2012 (10) TMI 1148 - AT - Income Tax

Summary

Issues involved:
The judgment involves issues related to the disallowance of expenses u/s material purchases, site expenses, labor expenses, and miscellaneous expenses for the assessment year 2008-09.

Material Purchases:
The Revenue challenged the CIT(A)'s decision to direct the AO to make a disallowance of 20% on an estimate basis due to the absence of bills/vouchers amounting to Rs. 40,84,809 under the head "Material Purchases." The assessee contended that all details were provided, and the disallowance was excessive. The Tribunal upheld an addition of Rs. 4 lakhs for material consumed, considering the lack of bills for certain items.

Site Expenses:
The Revenue questioned the CIT(A)'s direction to make a 10% disallowance instead of the 20% disallowed by the AO for expenses under the head "Site Expenses." The assessee argued that all details were submitted, and the disallowance was arbitrary. The Tribunal sustained an addition of Rs. 4 lakhs for site expenses due to the absence of vouchers.

Labor Expenses:
The Revenue contested the CIT(A)'s decision to confirm an addition on account of labor expenses. The assessee provided complete details, including labor muster rolls, but the AO was not satisfied with the genuineness. The Tribunal directed the deletion of the addition made by the AO.

Miscellaneous Expenses:
The Revenue challenged the CIT(A)'s confirmation of an addition for miscellaneous expenses. The assessee made payments through cheques, but the AO disallowed certain amounts due to lack of verification. The Tribunal directed the AO to sustain an addition of Rs. 90,436 for miscellaneous expenses.

Conclusion:
The Tribunal dismissed the Revenue's appeal and partly allowed the assessee's appeal, directing specific additions for material consumed, site expenses, and miscellaneous expenses while deleting the additions for labor expenses.