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TMI Blog2014 (6) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... ,566/- made by the Assessing Officer. 4. In the cross-objection, the grievance of the assessee is that the CIT(A) erred in confirming Rs 3,00,000/- from out of the disallowance of 25% of labour wage expenses and 20% other direct expenses listed by the Assessing Officer. 5. The brief facts of the case are that the Assessing Officer observed that the assessee has debited following expenses in his account maintained for Surat: i) Labour supply expenses Rs 41,85,939/- ii) Labour wages expenses Rs 68,75,038/- Rs 1,10,60,977/- iii) Fabrication labour exp. Rs 89,066/- iv) Transportation expenses Rs 21,93,410/- v) Tractor rent Rs 6,62,127/- vi) Miscellaneous expenses Rs 97,005/- Rs 30,41,608/- 6. The Assessing Officer issued show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f rendering of services, nature of work done and has not been able to establish the total volume of work done in terms of cubic metres of earth moved. According to him, the assessee should have produced certificates from engineers overseeing the work regarding quantum of work done. The Assessing Officer was of the view that the assessee had not been able to establish which particular expenses had been incurred for what purposes. He, therefore, held that the books of account were incorrect and incomplete and the correct profit had not been offered to tax. Accordingly, he rejected the books of account and disallowed 25% labour expenses, 20% other expenses and made addition of Rs 33,73,566/-. 8. On appeal, the CIT(A) restricted the disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be reasonable if a disallowance of Rs. 3,00,000/- is made out of claim of labour charges and other expenses. The A.O. is directed to restrict the disallowance to Rs.3,00,000/- only." 9. We have heard the rival submissions, perused the orders of lower authorities and material available on record. In the instant case, the Assessing Officer disallowed 25% out of total labour expenses of Rs 1,10,60,977/- amounting to Rs 27,65,244/- and 20% out of the total other expenses of Rs 30,41,608/- which worked out to Rs 6,08,321/-. In this way, he made total disallowance of Rs 33,73,566/- on the ground that assessee could not furnish any documentary evidence for rendering of services, nature of work done and could not establish the total volume of work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be justified and therefore, it would be reasonable if disallowance of Rs 3,00,000/- was made out of the claim of labour charges and other expenses. 10. The AR of the assessee submitted that similar disallowance of expenses was deleted by the Tribunal in the subsequent Assessment Year 2008-09. Therefore, she contended that the issue involved in the present appeal is squarely covered by the decision of the Tribunal in the case of the assessee itself passed in Assessment Year 2008-09 in ITA No. 2897/Ahd/2011 and CO No. 270/Ahd/2011 order dated 31.08.2011 and in view thereof the entire addition including Rs 3,00,000/- confirmed by the CIT(A) is liable to be deleted. The DR also conceded before us that the issue is squarely covered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the case. It is seen that notices issued by the A.O. had been served on the concerned parties. This establishes the identity of the parties. The appellant had produced the ledger accounts, bills and payment details before the A.O. which establish the genuineness of the transactions. In my opinion, the appellant cannot be held responsible for non-receipt of replies especially when he has provided all related evidences. In any case confirmation was received, though belated, and a copy has been submitted which takes care of the reason for disallowance. The addition made is therefore deleted. This ground of the appellant is allowed." 14. The DR supported the order of the Assessing Officer whereas the AR of the assessee relied on the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove facts it can not be inferred that the purchases were bogus. We, therefore, confirm the order of the CIT(A) and dismiss the ground of appeal of the Revenue. 16. Ground no. 3 and 4 of the Revenue's appeal are directed against the order of the CIT(A) restricting the disallowance to Rs 8,367/- on account of business expenses in place of Rs 16,735/- made by the Assessing Officer and restricting the disallowance to Rs 18,426/- on account of telephone and vehicle expenses instead of Rs 36,851/- made by the Assessing Officer. 17. Ground no. 2 of the cross-objection of the assessee is directed against the order of the CIT(A) confirming 10% disallowance out of the business expenses and telephone and vehicle expenses. 18. We have heard the riv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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