Disallowance unsustainable in absence of proper verification of evidences submitted

Ajaipal Mangal & Co. Vs ACIT (ITAT Mumbai)

Disallowance unsustainable in absence of proper verification of evidences submitted justifying payment to sub-contractors

ITAT Mumbai held that assessee duly furnished details like PAN, sub-contract amount and details of TDS justifying payment to sub-contractors. Merely disallowing 10% of sub-contract expense without verifying the veracity of assessee’s claim based on the evidences produced is unsustainable in law.

Facts-

During the course of assessment proceedings, upon perusal of profit and loss account it was observed that assessee has debited sub-contract charges amounting to Rs. 7,94,82,965/-. Accordingly, the assessee was asked to furnish party-wise details of sub-contract expenses, bank statement highlighting payments to subcontractors, TDS, copy of agreements entered with the sub-contractors.

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