2025 (3) TMI 2217

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r [A.Y.] 2016-17. 2. The assessee has raised the following grounds of appeal: "The Commissioner of Income-tax (Appeals) at the National Faceless Appeal Centre (hereinafter referred to as the CIT(A)) erred in upholding the action of the Assistant Commissioner of Income-tax, Circle 3(1)(1), Mumbai (hereinafter referred to as the Assessing Officer) in invoking the provisions of section 40A(3) and in making a disallowance of Rs 2,07,88,100, being labour and wages expenditure on the ground that the appellants have failed to demonstrate the correctness of the amount paid to contractor(s). The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... under the exception to section 40A(3) r.w.r. 6DD(b). After examining the details and evidence furnished by the assessee, Ld. AO accepted the claim regarding the payment of Rs. 10,86,064/- to the Aurangabad Municipal Corporation as allowable u/s 40A(3) r.w.r. 6DD(b). With respect to the balance cash payment of Rs. 2,07,88,100/-, Ld. AO made the disallowance u/s 40A(3) with the following observations: "5.3 The submission of the assessee is considered carefully, but not found acceptable in total. Payments made to Aurangabad Municipal Corporation and O/o The District Magistrate, Aurangabad amounting to Rs. 10,86,064/- is acceptable u/s 40A(3) r.w. Rule 6DD(b). However, on the other payments, the vouchers submitted by the assessee cont....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....er dated 16.06.2023, the assessee's appeal was dismissed with the following observations: "6.2 The appellant had filed supporting vouchers against payment of labour charges to learned AO and the same were submitted during appellate proceedings. The appellant contested that the payment is made towards daily wages of workers employed for its under-construction site. Such workers do not have bank accounts and the payment is made to contractor on principle to principle basis. 6.3 On perusal of the sample payment vouchers it is observed that the contractor has supplied more than 150 workers in a month for which collective payment of approximately Rs. 9,80,000/- is made to contractor viz. Patil Construction Ltd for one of it....