TaxTMI 
TaxTMI 
2024 (8) TMI 1599
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.... made to various persons and at various sites where he had done work being a civil contractor. The Ld. CIT (A) further ought to have appreciated that the Appellant has submitted all the self-made vouchers and relevant documents which shows the genuine transaction. Thus, the addition made has to be deleted. 4. The learned CIT (A) ought to have appreciated the submission of Appellant that to produce the confirmation for vouchers is not possible and in the absence of the same, to buy peace with department the Appellant requested that to estimate profit at 10% as estimated in work agreement. Thus, the without appreciating the facts of the case the Ld. CIT (A) upheld the order of the AO is bad in law and has to be cancelled. 5. The learned CIT (A) erred in confirming the order of the AO by not considering the fact of the case and not giving further opportunity to make a submission. 6. The CIT (A) ought to have appreciated that the addition or disallowance cannot make without affording proper opportunity to the Appellant. Accordingly, a fresh opportunity has to be given to considered the request made by the Appellant that that to estimate profit at 10% as estim....
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....gainst this assessee is in appeal before us. 7. The ld. A.R. submitted that the Appellant is a civil contractor, carrying on contract work of various government and others, during the AY 2014-15 (FY 2013-14). The Appellant had filed return of income after getting his accounts audited u/s 44AB of the Income Tax Act 1961, along with audit report and statements. The Appellant case was selected for scrutiny for limited scrutiny under CASS for AY 2014-15 to verify large expenditure debited to profit and loss account. The learned AO called for the details towards the expenditure claimed and in response to the notice the Appellant has filed the self-made vouchers and ledger extract were produced before him for verification. Without appreciating the submission of the Appellant, the learned AO proceeded to make a disallowance of expenditure claimed in profit and loss account on estimated bases at 25%. 7.1 She drew our attention to the financials of assessee for these assessment years. Particulars AY 2013-14 2014-15 Sales 82186989 112180248 Labour Charges 25265450 42491859 Net Profit 3765804 5484411 Profit Ratio 3.01% 6.09% 7.2 Further sh....
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....ord. The assessee claimed the expenditure in these assessment years as follows:- A.Yr Disallowance by AO Restricted to 10% 1 2006-07 Nil Nil 2 2007-08 Rs. 1,74,38,149/- Rs. 17,43,815/- 3 2008-09 Rs. 35,52,611/- Rs. 3,55,261/- 4 2009-10 Rs. 40,40,000/- Rs. 4,04,000/- 5 2010-11 Rs. 33,27,170/- Rs. 3,32,717/- 6 2011-12 Rs. 50,71,250/- Rs. 5,07,125/- 7. 2012-13 Rs. 1,81,74,006/- Rs. 4,54,350/- (Restricted to 2.5%) 8 2013-14 Rs. 2,52,34,742/- Rs. 6,30,869/- (Restricted to 2.5%) 6.1 The main reason for disallowance by AO was that payment Labour Charges supported by self-made vouchers and have no signature of recipients. These expenditures mainly pertain to iron ore loading and unloading transit/site marshalling charges and other casual labour charges. According to the assessee, these expenditures incurred at various stages of iron ore movements. These expenses are pertaining to wages paid to various parties, such as workers manually handling iron ore from lorries/railway vehicles to th....
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....ere is no basis for this kind of allegation made by the AO and he has not brought anything on record to establish this contention of him. Being so, we have to reject this plea of the revenue authorities. In our opinion, considering the nature of the business of the assessee, we can take the judicial notice of the fact that if the AO had any doubt with regard to genuineness of any one of the voucher produced by the assessee, he could have drawn sample vouchers and called upon the assessee to produce the concerned recipient to establish the genuineness. Without doing so, making any adhoc disallowance is not legally sustainable. If the Ld. CIT (A) also without carrying on any enquiry, certain percentage of the labour payment at 10% in assessment years 2007-08 to 2011-12 and 2.5% in assessment years 2012-13 & 2013-14 was sustained. This act of Ld. CIT (A) is not justified. In our opinion, the impugned expenditure in fact claimed to have been incurred by the assessee wholly and exclusively for the purpose of its business and it cannot be said that this expenditure is bogus or fictitious and cannot be said that it has not been incurred by the assessee for the purpose of business. We do n....
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....o pay certain extra amounts to port labourers as speed money for promptly and speedily carrying out the labour work of handling cargo beyond working hours and has placed reliance on, the decision rendered by this Court in KONKAN MARINE AGENCIES, supra. It is pertinent to note that in CLIFFORD D'SOZA, supra, payment was made to the sub-contractors in cash as well as by Cheques. In the absence of any challenge to the entries made in the books of accounts by the authorities, in our opinion, the finding recorded by the Assessing Officer as well as the Tribunal that it denied the claim of the assessee for expenditure to the extent of 10% on account of payment of speed money, is perverse as the same is duly supported by the documentary evidence. Insofar as the submission made by the learned counsel for the revenue that in paragraph 4 of the order of the Commissioner the assessee himself had restricted the payment of speed money to 10% is concerned, it is pertinent to note that the restriction was made by the assessee in respect of Assessment Year 200405 and from the grounds of memorandum of appeal before the Tribunal, we find that the assessee had challenged the aforesaid finding whi....