https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=761444 https://www.taxtmi.com/caselaws?id=761444 Addition u/s 68 - onus to prove - loan received by the assessee during the year under consideration - CIT(A) deleted addition - HELD THAT:- There is no dispute regarding the fact that both parties, who have lent a loan to the assessee, have furnished their PAN, ITR acknowledgement and also complied with notice issued u/s 133(6) of the Act. Thus, we are of the considered view that identity in the present case of the loan lender cannot be doubted. As regards the allegation of the Revenue that the assessee failed to produce both parties for evidence, it is pertinent to note that both parties made due compliance and responded to the notice issued u/s 133(6) and filed the documentary evidence to prove their identity and creditworthiness and genuineness of the transaction. AO has merely raised doubt as regards the loan confirmation submitted by Mr. Mahesh Purohit only on account of a mismatch in signature, which we found to be only in respect of one out of three loan confirmations pertaining to the said transaction and in view of the fact that the said transaction is duly supported by the bank statement, such a doubt appears to be merely a pretext to doubt the transaction by the assessee without any substantial material being brought on record. In any case, the Revenue has not denied the submission of the assessee that the loan was ultimately repaid on 24/02/2014, i.e. in the year under consideration itself. Thus, we are of the considered view that in the present case, the assessee has discharged the initial onus of proving the identity and creditworthiness of the loan lenders and the genuineness of the transaction. Accordingly, we find no infirmity in the findings of the learned CIT(A) in deleting the addition. Disallowance of transport and hiring charges and reduction of disallowance on account of wage and labour charges - CIT(A) deleted addition - HELD THAT:-It is evident from the record that the AO neither controvert any of these details furnished by the assessee nor examined the parties to whom payment was made despite the availability of PAN details and only on the basis that bills and vouchers have not been presented in respect of material and transport/hiring charges made the disallowance. It is further pertinent to note that the disallowance was only restricted to 10% of the expenditure and the entire expenditure of INR 1,13,90,636 as claimed by the assessee was not disallowed. At this stage, it is also relevant to note that in the year under consideration the assessee has shown a total sale of INR 12,16,47,493. Such being the facts, we find no infirmity in the impugned order in deleting the ad-hoc disallowance of 10% made on account of material, transport and hiring charges by the AO. For labour charges incurred by the assessee, we find that the assessee has merely provided the list of parties to whom such charges have been paid - We are of the considered view that even if these parties are daily wagers, the assessee being a contractor would have maintained a record having at least the details regarding the date of payment made to these parties and the work contract in respect of which these payments have been made. However, it is evident from the record that the said details were not provided by the assessee. It is evident from the record that the AO made a disallowance at 10% in respect of wage and labour expenses which has further been reduced by the learned CIT(A) to 2%. However, in view of the fact that the assessee is a registered civil contractor for MCGM and has undertaken various work contracts for authorities, it cannot be denied that the assessee would have incurred wages and labour charges for the purpose of its business. Therefore, in view of the peculiar facts and circumstances of the present case as noted above, we are of the considered view the disallowance @2% made by the learned CIT(A) on account of wage and labour charges is justified and thus the same is upheld. Case-Laws Income Tax Thu, 07 Nov 2024 00:00:00 +0530