Addition made on Lumpsum basis on account of payment of labour charges in cash, Income Tax

[Kishor Vishnu]

One of my client, a civil contractor, paying labour charges on cash basis ( payments do not violate the provision of Section 40A(3). But the assessing officer disallowed Rs. 4,50,000 out of labour charges on lumpsum basis and gave the reason in AO that due to payments made in cash I am disallowing the same. Is there any decision given by the Courts against such vies of AO ?

Posts / Replies

[GOPALJI AGRAWAL]

You will have to demonstrate that these expenditures were genuine and evidence with the necessary details. Whether you have been given any opportunity for such addition and what stand you have taken. So it would depend on the facts and circumstances then any case law would come to your rescue on the basis of facts.