TaxTMI 
TaxTMI 
2020 (12) TMI 437
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.... (Appeals) has erred in observing that assessing officer is justified in rejecting book results although the same are not rejected by assessing officer & he further erred in estimating G.P @ 12% without any basis. 3. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in disallowing interest expense of Rs. 20,000/-. 4. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in disallowing expenditure of Rs. 1,00,000/- u/s40(a)(ia) of the I.T. Act, 1961. 5. It is therefore prayed that the above addition made by Assessing officer and confirmed by learned Commissioner of Income-tax (Appeals) may please be deleted. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal." 2. At the outset, Shri Sapnesh Sheth, Learned Counsel for the assessee informs the Bench that assessee does not want to press Ground No.3 raised by him, to which, ld. Departmental Representative (DR) ....
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....ain the same. The Assessee explained that the basic reason for increase in labour charges in the month of March was that the Firm was doing the sub contractual work of M/s. Megha Infra Project Pvt. Ltd. of Road work of R & B Panchayat Surat and Tapi District. Assessee further stated that most of the work was done and executed during the month of March 2010 therefore the labour expenses were higher in March 2010 as compared to other months. 6. However, the Assessing Officer rejected the contention of the assessee and held. that since no specific details regarding site wise claim of labour expenses nor any vouchers for proving genuineness of such claim were furnished by the assessee, therefore the claim of disproportionate increase in labour expenses for the month of March 2010 was not accepted by the assessing officer. Hence, the claim of expenses in the month of March was restricted by the assessing officer to the average claim of the months of January 2010 and February 2010, that is, (50,42,420 + 41,67,885/2) at Rs. 46,05,152/-. The Balance claim of labour expenses of Rs. 66,01,113/- (1,12,06,265 - 46,05,152) was disallowed and added back to the total income of the assessee. 7. ....
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....he month of March 2010 have been paid, in the subsequent months of April 2010 to July 2010 is a highly abnormal pattern and not acceptable in practical scenario. Besides, the assessee did not file required documents and evidences pertaining to labour expenses during the assessment stage. The assessing officer asked the assessee, to furnish site-wise break-up of monthly labour charges, alongwith worker's information in specified format, which had been reproduced on page nos. 4 and 5 of the assessment order, however, the assessee had failed to submit the same, therefore addition made by the assessing officer should. be sustained. 10. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. First contention of the learned counsel is that the Gross Profit percentage taken by the ld. CIT(A) at the rate of 12%, is arbitrary and taken by the ld. CIT(A) outside the books of accounts of the assessee, therefore it is not acceptable. In order to verify the veracit....
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....te that during the assessment stage assessing officer asked the assessee, to furnish evidences and details particularly site-wise break-up of monthly labour charges, alongwith worker's information in specified format, which had been reproduced on page nos. 4 and 5 of the assessment order, however, the assessee had failed to submit the same. Such evidences and details particularly site-wise break-up of monthly labour charges could. have helped the assessing officer to correlate the reasonableness of the quantum of labour expenses, incurred at each site with the quantum of work done at each site in that month. Such data would. have helped assessing officer to examine whether the labour expenses incurred at each site are reasonable or not. The refusal of the assessee to furnish the said evidences is like pushing the assessing officer to wall and then challenging his estimation on the ground that assessing officer`s/CIT(A) estimation is arbitrary and without base. Thus, it is clear that the assessee is having a non-complaint and blatant attitude towards the revenue. 11. We note that Assessing Officer has not held that labour expenses so claimed by the assessee were not incurred by the....
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....is in appeal before us. 15. Learned Counsel for the assessee submitted before us that the assessee had paid Rs. 1,00,000/- towards salary expense, therefore no TDS is attracted and hence the addition made by the Assessing Officer may be deleted. 16. On the other hand, Ms. Anupama Singla, Learned Departmental Representative (DR) for the revenue submits before the Bench that assessee has not produced any evidence to establish the relationship of employer and employee, that is, master and servant relationship is absent between payer and payee. It is a lump sum payment of Rs. 1,00,000/- which does not relate to salary expense. Therefore, addition made by the assessing officer should. be confirmed. 17. We have heard both the parties and perused the material available on record. We note that during the year under consideration, on verification of accounts assessing officer noticed that assessee has shown expenditure of Rs. 1,00,000/- to Shri Ghanshyambhai Vekariya under the head "account charges" which was subsequently paid on 01.01.2011 but no TDS was deducted by assessee. Assessing officer issued a show cause notice dated 21.03.2013 as to why disallowance should not be made u/s 40(....