https://www.taxtmi.com/caselaws?id=314410 The ITAT Delhi upheld the CIT(A)'s decision to delete the AO's disallowance of payments to contractors for loading, unloading and packaging services. The AO had alleged the contractors were bogus or ex-employees with unverifiable addresses. However, during remand proceedings, five of six contractors were produced before the AO and confirmed providing labor services. The sixth contractor's statement was also recorded by CIT(A), confirming labor supply. The CIT(A) found that cash withdrawals by company employees from contractors' accounts were legitimate arrangements to ensure payment distribution to laborers. The use of ex-employees as contractors was justified for reliable labor supply continuity. Bills prepared on company premises were reasonable given contractors lacked separate infrastructure. The tribunal noted wage rates were within industry standards and books were not rejected. en-us Tue, 06 Feb 2024 00:00:00 +0530 Thu, 06 Jun 2024 20:09:24 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=314410 The ITAT Delhi upheld the CIT(A)'s decision to delete the AO's disallowance of payments to contractors for loading, unloading and packaging services. The AO had alleged the contractors were bogus or ex-employees with unverifiable addresses. However, during remand proceedings, five of six contractors were produced before the AO and confirmed providing labor services. The sixth contractor's statement was also recorded by CIT(A), confirming labor supply. The CIT(A) found that cash withdrawals by company employees from contractors' accounts were legitimate arrangements to ensure payment distribution to laborers. The use of ex-employees as contractors was justified for reliable labor supply continuity. Bills prepared on company premises were reasonable given contractors lacked separate infrastructure. The tribunal noted wage rates were within industry standards and books were not rejected. Case-Laws Income Tax Tue, 06 Feb 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=314410