Patanga Art vs. ITO-41(4)(1)

Parties Involved

Facts Summary

The assessee, Patanga Art, filed a return of income for the assessment year 2018-19 declaring total income at Rs.1,54,01,460/-. The return was selected for scrutiny, and statutory notices under the Income-tax Act, 1961 were issued and complied with. The Assessing Officer observed an expenditure of Rs.93,26,010/- paid to M/s Film Studios Setting and Allied Mazdoor Union. The Assessing Officer asked the assessee to verify whether the expenditure was incurred wholly and exclusively for the purpose of the business. As the assessee failed to justify the expenses, the Assessing Officer in the assessment order dated 24/09/2021 passed under section 143(3) of the Act, disallowed the expenditure of Rs. 93,26,010/-. On further appeal, the Ld. CIT(A) also sustained the disallowance. The assessee appealed against the order dated 24.03.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi. The appeal was heard on 22/08/2024 and the order was pronounced on 30/09/2024.…

Legal Issues

• 1. The Ld. CIT(A) is erred in confirming the sum of Rs.93,26,010/- paid for labour charges to M/s Film studios setting and allied mazdoor union only on the basis of non-response to notice u/s 133(6) by them without verifying the genuineness, business need, business expediency, TDS deduction & payments on such payments, payment through banking channels etc.
• 2. The appellant request to delete the addition confirmed by the CIT.

Judgment Outcome

Decided in favour of Assessee.

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