DY CIT Vs. KAY POLY PLAST LTD

JUDGEMENT

(1.) This appeal has been filed by the revenue against the order of Commissioner (Appeals), Udaipur, for the assessment year 1993-94.

(2.) The first grievance of the revenue relates to deletion of an addition of Rs. 6,24,916 made by the assessing officer on account of unsubstantiated job charges. The facts of the case are that the assessee had claimed job charges of Rs. 52,77,769 for cutting, bailing, stitching and printing of sacks. The assessing officer sent summons under section 131 to a few parties. But these were returned by the postal authorities 'unserved' in three cases stating that parties were untraceable. In one case, notice server reported that there was no such party. In another case also, the party was not found at the given address. Accordingly, the assessing officer disallowed the job charges of Rs. 6,24,916 paid to these five parties on the ground that these were not genuine.

(3.) Aggrieved, the assessee impugned the disallowance in appeal before the Commissioner (Appeals). It was submitted that payments were made to job workers against their invoices for stitching and printing of sacks. Almost all payments were made by account payee cheques. While making the payments, the assessee also deducted the tax at source and deposited the same in Government account. These parties were also assessed to tax. Necessary returns for the TDS were also submitted before the income-tax authorities. These parties had also carried on the job work in earlier as well as subsequent years. It was also stated that no inhouse facilities of stitching and printing were available in company's factory.