TMI Blog2019 (11) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the details produced by the assessee to establish that the payments made to the individuals exceeded taxable limits. Addition made on the basis of presumption is not justifiable. When the assessee had furnished the details of the payment to his employees it cannot be simply rejected without verifying the facts. Therefore, we hereby direct the AO to delete the addition made invoking the provisions of section 194H and 40(a)(ia) . TDS u/s 194J - addition u/s 40 - Disallowance of accounting charges - HELD THAT:- It is pertinent to mention that in small business houses such record are not normally maintained and they are not mandatory. The assessee has also produced the vouchers with respect to the payment made to his employee but, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling goods invoking the provisions of section 194H and 40(a)(ia) of the Act. (ii) The Ld. CIT (A) has erred in upholding the order of the Ld. AO who had disallowed accounting charges incurred for ₹ 2,40,000/- invoking the provisions of section 194J and 40(a)(ia) of the Act. 3. The brief facts of the case are that the assessee is an individual engaged in wholesale trade of oil and lubricants filed its return of income for the AY 2013-14 on 30.9.2019 admitting taxable income of ₹ 17,02,490/-. The case was selected for scrutiny and finally assessment was completed U/s. 143(3) of the Act on 7/3/2016 wherein the Ld. AO made additions by disallowing the expenditures invoking the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 47,50,000. On appeal, the Ld. CIT (A) confirmed the order Ld. AO by agreeing with his view. 5. Before us, the Ld. AR submitted that the amount of ₹ 47,50,000 was paid to employees who were selling the products marketed by the assessee. It was further submitted that all these employee s estimated income was below taxable limit and therefore, deduction of Tax U/s. 192 of the Act is not applicable. It was further argued that in any case the provisions of section 194H of the Act would not be applicable in the case of the assessee because the payments were made in the form of salary to the employees of the assessee who were assigned with the task of marketing the products dealt by the assessee. It was therefore pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. AO to delete the addition made for ₹ 47,50,000 invoking the provisions of section 194H and 40(a)(ia) of the Act. Expenditure incurred for ₹ 2,40,000/-: 7. During the course of scrutiny assessment proceedings, it was observed by the Ld. AO that the assessee has debited in his P L Account an amount of ₹ 2,40,000 towards Accounting Charges. On query, it was explained by the assessee that the outstanding amount of ₹ 2,40,000 was towards salary due to his Accountant Sri Devaraju, Accountant for the previous year 2012-13 which was subsequently paid in the previous year 2013-14. On verifying the payment vouchers, it was observed by the Ld.AO that the payments were made in cash exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val submissions and carefully perused the materials on record. From the orders of the Ld. Revenue Authorities, it is apparent that they have rejected the submission of the assessee for treating the expenditure incurred for ₹ 2,40,000/- as salary simply for the reason that the assessee had not maintained salary register and appointment letters / agreements. It is pertinent to mention that in small business houses such record are not normally maintained and they are not mandatory. The assessee has also produced the vouchers with respect to the payment made to his employee but, they were also rejected by the Ld. Revenue Authorities without valid reasons. The Ld. Revenue Authorities have also not brought out anything on record from the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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