https://www.taxtmi.com/caselaws?id=789118 Ad hoc disallowance of labour charges was found unsustainable where the assessee produced labour bills, confirmations, vouchers, bank records and contractor responses to notices under Section 133(6). The books were not rejected under Section 145(3), stock records showed no discrepancy, and labour charges were an integral business expense in jewellery manufacturing. As there was no evidence that cash withdrawals by contractors were returned to the assessee, and flawed field-verification reports could not alone prove bogus expenditure, a percentage-based disallowance without a specific finding of inflation or non-business use was held arbitrary. The disallowance was deleted. en-us Mon, 30 Mar 2026 00:00:00 +0530 Fri, 03 Apr 2026 08:49:35 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=789118 Ad hoc disallowance of labour charges was found unsustainable where the assessee produced labour bills, confirmations, vouchers, bank records and contractor responses to notices under Section 133(6). The books were not rejected under Section 145(3), stock records showed no discrepancy, and labour charges were an integral business expense in jewellery manufacturing. As there was no evidence that cash withdrawals by contractors were returned to the assessee, and flawed field-verification reports could not alone prove bogus expenditure, a percentage-based disallowance without a specific finding of inflation or non-business use was held arbitrary. The disallowance was deleted. Case-Laws Income Tax Mon, 30 Mar 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=789118