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TMI Blog2012 (8) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... cord would be a voucher or labour register. Since the AO has not denied that the Appellant has maintained documentary evidence and the AO has not pin-pointed any defect in the same the disallowance made at 10% of the labour expenses on the reasoning that the documentary evidences are self made cannot be sustained - in favour of assessee. Disallowance of excess claim of depreciation on medical equipments - Held that:- CIT(A) has examined the usage of each of the equipment in question and, therefore, rightly held that they were nothing but in the category of “life saving medical equipments” on which depreciation @ 40% was allowable - in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... bove table Rs.3357337/- claimed during the previous year relevant to assessment year is disallowed and added to the total income. I am, therefore, satisfied that the assessee has furnished inaccurate particulars of income and, therefore, penalty proceedings u/s.271(1)(c) are separately initiated." Being aggrieved, the matter was carried before the first appellate authority. 3. After hearing the submissions and on appreciation of the facts of the case, the Learned CIT(Appeals) has deleted the addition in the following manner:- "5.4. I have considered the contention of the Appellant as well as the findings of the AO in the assessment order. A survey action u/s.133(A) was conducted at the business premises of the appellant and certain incriminating documents impounded. On the basis of those incriminating documents when confronted the appellant made a disclosure of income of Rs.1,02,35,000/- for the Asstt.Year 2006-07 after recasting the trading accounts as on 10.01.2006. The appellant further admitted that the additional income generated was applied in the same projects and found in the form of closing stock of Rs.90,00,000/-, cash in hand of Rs.4,87,000/- and sundry advances of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was admittedly incurred in the past. In support of the above argument, he has placed reliance on the submissions made before the Learned CIT(Appeals) as follows:- "As business of the appellant in Shivani Park Project is development of and shopping centre. It took about 2 years to complete project. There was no sale in A.Y. 2005-06 and development work was also incomplete so the appellant carried forward in complete development work of Rs.1,62,46,272 as closing stock of work in progress in Land development account. In A.Y. 2006-07 the appellant brought forward work in progress of Rs.1,62,46,272 opening stock of work in progress and added development expenses incurred during A.Y. 2006-07 Rs.40,80,613 so the total development works out at Rs.2,03,26,885/-. The A.O. added following Rs.33,57,337 development expenditure incurred during A.Y. 2005-06 and carried forward as closing stock of work in progress in A.Y. 2005-06." 5.1. He has further argued that there was inconsistency in the approach of the Assessing Officer because an another expenditure under the head "labour expenses" was allowed by the Assessing Officer, though that expenditure has already been incurred in the past. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reason to disbelieve the contention of the Appellant because in any development project, the labour cost accounts for 15% to 30% of the total cost and as against that the Appellant has debited labour expenses to the tune of 10.92% of the total receipts which is more than reasonble in the development and construction project. Secondly, the AO has made addition without pin-pointing any glaring defect in any specific voucher of documentary evidence maintained by the Appellant. The AO should have pinpointed that the expenditure is inflated or bogus expenditure has been debited which the AO has not identified in the assessment order. Merely because vouchers or documentary evidences are self made, there is no reason to treat the same as disallowable. When the Appellant has not engaged any contractor and done the development work departmentally, he has to engage labour at his own and cost of the labours cannot be denied and in case of retail labour, one cannot expect a bill but the reasonable record would be a voucher or labour register. Since the AO has not denied that the Appellant has maintained documentary evidence and the AO has not pin-pointed any defect in the same, I am of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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