TaxTMI 
TaxTMI 
2018 (4) TMI 500
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....e drawn in the name of one person but the signature for having received the amount are of different persons the identity of which was not provided by the assessee. As per AO, the person receiving the payment is not the daily wages/ labourer employed by the assessee and that the person receiving is not an employee of the company. 5. By the impugned order, CIT(A) deleted the disallowance of labour payment after recording the following observation:- 4.5 I have considered the submissions of the appellant as well as the vouchers of cash payments of wages to the labourers along with the supportings enclosed therein. It is seen that under the head "wages and labour charges", the appellant has incurred wages of Rs. 1,98,64,644/- (this is as per schedule 11 of the balance sheet but actual amount acclaimed is Rs. 1,99,74,544/; as per reconciliation submitted to the AO, which is being discussed in para 4.8 below) and for this purpose cash vouchers along with supporting documents are on record. The methodology followed by the appellant is that a voucher is prepared in the name of the concerned Mokadam (supervisor), who is also a labourer but supervises the work of other labourers. ....
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.....2010 is of the gross amount of Rs. 21,074/- (net amount Rs. 16,574/-, after adjusting the advances given of Rs. 4,500) prepared in the name of Satya (apparently a Mokadam) and it consists of the payment of wages to Sattar, Aziz and Shafikul, whose daily attendance sheets and individual payments due, are also enclosed along with the voucher. The net amount of cash has been delivered to some labourer or another Mokadam, who must have gone to the head office with the summary sheet of individual payments due, to above three persons. Another example is the cash voucher No. 941 dated 20.07.2010 for an amount of (gross) Rs. 1,62,740/- in the name of Rajendra (Mokadam). The net amount after reducing advance wages given of Rs. 52,000/- and loan to Rajendra of Rs. 4,000/- is Rs. 1,06,740/-, which is as per the summary list enclosed therewith. The net amount of Rs. 1,06,740/- has been received by labourer Razzak, whose name also appears in the summary list. Another cash voucher is voucher No. 1764 dated 03.11.2010 for a gross amount of Rs. 46,051/- in respect of 6 labourers and the net amount after reducing advance wages of Rs. 23,000 is Rs. 23,051/-. This voucher is also accompanied with th....
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....rnished a confirmation in respect of purchases made from M/s Buildwel Bricks & Sand Suppliers along with copy of its own bank account indicating the payments made, copies of all the bills raised by the said party along with supporting delivery challans which also contain the truck numbers and such truck numbers mentioned in delivery challans also match with the truck numbers stated in the concerned bills issued by M/s Buildwel Bricks & Sand Suppliers. Hence, in my view the genuineness of purchases cannot be doubted. The AO, in the remand report has however raised few other issues i) the address of the party mentioned in the bills and delivery challans is not specific, ii) almost all the bills are for the month of February and March, 2011, iii) the PAN number AVRPP 3299 G in respect of the said party is registered in the name of Lukman Mohamed Ibrahim Patel and not M/s Buildwel Bricks & Sand Suppliers and ii) M/s Buildwel Bricks & Sand Suppliers have closed down their business at the address mentioned in the bills and vouchers and have shifted out of the given address. 5.6 In respect of the above issues raised by the AO, the Ld. AR has clarified that M/s Buildwel Bricks & S....
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....s. 1,09,900/- was labour charges, which were included in "Labour charges" of Rs. 18,54,681/-. After examining these details, the AO reached the conclusion that out of the amount of Rs. 1,98,64,644/-, an amount of Rs. 1,72,00,660/- was the amount where payments exceeded Rs. 20,000/- and hence the same was liable to be disallowed u/s 40(a)(ia) read with section 40A(3) and the amount of Rs. 1,09,900/- was also unexplained. Hence, he disallowed Rs. 1,72,00,660/- u/s 40(a)(ia) read with section 40A(3) and Rs. 1,09,900/- was also unexplained. Hence, he disallowed Rs. 1,72,00,660/- u/s.40(a)(ia) read with section 40A(3) and Rs. 1,09,900/- as unexplained expenditure. 11. From the record we found that the assessee is engaged in the business of civil construction, to carry on the construction activity in addition to other activities one such activity is to engage various labourers and to manage the labourers. Assessee is required has to avail the services of supervisors/Mukadam. Without the services of labourers construction activities cannot have been carried on. Therefore during the normal course of business assessee engaged various categories of labourers and paid wages/salary to them.....