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Issues involved: Assessment under section 143(3) r.w.s. 153 A of the Income Tax Act for the assessment years 2006-07, correctness of order confirming addition of inflated labour charges.
Summary: The Appellate Tribunal ITAT Mumbai heard an appeal challenging the correctness of an order related to assessments under section 143(3) r.w.s. 153 A of the Income Tax Act for the assessment years 2006-07. The appellant contested the entire addition of Rs. 34,53,812 made by the Assessing Officer in respect of alleged inflated labour charges. The case involved a search and seizure operation revealing incriminating documents and statements indicating systematic inflation of expenses through bogus bank accounts. The Assessing Officer disallowed a portion of claimed labour charges based on discrepancies in actual payments and claimed amounts. The CIT(A) upheld the disallowance, citing evidence of deliberate inflation of expenses. The appellant appealed, arguing for a different computation of disallowance based on stock registers and actual payment rates. However, as the stock records were not produced before the authorities, the Tribunal upheld the principle of disallowance but directed the CIT(A) to recompute the disallowance based on actual bills of labour charges received. The Tribunal emphasized the need for cooperation from the appellant in providing necessary details for the revised computation. The matter was remitted to the CIT(A) for further proceedings in line with the Tribunal's directions. In a similar case involving the appellant's group, the Tribunal had taken a consistent view, leading to the remittance of the matter for recomputing the disallowance. The appeal was allowed for statistical purposes.
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