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of <h1>Tribunal upholds decision to delete disallowance of labor and diesel expenses by CIT(A)</h1> <h3>The Income-tax Officer Surat Versus Shri Bhikhabhai Rajabhai Dhameliya</h3> The Income-tax Officer Surat Versus Shri Bhikhabhai Rajabhai Dhameliya - TMI Issues Involved:1. Deletion of disallowance of Rs. 10,22,043/- in respect of labour expenses.2. Deletion of addition of Rs. 8,13,369/- made by the AO on account of diesel expenses.Summary:1. Deletion of Disallowance of Rs. 10,22,043/- in Respect of Labour Expenses:The Assessing Officer (AO) disallowed Rs. 10,22,043/- out of total labour expenses of Rs. 1,02,20,430/- on the grounds that the wages register lacked dates and the wages paid by the assessee were higher than those paid by job workers. The CIT(A) deleted this disallowance, noting that the AO did not reject the books of accounts and that the wage rate comparison was not valid due to the remote location of the assessee's factory. The CIT(A) also observed that the gross profit (GP) and net profit (NP) ratios had improved compared to the previous year, and the total labour expenses as a percentage of turnover had decreased. The Tribunal upheld the CIT(A)'s decision, finding no cogent material or evidence from the Revenue to warrant a different view.2. Deletion of Addition of Rs. 8,13,369/- on Account of Diesel Expenses:The AO made an ad-hoc disallowance of Rs. 8,13,369/- (50% of total power and fuel expenses) on the grounds that diesel bills did not bear the assessee's name and were obtained from different pumps. The CIT(A) deleted this disallowance, noting that the power and fuel expenses as a percentage of own work had decreased from the previous year and that diesel bills generally do not contain the buyer's name. The CIT(A) also observed that the assessee's factory was in a remote location with inconsistent power supply, justifying higher diesel expenses. The Tribunal upheld the CIT(A)'s decision, finding no cogent material or evidence from the Revenue to warrant a different view.Conclusion:The appeal filed by the Revenue was dismissed, and the CIT(A)'s orders deleting the disallowances were upheld. The Tribunal found no illegality or infirmity in the CIT(A)'s decisions.
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