TaxTMI 
TaxTMI 
2011 (1) TMI 796
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....g Officer on account of labour expenses for failure of the assessee to substantiate its claim by producing the labour contractors for examination?" November, 2008 made by the Income Tax Appellate Tribunal (the Tribunal) proposing the following two questions:- 2. "Whether on the facts and circumstances of the case, the Appellate Tribunal was justified in holding that the share application money amounting to Rs.6,50,000/- was explained inspite of the fact that the assessee failed to prove creditworthiness of creditors, genuineness of the transaction?" 2. The assessment year is 2000-01 and the relevant accounting period is the financial year 1999-2000. The assessee who is assessed in the status of a limited company is invol....
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.... in appeal before the Tribunal, which came to be dismissed by the impugned order. 4. Mr. M.R. Bhatt, learned senior advocate appearing on behalf of the appellant has invited attention to the order made by the Assessing Officer to submit that the findings recorded by the Assessing Officer and those recorded by the Commissioner (Appeals) are contradictory inasmuch as before the Assessing Officer, the assessee had stated that the labour contractors generally camp at the site and are not having bank account at that place, hence, payments are made in cash for their day to day expenses. However, the Commissioner (Appeals) has found that payments are made by cheque and that the contractors belong to nomadic tribes and as such, have no pe....
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....th respect to contract receipts in the contracts come to 27.62% and 84.22% respectively which cannot www.lexpertsonline.com be said to be excessive considering the nature of the respective contracts. The Commissioner (Appeals) was of the view that Gross Profit rate of 13.45% and 12.43% for contracts for material and labour and contracts for labour only respectively could not be said to be on the lower side. According to Commissioner (Appeals), the assessee was following the mercantile system of accounting wherein the bills in the year end were required to be accounted for in the month of March only; that the outstanding amount was in respect of the bills raised for the months of January to March, 2000 which were duly paid subsequently. Henc....
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....n suspicion by observing that possibilities of incurring expenses for non-business purposes cannot be ruled out. He, accordingly, deleted the disallowance. The Tribunal, in the impugned order, concurred with the findings recorded by Commissioner (Appeals) and was of the view that the Assessing Officer had made ad-hoc disallowance of 15% of the labour expenses without appreciating the explanation of the assessee. 6. Thus, both the Tribunal as well as the Commissioner (Appeals) have recorded concurrent findings of fact to indicate that the assessee had made payments to labour contractors by cheque only; had deducted tax at source out of majority of payments and had filed necessary TDS returns. The Assessing Officer had not pointed o....
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.... the assessee from undisclosed sources. In appeal by the assessee, the Commissioner (Appeals) deleted the addition. In revenue's appeal, the Tribunal placed reliance upon a decision of the Supreme Court in the case of Commissioner of Income Tax vs. Lovely Exports (P) Ltd., (2008) 216 CTR (SC) 195, and held that in the facts and circumstances of the case, the amount of share application money of Rs.6,50,000/- cannot be held to be undisclosed income under section 69 of the Act particularly when all the four persons who had paid share application money were existing income-tax assessees. It was further noted that there was no dispute that the names and addresses of the four persons were given to the Assessing Officer and that the said persons ....