TaxTMI 
TaxTMI 
2010 (12) TMI 811
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....e by the Assessing Officer on the basis of facts and circumstances of the case and materials available on record. 3. The assessee being individual is a labour contractor of Food Corporation of India(FCI) and S.E Railway(SER). During the assessment proceedings the AO noted that following expenditure were debited to the P and L account on account of salary and wages :- Contractee Particulars Amount (Rs.) F.C.I Contract A/c Handling Labour Charges 11,39,200 Casual labour a/c 24,48,700 Labour without P.F a/c 74,85,941 Incentive to Labour 4,15,200 SER Contract A/c Labour charges 20,26,038 Incentive to Labour 1,17,217 1,36,32,296/- 3.1 With reference to F.C.I contract work the assessee only produced the copy of wage sheets of handling labour charges. 3.2 With reference to other expenses no wage sheets were furnished or produced before the AO. No corroborative evidence for payments were also submitted. The AO, therefore, concluded that the expenditure debited under the head 'casual labour', 'labour without PF' and 'incentive to labour' were unverifiable. 3.3 With ref....
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....e subject to E.P.F. - deduction and contribution and no particular deficiency or discrepancy under this head has been detected as such the disallowance made under this head is wholly unjustified. The Assessee produced Wages Payment Register for (1) Handling Labour and (2) Casual Labour duly certified by the Inspector of Food .Corporation-of-india-during- .the-course of-hearing. The Xerox copy of the same are lying with the Assessing Officer who accepted the payments made on account of handling charges wholly, but disallowed Rs. 73,454/- i:e. 3% of the payment made on Account of wages paid to casual labour without any cogent reason. This may please be deleted. B) Disallowance under the head Labour without P.F.: The Labour without P.F. a/c - in case of F.C.I - are the labour charges paid for engaging labour for urgent and immediate requirement through different Agency I Group Leader / Sardar / Mates convened from outside but locally - the names and addresses of those persons were submitted before the Ld. Assessing Officer. During the course of Scrutiny for the Assessment Year 2004-2005, the matter was verified by the Inspector of Income Tax, Purulia. The....
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.... these amenities apart from and in addition to the cash payment of wages for which self made vouchers are kept and accordingly recorded in the books and for providing stimulus some times - lungi, ganji, sharee and umbrellas other items are also required to be given to such labours so that they may be available at call." 5.1 The ld.CIT(A) deleted the addition by holding as under :- 6(i) 3% disallowances in respect of payment related to SER contracts viz. Labour Charges and Incentives to labours Rs. 20,26,038/- and Rs. 1,17,217/- respectively From the above referred discussion, it is clear that the A. 0. has made the addition without bringing on record any concrete material. The only reason given by him in respect of the disallowance out of the work related to SER contracts was that the various registers submitted before him appears to be new without any soiling. In this regard. the, Appellant inter alia appears to be correct that the assessee produced the labour payment register kept and maintained neatly and that instead of appreciating the same, Ld. A. 0. not only made the impugned disallowance, but also treated it with uncalled for remarks as "it appeared t....
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....iled to pin point any defects, discrepancy or bogus or non-genuineness in those expenditures. From the above referred discussion, it is clear that the A.O. has made the additions on presumptions, surmises, conjectures and without any basis. Moreover, the books of accounts were also audited, hence the A. 0. could not had made any addition without pin pointing any defects/discrepancy, and bogusness or non-genuine expenditure etc. in the books of accounts which he failed. Therefore he was not justified in making the addition. 3(v) 3% Disallowance related to F.C.L contracts payments viz, casual labour Rs. 24,48,470/; Labour without P.F. Rs. 74,85,491/- and Incentives to labourers Rs. 4,15,2001- The payments in respect of handling charges and casual labour payments related to FCI are subject to EPF deduction and contribution and hence there is no possibility of any hanky panky in the expenditure. Moreso, when all the expenditures found duly certified by the Inspector of F.C.I. in this regard. No particular defects, discrepancy, bogusness or non-genuineness or any abnormalit under any head has been detected by A.O. in the audited books, the registers and the....
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....by the Appellant before me and reproduced by me in my earlier paras and 1 am inclined to accept the submission of the Appellant. Since the A.O. has failed to pin point any defects discrepancy, bogus, non-genuinè,or any abnormality in the registers, debit vouchers etc. in my considered view, no disallowance was called for in the facts and circumstances of the case, moreso when the A.O. failed to establish that the expenditures were not for the purposes of business, not incidental to business, not during the course business and not for the business exigency. Hence the A. 0. was not incurred justified in making the addition. This ground of appeal is therefore allowed." 5.2 With reference to disallowance of Rs.11,37,455/- u/s.40(a)(ia) it was submitted before the ld.CIT(A) that no payment amounting to Rs.6,40,000/ - was made to Sri Patho Mondal. Only an amount of Rs.1.50 lakh was paid to Sri Patho Mondal on a/c of truck hire charges. He was entitled to receive the hire charges of the truck as and when the same was let out to the assessee. Therefore, he cannot be treated as the sub-contractor of the assessee. 5.3 With reference to payment of Rs.3,81,145/- made....
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....a) of the Act. 6.2 With reference to addition of Rs.4,11,721/ - on a/c of peak credit in saving bank account no.01150066071 with SBI, it was submitted by the assessee before the ld.CIT(A) that the peak credit included an amount of Rs.4 lakh being cash drawn by the assessee from his proprietorship concern, M/s Mondal Constructions and deposited in the said saving bank account. Subsequently, this amount has been returned back to the M/s. Mondal Construction. The impugned saving bank account was not disclosed in the balance sheet of proprietorship concern, M/s. Mondal Constructions, but in the personal statement of the proprietor filed with the return of income. 6.3 The ld.CIT(A) found that the said account was disclosed and filed in the personal balance sheet of the proprietor along with return of income. He also held that the AO has failed to verify and establish that the peak credit amount mentioned in the bank account was unexplained. He, therefore, deleted the impugned amount. 7. Aggrieved the revenue has filed appeal before the Tribunal. 8. Before us the ld.DR relied on the order of the AO in support of ground nos.1 to 3 taken by the reven....