TaxTMI 
TaxTMI 
2015 (9) TMI 381
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....he Assessing Officer. 3. The brief facts, as culled out from the orders of the authorities below are that the assessee is a proprietor of M/s. Jai Bhavani Constructions, which is engaged in the business of executing civil contracts. In the assessment order, various disallowances were made by the Assessing Officer. One of the disallowances was made under the head "wages". It is seen from the assessment order that the assessee had claimed wages amounting to Rs. 2,60,02,822. According to the Assessing Officer, the ratio of wages vis-a-vis total receipt of Rs. 4,87,25,095/-, comes to 53%, whereas for the immediately preceding year, the assessee had debited wages of Rs. 1,25,42,896, on the total receipts of Rs. 3,44,54,829, which comes to 36% o....
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....ontentions and perused the material placed on record. It is seen that the remand report has been called for by the learned CIT(A) during the appellate proceedings. The Assessing Officer had full opportunity to examine all the facts and evidences as were considered appropriate by him. The remand report is available at Pages-1 to 8 of the paper book filed by the Revenue. Pages-4 and 5 of contain the relevant portion of the remand report, which is on this issue and the same is reproduced hereunder for the sake of ready reference:- "C) Disallowance of Rs.1,82,01,975/- out of wages i. During the course of the assessment proceedings, it was noticed that the assessee has debited a sum of Rs. 2,60,02,822/- on account of wages to the P&L account,....
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....the immediately preceding year. The exact position in this regard has been entabulated as under:- Particulars 31/3/2011 31/3/2010 31/3/2009 31/3/2008 Labour charges received Rs. 4,15,10,100 Rs.2,72,40,734 Rs. 4,87,25,095 Rs. 3,44,54,829 COST OF LABOUR (a) Payments to sub- contractors Rs.1,41,22,423 Rs. 59,46,437 Rs.26,08,279 Rs.1,25,07,518 (b) Wages Rs.1,28,24,737 Rs. 1,08,35,175 Rs. 2,60,02,822 Rs. 1,25,42,896 (c) Salary Rs.24,00,000 Rs. 22,47,400 Rs.29,22,620 Rs. 1,25,42,896 Ratio of cost of labour to receipts 70.70% 69.85% 64.72% 80.44% iii. The wages are claimed to have been paid in cash to various persons. This being so, the veracity of the claim remains unascertai....
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....on of the learned CIT(A) in deleting the disallowance of Rs. 14,61,310, that was made out of salary of Rs. 29,22,620, by the Assessing Officer. 9. The disallowance was made by the Assessing Officer on ad-hoc basis @ 50% of the total claim on the ground that this claim should have been further substantiated by the assessee along with adequate supporting evidence. 10. In the appeal before the learned CIT(A), remand report was called for and the Assessing Officer in the remand report observed as follows:- "D) Disallowance of 50% of expenditure of Rs. 29,22,620/- claimed under the head salary Despite specific request during the course of the assessment proceedings, the assessee did not file requisite details such as name of the employees, ....
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.... contentions and perused the material available on record. It is seen that complete details and evidences have been furnished before the learned CIT(A). The Assessing Officer has examined the details and evidences and nothing adverse was found and he was free to examine whatever further he required and the disallowance cannot be sustained merely on the ground that salary was paid in cash, particularly when complete details and evidences are available. It is further seen that the assessee submitted Salary Muster, and nothing adverse has been reported in the remand report. Keeping in view the facts and submissions and material placed before us, we find that no interference is called for in the order of the learned CIT(A). Thus, ground no.2, r....