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TMI Blog2012 (7) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... d u/s 133(6) only one supplier did not appear - if the information u/s 133(6) is not furnished, the claim of deduction cannot be denied only on the ground - in favour of assessee. Addition of Rs.3,00,000 on account of labour charges and verifiable expenses - Held that:- AO had not made any specific finding to reach at the figure of disallowance as the addition is an ad hoc addition and while making the addition he had ignored the fact that percentage of labour charges to gross turnover had come down to 13.73% as against 16.99% in the preceding year - CIT(A) has rightly restricted the disallowance to 1.00,000 - in favour of assessee. Addition on account of random checking of vouchers from which he found that payments for an amount of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... times. 2. The brief facts of the case are that return of income in this case was filed on 30.9.2008. Subsequently, the case was selected for scrutiny under CASS. The assessee is a firm engaged in the business of civil construction. The Assessing Officer completed the assessment by making the following additions:- 1. Addition on account of non production of purchase bills. Rs. 14,25,000/- 2. Disallowance on account of Labour charges wages. Rs. 3,00,000/- 3. Disallowance on account of Unverifiable purchases. Rs. 3,00,000/- 3. During the course of assessment proceedings for verification of purchases, the Assessing Officer issued enquiry letters u/s 133(6) to various suppliers from whom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mons u/s 133(6) to six suppliers including M/s Rathi Bar Ltd. Every one responded. However, letter to M/s Rathi Bars Ltd. Came back un-served with the remarks party left . 2) The assessee had filed copy of ledger account of M/s Rathi Bars Ltd. along with evidence of payment through bank and an affidavit in support of supply of material by suppliers together with certificate from site In-charge for utilization of material. 6. The Ld CIT(A) on the basis of submissions made by the Ld Assessing Officer deleted the addition made on account of purchases of Rs. 14,25,000/-. The relevant portion of CIT(A) s order in this respect is reproduced below:- I have gone through the assessment order and written submission of the appellant. During th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of projects undertaken on various sites. The assessee had filed muster roll in respect of wage expenses of few sites. The Assessing Officer observed from the vouchers that muster roll was self generated and payments were made in cash and there were certain discrepancies in the form of non availability of father s name/address and non availability of signatures. Considering the nature of contract business, volume of business and type of expenditure, the Assessing Officer made disallowance of Rs. 3,00,000/-. 8. Aggrieved the assessee filed appeal before Ld CIT(A). 9. The CIT(A) restricted the addition to Rs. 1,00,000/- keeping in view the fact that percentage of labour charges on gross turnover had actually come down to 13.73% as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndary proof and has no value in the absence of primary proof. He further argued that affidavit filed by the assessee regarding purchases is self attested and is of no use. Regarding second third additions with respect to deletion of addition on account of labour charges and un-verifiable purchases, he argued that disallowance was very small keeping in view the total expenses and these disallowances were made due to certain irregularities in vouchers and payments to labour and due to non availability of purchase bills of petty amounts. He further argued that disallowances were necessary to cover up the possibility of certain bogus expenses/bogus purchases. 15. The Ld AR, however, relied upon the order of Ld CIT(A) and reiterated that all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach at the figure of disallowance. The addition is an ad hoc addition and while making the addition, the Assessing Officer had ignored the fact that percentage of labour charges to gross turnover had come down to 13.73% as against 16.99% in the preceding year. Therefore, ld CIT(A) has rightly restricted the disallowance to 1.00,000/-. In the case of third addition the Assessing Officer had made addition on account of random checking of vouchers from which he found that payments for an amount of Rs. 90,537/- were not available. The assessee had explained that due to work at various sites these might have been lost. The Assessing Officer had made a finding in respect of Rs. 90,567/- only in which the vouchers were not available. Therefore, Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X
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