2018 (7) TMI 2115

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.... For the Revenue : Dr. P. V. Pradeep Kumar, Addl. CIT ORDER PER LALIET KUMAR, JUDICIAL MEMBER : The present appeal is filed by the assesseee, an individual, against the order of the CIT (A)), Gulbarga, dt.26.07.2017, for the assessment year 2013-14, on the following effective grounds of appeal : 2) The Hon'ble Commissioner of Income Tax (Appeals) ought to have allowed the expend....

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....ce with the provisions of the Act. 2. With respect to grounds 2 and 3, it was the contention of the assessee that the AO had disallowed the expenditure under the heading 'Contractors' Benevolent Fund' (CBF) for an amount of Rs. 1,28,300/- stating that the expenditure is not allowable u/s.37 of the Act. 3. Before us the Ld. AR has submitted that the assessee is a first class civil contractor ....

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....I0n our view the contractor is under an obligation to deduct tax by notification issued by the Government of Karnataka, dt.18.1.2007 to make the payment of CBF which is equivalent to 1% of the estimated cost of the contract and therefore this is an expenditure which is wholly and solely related to the business of the assessee. However in our view, whether actually this amount is spent by the asses....

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....ion letter from the said NBFC to prove the payment of interest on the loan amount. However copies of the said confirmation was submitted to the CIT (A). The CIT (A) has not verified the statement so submitted before him and has confirmed the order passed by the AO. 6. The Ld. AR has submitted that the assessee had merely made the payment of interest to NBFC and it had offered the interest payme....