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2023 (7) TMI 896 - AT - Income TaxDisallowance of Payment Labour Charges - 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 - addition made as payment is supported by self-made vouchers and have no signature of recipients - HELD THAT - As decided in own case 2022 (9) TMI 1480 - ITAT BANGALORE 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 - Decided in favour of assessee.
Issues involved:
The judgment involves appeals against the order of NFAC for the assessment years 2015-16 & 2016-17, challenging the disallowance of expenses incurred on wages paid in cash and other additions made by the AO. Issue 1 - Disallowance of expenses incurred on wages paid in cash: The AO disallowed 6% of expenses incurred on wages paid in cash, along with other additions. The assessee contended that the vouchers were prepared in-house due to the illiteracy of workers and were duly accounted for. The Tribunal held that the disallowance was made without rejecting the books of accounts and without specific infirmity, thus not legally sustainable. Referring to a similar case, the Tribunal deleted the addition, stating that the expenditure was genuine and incurred for business purposes. Therefore, the Tribunal allowed the appeal and dismissed the ground taken by the revenue. Issue 2 - Other additions made by the AO: Apart from the disallowance of expenses on wages, the AO also made additions for depreciation and cessation of liability u/s. 41(1) of the Act. The Tribunal, based on the previous order in a similar case, deleted these additions as well, taking a consistent view. Consequently, both appeals in ITA Nos.170 & 171/Bang/2023 were allowed by the Tribunal.
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