9911796707
TMI Blog2014 (1) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer - the assessee has not been able to substantiate its claim in its entirety along with necessary evidence before the Assessing Officer or before the CIT(A) - the activity involves engagement of large number of both skilled and unskilled labour and that the assessee may not be able to get independent evidence/vouchers in respect of engagement of unskilled labour – Thus, the disallowance of labour charges restricted to 10% of the total labour expenses claimed by the assessee. Disallowance of cost of materials – Disallowance u/s 40(a)(ia) of the Act - Held that:- There may be certain miscellaneous items, for which the assessee may not be able to obtain the bills or vouchers while it also cannot be ruled out that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ister and requested the Assessing Officer to complete the assessment on the basis of his submissions. The Assessing Officer observed that out of the total expenses of Rs.1,33,57,000/- towards the cost of material the assessee has produced proof of cost of materials to the extent of Rs.1.01 crore only while no evidence is produced with regard to the expenses of Rs.32.57 lakhs. With regard to the claim of labour expenses, he found that the assessee has produced the self-made vouchers. Regarding the machinery hire charges and vehicle hire charges no details have been produced. Considering that the assessee is in the business of event management and that there may be some emergency expenditure for which the assessee could not have procured the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estricted the disallowance to 25% of the claim and as regards the disallowance of machinery hire charges and vehicle hire charges under section 40(a)(ia) of the Income Tax Act, she directed the Assessing Officer to verify the assessee s claim that none of the payments exceeded Rs.20,000/- singularly and that in no case the payment exceeded Rs.50,000/- to the same person in the year and if it is found to be true, the same may be allowed to that extent. Against the relief given by the CIT(A) with regard to labour charges, the Revenue is in appeal before us and against the confirmation of the additions on account of cost of material and the direction of CIT(A) with regard to disallowance under section 40(a)(ia), the assessee is in appeal befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excessive. As regards the direction of the CIT(A) to the Assessing Officer to verify the claim of the assessee under section 40(a)(ia) is concerned, he submitted that the CIT(A) has no power to give such a direction to the Assessing Officer. 4. The learned D.R. on the other hand, supported the Orders of the authorities below and submitted that though the assessee has not substantiated its claim of labour charges, the CIT(A) has erred in restricting the claim to 25% of the same and thus, disallowance made by the Assessing Officer should be confirmed. 5. Having heard both the parties and having considered their rival contentions and the material on record, we find that the assessee s turnover is more than statutory limit which necessitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o cannot be ruled out that the assessee might have inflated the expenses. We, therefore, are of the opinion that some disallowance is justified but disallowance of 50% of the expenses is excessive and restrict the disallowance to 15% of the unsubstantiated cost of materials. 7. As regards the CIT(A) s direction to the Assessing Officer to verify the assessee s claim of machinery and vehicles hire charges, we observe that the CIT(A) has no power to remand the issue to the Assessing Officer for verification. She should have called for a remand report from the Assessing Officer and adjudicated the issue herself. However, there is no such restriction as far as this power of this Tribunal is concerned. As necessary details are not before us an ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
