TaxTMI 
TaxTMI 
2014 (2) TMI 428
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.... section 271(1)(c) of the Act. 3. The learned DR submitted that various defects were pointed out by the AO in the assessment order with regard to the claim of the assessee for deduction of expenditure under the head "wages". He submitted that the assessee has claimed workers' wages to the tune of Rs.2,98,52,958/- in the accounts of the head office under the head "manufacturing expenses". He submitted that the AO found that the assessee was showing in garment account all the payments in cash for daily wages and no attendance register was found to be there. The vouchers produced for the verification by the assessee were also found unreliable. The AO has observed that there were no voucher numbers of these vouchers and the addresses of the re....
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....ate of 20% was made by the AO and this is a clear case of certain disallowance made by the department. He submitted that the assessee had maintained vouchers for all the expenditure incurred under the head "wages to workers" and this has been admitted by the AO. The learned counsel for the assessee submitted that the assessee has declared higher GP at 21.77% during the year, as against 8.92% in the earlier years on the segment of garment sales. Regarding difference in the voucher numbers, he submitted that voucher number was generated by the computer, and therefore, could not tally with the number found on the voucher itself in the vouchers produced by the assessee. He submitted that the assessee has filed a detailed explanation, and there ....
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....e assessee under the head "wages to workers" was made due to cash payments made to the workers and certain defects in the supporting vouchers maintained by the assessee. These facts of the case may justify a certain amount of disallowance out of the expenditure of wages claimed by the assessee, but are not sufficient to justify imposition of penalty under section 271(1)(c) of the Act. We find that in the absence of complete and convincing corroborative evidence, the Revenue may justifiably disallow certain part of the expenses claimed by the assessee, but in the matter of penalty proceedings, the onus lies heavily on the Revenue to prove that the assessee had concealed its income or has filed inaccurate particulars of its income. In this ca....