequently in the next financial year as and when the amount has been received from State Government. Therefore, we are of the view that once the expenditure has been accepted as genuine, the A.O. was erred in treating the creditors arised out of such expenditure as unexplained credits u/s 68 of the Act. The CIT(A) after considering relevant submissions of the assessee and also analyzing the ledger extracts, rightly directed the A.O. to delete the additions made towards sundry creditors for others shown under the head current liabilities. We do not find any error in the order of the CIT(A). - Decided against revenue. Disallowance of 10% expenditure incurred under the head Arogya Shree schemes - Held that:- Since the expenditure incurred under the head Arogya Shree schemes mostly remains payable at the end of the year, it is very difficult to ascertain the genuineness of expenditure and also mode of payment, whether the same has been paid by cheque or cash. The A.O. has identified the cash payments and disallowed 10% of such expenditure. In case of the remaining expenditures, because the entire expenditure has been treated as unexplained credits, the A.O. would not have gone into the genuineness of expenditure. The CIT(A) after considering the nature of expenditure and also fact that most of the expenditure are supported by self-made vouchers rightly directed the A.O. to disallow 10% of total expenditure incurred under the head Arogya Shree scheme. We do not find any error in the order of the CIT(A). - Decided against assessee. TDS u/s 194J - professional charges paid to Doctors u/s 40(a)(ia) for failure to deduct tax at source - Held that:- On perusal of the ledger extract filed by the assessee, we noticed that the assessee has paid professional charges to visiting consultants on day to day basis, which is much below the threshold limit provided u/s 194J of the Act for deduction of tax at source. Therefore, we are of the view that the assessee not obliged to deduct tax at source on such professional charges. The A.O. without appreciating the facts simply made additions u/s 40(a)(ia) of the Act. No disallowance u/s 40(a)(ia) if expenditure has been paid before the end of the financial year - alternative plea of the assessee - Held that:- As in the case of Merilyn Shipping and Transporters Vs. ACIT (2012 (4) TMI 290 - ITAT VISAKHAPATNAM ) has considered the issue and after considering the relevant provisions of the Act, observed that no disallowance can be made u/s 40(a)(ia) of the Act, if expenditure has been paid on or before 31st March of the financial year. In this case, the assessee has filed necessary evidences to prove that the expenditure has been paid before 31st March of the financial year. Therefore, we are of the view that the assessee need not to deduct tax at source u/s 194J of the Act on professional charges paid to doctors as the said payment does not exceed the prescribed limit provided u/s 194J of the Act for deduction of tax at source. - Decided in favour of assessee.
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