TaxTMI 
TaxTMI 
2014 (3) TMI 325
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....of cessation of liability. 3. The AO made the aforesaid addition of Rs.2,03,750/- u/s 41(1)(a) of the Act on the ground that the said payment is pending for three years and nothing moved on this account. Since Perfect Engineering Works has refused to work again on the body of trailer and the assessee is not willing to pay unless the work is done to his satisfaction, the AO stated that the liability of the assessee has ceased. The ld. CIT(A) deleted the said addition after considering the fact that the assessee filed a copy of ledger account of M/s Perfect Engineering Works for the period from 1.4.2006 to 7.7.2010 and it is seen that the amount had not been written off by the assessee in its books of account. Therefore, the liability is n....
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....housing facilities. The assessee paid commission to his family members as under : Name Relation amount Rajkumari Makad Wife of the assessee Rs.1,00,000/- Sunil Makad Son of the assessee Rs.1,00,000/- Sunil Makad (HUF) Son of the assessee Rs.1,00,000/- Bharti Makad Daughter-in-law Rs.1,35,000/- Gopal Makad Grand son Rs.1,00,000/- Hema Makad (minor) Grand daughter Rs.1,00,000/- Naresh Makkad Son of the assessee Rs.1,00,000/- Sudha Makkad Daughter in law Rs.1,00,000/- AO stated that the assessee could not substantiate the basis for paying commission to his wife, two daughters- in- law , his grandson and his granddaughter. He has stated that the assessee ....
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....fter considering the above submissions of the assessee has restricted the disallowance to 20% of Rs.6,35,000/- on account of provisions of section 40A(2)(b) of the Act being excessive . Hence, this appeal by the department 8. At time of hearing, ld. DR submitted that no evidence was produced by assessee for services rendered and ld. CIT(A) has accepted the contention of the assessee without any evidence. He further submitted that no basis has been given by the ld. CIT(A) to restrict the disallowance to 20% of Rs.6,35,000/- by considering it excessive under the provision of section 40A(2)(b) of the Act. 9. On the other hand, ld. AR relied on the order or ld. CIT(A). He further submitted that the said payees are assessed to tax and the ....
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....f Rs.3,08,102/- made by the AO out of daily wages and contract charges of Rs.61,62,042/- claimed by assessee. 12. AO has stated that the assessee could not produce any evidence to verify that the total expenditure to daily wages and contract of Rs.61,62,042/- is genuine business expenditures of the assessee. AO has stated that the payments as per vouchers ranging from Rs.1000 to Rs.15000/- and each of the worker is individually paid, amounts as big as Rs.15,000/- in a day. The said vouchers do not establish the actual nature of work executed. Considering the facts and the fact that the said vouchers are self made vouchers, he disallowed 5% of the total claim of the assessee which come to Rs.3,08,102/-. Being aggrieved, the assessee filed....
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....e of the considered view that the AO is justified to make an adhoc disallowance of 5% out of the claim of assessee of Rs.61,62,042/- as entire expenditure was not subject to verification, that the said payment were made in cash against self made vouchers. Hence, we allow ground No.3 of the appeal taken by department reversing the order of ld. CIT(A). 16. In ground No.4 of the appeal, the department has dispute the order of ld. CIT(A) in deleting the disallowance of Rs.61,115/- made by AO out of telephone expenses on account of personal use. 17. The assessee has claimed the expenditure of Rs.6,11,151/- under the head telephone expenses. The AO has stated that personal use of telephone could not be ruled out and accordingly disallowed 1....