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2016 (11) TMI 1232 - ITAT KOLKATA

2016 (11) TMI 1232 - ITAT KOLKATA - TMI - Disallowance of stitching and washing charges - genuity of expenditure - Held that:- AO disallowed the amounts which were paid to the M/s. Sticher Co. without considering the fact the TDS on such amount was deposited with Government proof of which a certificate to that effect was furnished before the AO, inspite of which making disallowance is unwarranted. - Therefore, it shows the transactions are genuine and reliable to the fact, that, as per the .....

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of business transaction also proved to be correct in the context of the business activity of the assesse and in connection thereto the job works performed by the parties therein mentioned in page-2 of order of AO and the AO could not bring on record any evidence contrary to the evidence produced by the Assessee. Therefore, we are of the opinion, that the disallowance ought not to have made by the AO - Decided in favour of assessee - I.T.A No. 1934/Kol/2012 - Dated:- 10-8-2016 - Shri P.M Jagtap, .....

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ioner of Income-tax (Appeals) erred in confirming disallowance of ₹ 605325/- of stitching and washing charges. 2. The sole ground in this appeal to be decided is as to whether CIT-A was justified in confirming the disallowance made by the AO on account of stitching and washing charges. 3. The assessee is a firm and engaged in manufacturing and trading of readymade garments. The assessee filed its return of income on 26-10-2007 declaring a total income of ₹ 1,76,007/- and under scruti .....

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artment of Posts. The details of the same as per the AO are reproduced as under: SI. No. Name of Karigars Total amount paid Remarks of the Postal Department 1 Mofizul Mollah 48,032 Not known 2 Hasan Ali Mollah 46,048 -do- 3 Sasiul 44,791 Incomplete address 4 Pintu Naiya 45,576 Not known 5 Zakir 49,136 No trace, incomplete Name & address 6 Khokon 47,622 No trace, incomplete Name & address 7 M/s. Stciher Co 3,25,000 Not known 8 M/s. Kiran Laundry 48,000 Not known 9 M/s.Hollywood Bolywood 4 .....

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TDS from M/s. Sticher Co. in March, 2007 and deposited belatedly in May, 2007 and even the amount of ₹ 3,25,000/- made to M/s. Sticher Co. was not allowed and disallowed entire amount of ₹ 9,30,325/-. 6. In 1st appeal the assesse submitted that the stitching and washing charges were performed by the skilled job workers at their respective residential premises in muffusil areas in Howrah, Hooghly, South 24-Parganas & North 24 Parganas districts and is major part in the manufactur .....

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s. Sticher Co. without considering the fact the submission of TDS certificate and complete details of such entity which was also produced before the CIT-A. 7. Considering the above submissions the CIT-A allowed the claim of the assesse in respect of M/s. Sticher Co involving an amount of ₹ 3,25,007/- and observed as under: The submission of the Appellant have been considered and it is seen that the AO had issued notices of verification in support of the stitching and washing charges to par .....

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this case the Appellant had not only deducted TDS on the payment of ₹ 3,25,000/-, but also issued TDS certificate to this party which had its full address as well as PAN. Therefore the payment can neither be considered as unverifiable nor be disallowed by the AO u/s. 40(a)(ia) on the ground TDS had not been deposited by 31st March, in view of the decision of Hon'ble ITAT in Piyush C. Mehta Vs. ACIT relying on the decision of Kolkata High Court in CIT vs Virgin Creations in ITA NO.302 o .....

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ot justified and the same is deleted. However in respect of the remaining cash payments to 13 parties which could not be verified, it is seen that the Appellant has not given any evidence to substantiate its claim and since notice by the AO had been issued on the address given by the Appellant only, the Appellant's plea for allowability of these payments cannot be accepted. Even if the expenditure is held to be for business purpose the AO was well within his jurisdiction to verify the genuin .....

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ness of the transactions nor the parties could be established, nor there is any evidence to the contrary before me in Appeal. Therefore, considering the totality of the circumstances, the disallowance made by the AO in respect of the 13 payments totaling to ₹ 6,05,325/- as per list in para 2 above, is held to be justified and upheld (Relief ₹ 3,25,000/-). 8. Aggrieved by the order of CIT-A, the assesse before us by this appeal. In support of grounds of appeal, the Ld.AR that it was a .....

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