2017 (4) TMI 1659

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....mnath Ghosh, Ld. Advocate appeared on behalf of assessee and Shri Anand Kumar Singh, Ld. Departmental Representative represented on behalf of Revenue. 2. Solitary issue raised in this appeal of assessee is that Ld. CIT(A) erred in confirming the order of Assessing Officer by sustaining the disallowance of Rs. 2,76,518/- incurred towards earth cutting expense on the ad-hoc basis. 3. Facts in brief are that assessee in the present case is an individual and engaged in the business of brick field, hire charges of lorry etc., The assessee is a proprietor of two concerns namely Sundry Brick fields and Maa Mangalchandi Brick Field. The assessee has claimed earth cutting expense for Rs. 19,42,960/- and Rs. 8,22,220/- in its two both proprietor co....

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....substantial expenditure on earth cutting expense. However, no verifiable evidence could be produced before the AO, to enable him to cross verify the extent of expense claimed. As the AO had claimed the expense, the onus was cast upon him to produce necessary evidence which would enable him to cross check the extent of expense claimed. Evidences such as muster roll register containing the name and address of the labour employed labour return filed with labour department, statutory deposits such as PF, ESI etc done, needs to be maintained in support of expense, considering the volume of expense claimed. In absence of the same, AO had correctly disallowed a part of it. In view of the above, appellant's appeal on this ground is dismissed." Bei....

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....expenses 4. Maintenance of the books of accounts interest back to such expenses 5. Prevailing practice for the incorrect of such expenses in the relevant industry etc. These are some factors which the assessing officer needs to consider before making the disallowances for any expenses in the absence of any supporting documentary evidence. 6.1 In the instant case before us we find that the assessee is engaged in the business of brick fields which is labour intensive industry. The assessee has to deploy labourers for various purposes. The AO has made the disallowances on the ground that the name and the addresses of the recipients were not reflecting in the vouchers produced before him. From the above observation of the AO it is clear t....

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....allowances in mechanical manner which is not are correct method. In these circumstances, we are of view that the estimated disallowance is not sustainable in the eyes of law. In this connection, we also rely in the order of Co-ordinate Bench of ITAT Kolkata in the case of Animesh Sadhu Vs. ACIT in ITA 11/Kol/2013 Dated 12.11.2014. The relevant extract is reproduced below:- "8. We have considered the rival submissions. A perusal of the assessment order shows that the Assessing Officer has disallowed 20% of the expenses on estimate basis on the ground that no independent verification to be made to find out the authenticity of the expenses. Ld. CIT(Appeals) has reduced the same on the same ground. However, we are of the view that no estimate....