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TMI Blog2012 (9) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... r such expenses were produced and the same were test checked by AO. If the AO was not satisfied with such record, nothing prevented her either to ask the assessee to furnish more information or to bring on record any evidence controverting the claim of the assessee. Even otherwise, the inquiries were conducted by the A.O. nearly about after 2 ½ years from the end of the relevant FY, therefore, the labour contractors cannot be expected to be available at the given address after lapse of such period because they keep on shifting as per the availability of the work. Upheld the order of CIT(A). Appeal decides in favour of assessee. - ITA No. 61/Ind/2012 - - - Dated:- 11-7-2012 - SHRI JOGINDER SINGH AND SHRI R.C. SHARMA, JJ. Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the assessment year 2006-07 (ITA No. 247/Ind/2010 order dated 6th April, 2011). 3. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is engaged in construction activities on behalf of Government department. The assessee in its return declared income of Rs. 1,45,06,688/- filed on 30th September, 2008. The case was selected for scrutiny, therefore, notice u/s 143(2) was issued to which the assessment proceedings were attended by the assessee. The assessee filed confirmations, books of accounts, ledger, cash book, sale and purchase expenses and voucher for such expenses. The assessee declared amount of Rs.32,07,13,221/- showing the net profit of 4.80%. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee along with observations made in the assessment order and by following the decision of the Tribunal, held as under :- 4.2 Coming to Ground No.2 it has to he noted that there is departure in the findings of A.O. as far as disallowance of the Construction Expenses is concerned viz-a-viz findings arrived in earlier Asstt. Year (S) wherein adhoc disallowances were made based on inadequate detailed in bills and vouchers, incomplete addresses of payees and absence of other relevant and necessary details. The A.O. for the year under consideration issued letters calling for information ul s 133(61 from 16 contractors named in assessment order in whose names outstanding amounts were shown as payable. The AO has noted that the appellant filed co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion contractor has to depend on local man power available wherever construction work IS executed and such labourer and construction contractors are by and large illiterate as well as do not earn such income which will require them to obtain PAN and to pay taxes. It was also emphasized that if the appellant insists for labour contractor and labourors having PAN and Income-tax assessability the appellant may never be able to execute contract work in time. Fun her such construction contractors, being not regularly working on behalf of the appellant, it was impossible for the appellant to furnish addresses after two and half years of completion of project at faraway sites and such labourers and contractors move from site to site in search of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant that them labourers and labour contractors may not always have PAN allotted in their names or may not be filing Income-tax returns. It has to he also observed that the maximum amount claimed in the name of contractors which has been disallowed by the AO does not exceed Rs.13.5 la k h s and considering the fact that on such labour contract work normally presumptive rate of 8 0 is adopted, such labour contract may not be subjected to Income-tax. It was maintained by the AR that TDS invariably deducted from all such payments to avoid disallowance u/s 40a(ia) and the gross amount of TDS has been paid at the year end. The AR of the appellant filed copy of TDS challan for Tax Deducted at Source for payment made u/s 194C at Rs.4,23,604/- on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit and that too in the light of the order of the Tribunal for the assessment years 2006-07 to 2007-08 as is evidenced from pages 8 and 9 of the impugned order along with comparative statement of claimed expenses by the assessee and disallowed by the Assessing Officer. We find that the Tribunal restricted the disallowance to the extent of 25%. The assessee by way of a note to the comparative chart of expenses and disallowances has claimed that the net profit is still good. It is pertinent to mention here that at pages 1 and 2 of the assessment order, the learned Assessing Officer has specifically mentioned that the assessee attended the proceedings from time to time and furnished desired information and the same were kept on record after ..... X X X X Extracts X X X X X X X X Extracts X X X X
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