TaxTMI 
TaxTMI 
2016 (8) TMI 161
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....re, notice facts from Tax Appeal No. 684 of 2015. This appeal is filed by the Revenue challenging judgement of Income Tax Appellate Tribunal dated 09.01.2015 raising following questions for our consideration: "[A] Whether the Appellate Tribunal has substantially erred in upholding the decision of CIT (A) whereby the disallowance has been restricted to 2.5% from 25% in spite of concurring with AO that the job work charges have been inflated? [B] Whether the Appellate Tribunal has substantially erred in upholding the decision of CIT (A) that the assessee had submitted the necessary details during the assessment proceedings without examining the veracity of such facts independently and without asking remand report from the AO on such new fac....
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....hat the assessee could not give a complete address to whom the payment for job work charges were made, was not correct. The assessee has filed all the relevant details in full addresses of the vendors and copies of their bills. The assessee has pleaded before the CIT(A) that all the vendors were from Bhiwandi, Maharastra and it was not practically possible to obtain confirmatory letters from each of them after the passage of such a long time since the transactions were made. We find that the AO had demanded copies of cheques issued to suppliers, but it was practically not possible to obtain copies of each and every cheque issued to the vendors. We find that the AO could not record any justifiable reason for making disallowance of a higher r....
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....ve that either the parties were bogus or the job charges were inflated to the extent of 25% and in the absence of the same, disallowance made by the AO was not correct. However, the CIT (A) has considered that the turnover of the assessee was Rs. 30.37 crores and the GP of the assessee was extremely low at Rs. 4,72,252/- and some inflation of expenses in respect of job charges could not be denied in this case. In these facts, he has restricted the disallowance out of job work charges to 2.5% as against 25% disallowed by the AO. We are of the considered view that considering high turnover of the assessee and a very low GP shown by him, the possibility of some inflation in job work charges could not be ruled out. Accordingly, the action of th....