TaxTMI 
TaxTMI 
2016 (11) TMI 800
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....on of law raised in this tax case appeal is as follows : "Whether on the facts and in the circumstances of the case the Tri bunal was right in holding that the expenditure of Rs. 2.38 crores claimed by the assessee as payment made towards sub-contractors can be allowed as deduction, even though the assessee had not filed any supporting bills or any other evidence for the expenses debited in the assessee's books of account ?" 2. The assessee is engaged in manufacturing/trading of "material handling equipment" like belt conveyors, screw conveyors, elevators, pipe conveyors and other similar products. The assessee has claimed certain expenditure incurred by it by way of payments made to M/s. Erection India and M/s. Tekno Convey....
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.... by the assessee is acceptable as the assessee has produced the proprietaries of both the sub-contracting agencies namely M/s. Erections India and M/s. Tekno Conveyor for examination, who have confirmed that they have carried on sub-contract work for the assessee in the project entrusted by the principal to the assessee. In the face of such material and also in view of the fact that the tax deducted at source by the assessee while making payments to the sub-contractors has matched and the account of payments made to the respective sub-contracting agencies being accurate, when viewed from the perspective of the books of account of the sub-contractors, accepted the plea of the assessee and allowed the appeal. It is against the said order in a....
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....ts made by the assessee are found through the banking channels and hence the Tribunal accepted the same as payments made to a sub-contractor. 5. Sri J. Narayanasamy, learned senior standing counsel for the Revenue would strenuously urge before us that the reasoning which weighed with the Tribunal that since payments made to the sub-contractors have "passed through bank channels" they need not be doubted, is not a sound proposition nor can such a process be a tilting or deciding factor. He would add on further that an accommodating party can also extend necessary help by way of receiving payments through a banking channel and hence such a process of payments is not a substitute method for proving the same as genuine payment, which is requ....
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...., undertaken by the assessee for execution. In the instant case, the work said to have been executed by the sub-contractors is not found as unconcerned or unconnected to the work undertaken by the assessee and hence the claim of payment made for such work by the sub-contractors deserves to be accepted as a genuine expenditure incurred by the assessee. 6. We are also conscious that all payments made through banking channel need not be treated as genuine automatically on their face value. Each such transaction ought to be independently examined and considered and no formal conclusion can be drawn about the genuineness regarding the obligation to effect the said payment merely because the payment was effected through a banking channel. In t....