Singh Construction Corporation Vs DCIT (ITAT Kolkata)
Sub-Contract Payments Not Bogus Merely Because Payee Didn’t File Return: ITAT Kolkata Deletes ₹54.37 Lakh u/s 69C
Kolkata ITAT ‘D’ Bench allowed the appeal for AY 2018-19 and deleted the addition of ₹54.37 lakh made u/s 69C towards alleged bogus sub-contract expenditure. Tribunal held that once the assessee had deducted TDS u/s 194C, deposited the same with the Government, furnished PAN, confirmations, bills, ledger accounts & TDS returns, the expenditure could not be treated as bogus merely because the sub-contractor had not filed return of income. ITAT noted that payments to the same sub-contractor were made in preceding & succeeding years in the normal course of business and the AO failed to bring any adverse material to disprove genuineness of services. Non-compliance by the recipient cannot be a ground to disallow genuine business expenditure in the hands of the payer. Accordingly, the order of CIT(A) was set aside and AO was directed to delete the addition.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 26.06.2025 for the AY 2018-19.
