No Disallowance U/s. 40(a)(ia) if retainer-ship expense shown by recipient in their return

Demarte Silk and Sarees Vs ITO (ITAT Chandigarh) The issue under consideration is whether A.O. is correct in disallowing the expense of retainership debited in P & L on the basis of non deduction of TDS u/s 194C when the Same was shown as salary by recipient in their Income Tax return? In the present case, A.O. during the course of assessment proceedings noticed that the assessee had debited Rs. 3,00,000/- in the Profit & Loss account under the head ‘Retainership Expenses’ paid to Shri Daljeet Singh amounting to Rs. 1,20,000/- and Sh. Pawan Kumar amounting to Rs. 1,80,000/-. A.O. m...