TaxTMI 
TaxTMI 
2014 (4) TMI 111
X X X X Extracts X X X X
X X X X Extracts X X X X
....tricting the disallowance of labour charges of Rs.21,87,956/- made by the A.O. u/s.40(a)(ia) of the Income Tax Ac, 1961 to Rs.1,34,400/- In doing so, the CIT(A) has not appreciated the fact that the assessee has not established before the A.O. that out of payments of Rs.21,87,956/- Rs.18,62,196/- pertain to purchases and that these purchases are reflected in the sales or closing stock has not been verified by the A.O. 2. The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored." 2. The succinct facts of the case are that the assessee is a proprietor of M/s Novelty Exports, engaged in the business of tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....herefore, filed again before the CIT(A), who in turn forwarded these evidences and submissions to the AO to submit his comments and a remand report. In the remand report dated 6-9-2010, the AO stated that due to pressure of work and assessment was getting time barred, then the AO might not have been in a position to give sufficient time. In any case, if the there was some mistake in the details of labour expenses and in the grouping of expenses, the assessee should have filed a revised return under Section 139(5), which has not been done by the assessee. Thus, such a mistake done by the assessee while preparing details of labour expenses, now, cannot be rectified without filing of revised return in view of the decision of the Hon'ble Suprem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ard to the issue involved, was furnished by the assessee before the A.O. during remand proceedings or collected by the AO under Section 133(6), even if it is presumed that the AO has passed the assessment order on 26-11-2009 itself. 3.2 Regarding AO's objection for admission of additional evidence, he held that opportunity was given to the AO on the documents which was furnished before him after passing of the assessment order and most of the documents relate to the contentions raised before the AO during the course of assessment proceedings only. For admission of additional evidence under such circumstances, he also relied upon various decisions, which have been discussed by him at page 7 of the appellate order and ultimately admitted all....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... shall be disallowed 40(a)(ia). Accordingly out of the total disallowance of Rs.21,87,956/-, a sum of Rs.1,34,400/- only is sustained and the balance is deleted." 4. Before us, learned DR after referring to the bifurcation of expenses given at page 145 of the paper book, submitted that the assessee has only debited Rs.21,87,956/- on account of labour charges and the major expenses has been debited in the month of July. In any case, labour expenses were which is in consonance with the figures of overall purchases. If a sum of Rs.18,62,196/- is removed, then there is only a small component of labour expenses which aggregates to Rs.3,25,760/-, which is on a much lower side, looking to the overall affairs of the assessee, it cannot be held tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rders of the AO as well as learned CIT(A). The main issue involved is to whether the labour charges debited in the profit and loss account includes purchases of materials or not. It appears that, before the AO the assessee had furnished the details of invoices for the purchases made from various parties. However, such evidences were not accepted by the AO on the ground that the assessment order has already been passed. All these details and evidences were again sent back to the AO during the course of appellate proceedings by the learned CIT(A) and remand report was called for. Thus, all these evidences have been duly confronted to the AO, who has failed to examine the same. Learned CIT(A) after dully verifying the details, has given a clea....