2015 (7) TMI 1303

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....nged three issues; (i) disallowance u/s 40(a)(ia) of Rs. 1,28,09,141/- cannot be made on the ground that there was no default u/s 194C, because in the earlier year assessee's receipts were below audit limit u/s 44AB; (ii) ad-hoc disallowance of Rs. 5,80,456/- on account of salary and various other expenses, and (iii) disallowance of depreciation of Rs. 28,056/-. 3. The brief facts are that the assessee is a proprietor of M/s Srinivas Clearing & Shipping Agency and is engaged in the business of undertaking Clearing and Forwarding Agent providing services to customers for facilitating import/export of goods by sea as well as for related services. The Assessing Officer noted that the assessee has not deducted tax on the payments shown under....

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....imbursement received by the assessee is not part of the total turnover. Similar is the position in this year also. 5. After hearing both the parties, we find that the preliminary argument raised by the Ld. Counsel appears to be correct, because the provisions of section 194C as it stood prior to 01.06.2008 provided that in case of individual or HUF whose total sales, gross receipts or turnover from business or profession does not exist monetary limits specified under section 44AB during the financial year immediately preceding the financial year in which such sums is credited or paid then he has no liability to deduct income tax under section194C(2). In this case, it is has not been rebutted that assessee's turnover in the immediately pr....

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....ly, the disallowance of Rs. 3,17,184/- under the head salary stands deleted. 9. So far as ad-hoc disallowance on various expenses are concerned, we are of the opinion that the disallowance made by the Assessing Officer and confirmed by the CIT(A) are slightly excessive looking to the nature of expenses, therefore, we restrict the disallowance at 10%. The assessee will get part relief on this score. 10. Regarding disallowance on depreciation on computers, we find that the same was made on the ground that computers were put to use after September, 2006 therefore, disallowance have been made for half of the year instead and full year as claimed by the assessee. This finding of fact as recorded by Ld. CIT(A) and Assessing Officer has not bee....