TMI Blog2017 (9) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... sheet. Form the above details it is clear that cash deposited in the Shamrao Vitthal Co Op bank is out of the cash balance available with the assessee and are duly disclosed in the books of accounts. Accordingly AO is directed to delete the addition so made Disallowance 10% of the expenditure - Held that:- Total expenditure of ₹ 48,21,503/- was debited by the assessee in its profit and loss account. The AO has detailed this expenditure in para 7 of his order and after observing that assessee has failed to submit details of expenses and bills / invoices etc., he made an estimated disallowance of 10% of these expenses. However, looking the quantum of income earned by assessee vis-à-vis nature and amount of expenditure incurred to earn the same, we deem it appropriate, considering the totality of facts and circumstances of the case to reduce the disallowance from 10% to 5%. Accordingly, we confirm the disallowance so made by the AO to the extent of 5%. Appeal of the assessee allowed in part. - ITA No.2762/Mum/2012 - - - Dated:- 13-9-2017 - SHRI R.C.SHARMA, AM AND SHRI SANDEEP GOSAIN, JM For The Assessee : Shri Jayant R Bhatt For The Revenue : Shri Pooja Swaro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions and carefully gone through the orders of the authorities below and found from record that the assessee has debited vehicle hire charges paid, to Profit Loss A/c and claimed as an expense. The amount so paid by way of vehicle hire charges to the owner of vehicle is not subjected to TDS as they do not own vehicles in excess of 2 Nos. We found that assessee has filed affidavit from the recipient of income according to which they were not owing vehicle in excess of 2 Nos. The proviso of Section 194C is directed in respect of payment made to the transporter, when transporter is owing more than two vehicles. Proviso of Section 194C reads as under:- (1)-Any person responsible for paying any sum to any resident (hereafter in this section referred to 39- the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and (a) the Central Government or any State Government; or any local authority; or (b) any corporation established by or under a Central, State or Provincial Act; or any company. any co-operative-[society; or]] (c) any authority, constituted in India by o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ursuance of contact between the contractor and the Government of a foreign State or a foreign enterprise or any association or body established outside India.] [ Explanation II) .-For the purposes of this section, where any sum referred to in sub-section (1) or subsection (2) is credited to any account, whether called Suspense account or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.] Explanation III .-For the purposes of this section, the expression work shall also include- (a) advertising; (b) broadcasting and telecasting including production of programmes for such broadcasting or telecasting; (c) carriage of goods and passengers by any mode of transport other than by railways; (d) catering.] (3) No deduction shall be made under sub-section (1) or sub-section (2) from. (i) the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor or subcontractor, if such sum does not exceed twenty thousand rupees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) on or before the 30th June following the financial year.] Form the above It can be observed from the above that Subsection (2) of section 194C of the Income-tax Act, 1961 lays down that when a contractor makes payment of any sum to a resident sub-contractor in pursuance of a contract made with him for carrying out the whole or any part of the work undertaken by Hid contractor, or, for supplying any labour, the contractor shall deduct TDS as income-tax on the income comprised therein, 8. In the instant case before us the assessee has not deducted the TDS by virtue of the proviso as stated hereinabove on the payments made to various truck owners for plying, hiring or leasing goods carriages since the sub-contractors were individual who have not owned more than two goods carriages at any time during the previous year. There is no dispute to the fact that the assessee has to obtain No.15-1 from the sub-contractors while making the payment to them. In the present case other conditions like payment above ₹ 50,000 is not disputed as assessee has admitted that payment to each sub-contractor exceeded the sum in one full year. But since the assessee has obtained form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted. Most of the deposits are out of cash withdrawn from Bharat Co Op bank Limited. During the year under review total withdrawal from bank deposited in banks are as under- Cash Withdrawals from Banks:- Bharat Co Op bank Limited 15046125.00 Shamrao Vitthal Co Op bank 51500.00 Cash Deposited into banks:- Bharat Co Op bank Limited 5411500.00 Shamrao Vitthal Co Op bank 4954600.00 11. The aforesaid both accounts are duly disclosed in the balance sheet. Form the above details it is clear that cash deposited in the Shamrao Vitthal Co Op bank is out of the cash balance available with the assessee and are duly disclosed in the books of accounts. Accordingly AO is directed to delete the addition so made. 12. AO has also disallowed 10% of the expenditure debited to P L Account. By the impugned order CIT(A) confirmed the action of the AO. It was argued by learned AR that all the expenses are duly supported and recorded in audited books of accounts and details of the same were also supplied to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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