Chamunda Electrical Pvt. Ltd. Vs ACIT (ITAT Ahmedabad)
ITAT Ahmedabad Upholds ₹1.21 Cr Subcontract Expense Disallowance — 40(a)(ia) Issue Remanded for Fresh Verification
Assessee, a GETCO contractor, appealed against CIT(A), NFAC, order upholding disallowances made by AO in assessment u/s 143(3). AO had disallowed (i) ₹1,20,000/- as ROC expenses on increase of share capital, (ii) ₹1,21,15,000/- as subcontract expenses, and (iii) ₹15,33,536/- u/s 40(a)(ia) for non-deduction of TDS.
Tribunal noted that the first ground relating to ROC fees was not pressed and dismissed it. Regarding the ₹1.21 crore subcontract expenses, it was found that out of the four payees, one was related to a director, and sufficient corroborative evidence had not been produced to substantiate the genuineness of payments. The Bench upheld the disallowance, agreeing with the findings of AO & CIT(A) that the expenses were not satisfactorily proved.
As to the ₹15.33 lakh disallowance u/s 40(a)(ia), the Tribunal observed that relevant details and supporting documents regarding material purchases were not available on record and had not been examined by the lower authorities. To ensure fairness, the issue was remanded to the AO for verification after providing an opportunity to the Assessee.
Held: Subcontract expense disallowance of ₹1.21 crore confirmed; ROC fee addition not pressed; disallowance u/s 40(a)(ia) remanded for verification — appeal partly allowed for statistical purposes.
