2010 (10) TMI 867

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....63 for making further disallowance in respect of labour charges. (2) That the CIT has in assuming jurisdiction under Section 263 grossly failed to appreciate the settled legal position that the assessment order framed under Section 143(3) after making enquiries cannot be subject to revision under Section 263. (3) That the CIT has in assuming jurisdiction under Section 263 grossly failed to appreciate that it is not permissible for the CIT under the proceedings under Section 263 to re-examine the accounts/records and substitute his judgment for that of the AO. (4) Without prejudice to the foregoings, the CIT has on merits grossly erred in making addition of Rs. 7,27,756 on account of labour charges. (5) That the CIT has grossly e....

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.... discussed in para 4.11) 9.45% Labour charges to be allowed Rs. 2,37,73,602 Labour charges claimed    Rs. 2,46,01,358 Labour charges to be disallowed Rs. 8,27,756 Labour charges already disallowed by the AO on ad hoc basis in the assessment order     Rs. 1,00,000 Further disallowance to be made out of labour charges   Rs. 7,27,756"  5. We have heard both the parties and have carefully perused the orders of the authorities below. In this case, the AO vide letter dt. 5th Feb., 2008 issued a detailed query requiring the assessee to furnish various details, documents, evidences and information along with written explanation. These are 14 items in respect of which details wer....

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....ch will be added to the total income of the assessee." 6. From the aforesaid observations, it is clear that sum of Rs. 50,000 out of labour charges was disallowed in asst. yr. 2006-07 when total labour expenses were claimed at Rs. 1,14,70,836 against total receipts of Rs. 3,46,42,784. As against Rs. 50,000 disallowed in earlier year, the AO has disallowed the sum of Rs. 1 lac in the year under consideration. In the year under consideration, the turnover has increased from Rs. 3,46,42,784 to Rs. 8,07,25,305 and the labour expenses have been increased from Rs. 1,14,70,836 to Rs. 2,46,01,358. Thus, there is a substantial increase in total turnover vis-a-vis labour expenses. The increase in turnover and labour expenses is commensurate to eac....