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TMI Blog2015 (9) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to disallow at 20% of the expenditure on estimate basis. In our considered view, if the payment is bogus, it would be 100%. The ld.CIT(A) has given his finding on the fact that the PAN furnished during the appellate proceedings was found to be correct. Under these facts, we do not see any reason to interfere with the order of the ld.CIT(A) since the Revenue has not placed any contrary material on record - Decided against revenue. Admission of additional evidences in violation of Rules 46A of the IT Rules, 1962 - Held that:- AO has noted that assessee furnished some contra entries. Therefore, it is not the case where the assessee had not taken a stand before the AO and relied upon the evidences. Under these facts, we do not see any merit into the ground raised by the Revenue and the same is rejected. -Decided against revenue. Rejection of Books of Account - Held that:- CIT(A) has not decided the ground while passing appellate order. The ld.CIT(A) has held that the ground would be covered in subsequent grounds while deciding the merits of the addition because of the appellant stated that the book results were rejected. Under these facts, we are of the considered view that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income-tax (Appeals)-XV, Ahmedabad has erred in law and on facts in admitting additional evidences in violation of Rule 46A. 4) On the facts and in the circumstances of the case, the Ld.Commissioner of Income-Tax (Appeals)-XV, Ahmedabad ought to have upheld the order of the Assessing Officer. 5) It is therefore, prayed that the order of the Ld.Commissioner of Income-Tax (Appeals)-XV, Ahmedabad may be set-aside and that of the Assessing Officer be restored. 2.1. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as the Act ) was framed vide order dated 27/12/2010, thereby the Assessing Officer (AO in short) made addition on accou8nt of difference in gross receipts of ₹ 37,12,662/-, disallowance of labour payments of ₹ 11,50,254/- and ₹ 15,52,560/- respectively and disallowance of machine repair of ₹ 5,000/- and disallowance of supervision charge of ₹ 20,000/-. Against the said assessment order, the assessee preferred an appeal before the ld.CIT(A), who after considering the submissions of the assessee, part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant it furnished a certificate from Ankur Textiles dated 30.06.2011 in which Ankur Textiles confirmed that gross receipts of ₹ 1,80,14,905 were credited to the account of the appellant which included service tax and actual payments of ₹ 1,78,71,253 were made to the appellant. Ankur Textiles has also stated that contra entries were passed, which in the annexures enclosed with the letter of Ankur Textiles are reflected at ₹ 28,87,363. This letter is enclosed as Annexure-1 of this order. This letter was admitted as additional evidence and was sent to the AO for counter comments, however the AO in response stuck to his stand that the certificate now produced should not be accepted. After going through rival submissions it is seen that gross receipts credited to the appellant as per certificate of Ankur Textiles come to ₹ 1,80,14,905 whereas the appellant is showing ₹ 1,70,45,954, difference of ₹ 9,68,951 is not satisfactorily explained therefore the addition is retricted to ₹ 9,68,951 (Rs.1,80,14,905 ₹ 1,70,45,954). 4.1. During the appellate proceedings, the assessee filed a letter from M/s. Ankur Textiles dated 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrary material suggesting that the letter of M/s. Ankur Textiles is fake and over the contents of the same are contrary to the material available on record. In the absence of such finding by the AO, we do not see any reason to interfere with the order of the ld.CIT(A), same is hereby upheld. Thus, this ground of Revenue s appeal is rejected. 5. Ground No.2 of Revenue s appeal is against deletion of disallowance of ₹ 15,52,560/- made by the AO on account of bogus labour payments. The ld.Sr.DR submitted that the ld.CIT(A) was not justified in deleting the addition. He placed reliance on the order of the AO. 5.1. On the contrary, the ld.counsel for the assessee supported the order of the ld.CIT(A) and submitted that all details in respect of labour payments were submitted before the authorities below. He submitted that the AO without considering the submissions of the assessee proceeded to make disallowance of the payments and adding the same to the total income of the assessee. 6. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has given a finding on fact by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no violation of Rules 46A. 8. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the AO has noted that assessee furnished some contra entries. Therefore, it is not the case where the assessee had not taken a stand before the AO and relied upon the evidences. Under these facts, we do not see any merit into the ground raised by the Revenue and the same is rejected. 9. Ground Nos. 3 4 are general in nature which require no independent adjudication. 10. As a result, Revenue s appeal is dismissed. 11. Now, we take up the assessee s appeal in ITA No.2490/Ahd/2011, for AY 2008-09, wherein the following grounds have been raised:- 1. Rejection of Books of Account : 1.1. The learned CIT(A) has erred in law and on facts in upholding the rejection of audited books of accounts by invoking provisions of section 145(3) of the Income tax Act, 1961. 1.2. The learned CIT(A) has erred in not appreciating the fact that in absence of any fault with books of accounts or the method of accounting regularly employed by the assessee, the accounts cannot be held to be defecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e adhoc disallowance of ₹ 20000/- out of Supervision charges. The learned CIT(A) overlooked the fact that the appellant has already furnished the proofs of the expenses in the paperbook. PRAYER The Appellant respectfully prays that: 1. The books of accounts be accepted. 2. The addition of ₹ 968951/- as unaccounted work receipt of Ankur Textiles be deleted. 3. The addition of ₹ 1150254/- as bogus labour payments be deleted. 4. The adhoc disallowance of ₹ 5000/- out of Machine Repairs be deleted. 5. The adhoc disallowance of ₹ 20000/- out of Supervision Charges be deleted. 6. Such and further relief which the appellant is entitled as the nature and circumstances of the case may require. 11.1. Ground No.1.1 1.2 of assessee s appeal are against in respect of rejection of books of accounts. We find that before the ld.CIT(A) following ground was raised by the assessee:- 1. LEGAL GROUNDS : 1.1. The learned A.O. erred in law and on facts in rejecting book result of the appellant without rejecting books of accounts as there is no single defect in the books of account. As a result the additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and confirming the same. 14. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The AO has given specific discrepancy in paras-3.7.1 to 3.7.4 of his order. The contention of the assessee is that the accounts are fully audited, bills/vouchers are certified by the site engineers/supervisor. Merely because the lavourers were not having PANs cannot be the reason for making disallowance. The contentions made before the ld.CIT(A) were reiterated before this Tribunal as well. The gist of the contentions of the assessee are as under:- Submissions: 3.1 With a view to verify the labour payments the learned A.O. called upon the appellant to furnish complete details of the labour payments which were examined with the Cash book, Bank book, Labour vouchers and Bank statements. 3.2 While examining the labour vouchers the learned A.O. observed that in some of the cases where payments are made by bearer cheques there is no PAN or address of the labourer. The learned A.O. therefore obtained photocopies of seven vouchers of labour payments (Five Labourers) and further obtained certified photo copies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: Annexure-3 Payment through account payee cheques ₹ 643736 Payment through bearer cheque 673425 Payment through self cheque 31807 705232 Net payment 1348967 TDS 15858 Gross payment 1364825 Kindly refer page nos. 90 to 94. Annexure-4 Correct Total 1122579 Payment with PAN 3025 Payment through a/c. payee cheques 655557 Payment though bearer cheques 447442 Payment through self cheques 16555 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L) 3.11 It is respectfully submitted that the Id. A.O. has grossly erred in making such adhoc disallowance simply on the assumption that the labour payments to labourers having no PAN are unverifiable and therefore definitely bogus. The impugned addition should therefore be deleted. 14.1. We find that the ld.CIT(A) has decided this issue as under:- 5. Ground No.3 is that the ld. AO erred in making the addition of ₹ 11,50,254 as alleged bogus labour payments. The addition has been made as per para 3.7.3 of the assessment order. The AO has stated that the list furnished in support of labour payment with no PAN shows that cash had been withdrawn by persons other than the persons in whose name expenses had been debited. The AO has stated in para 3.7.2 that the existence of labour Rameshbhai Rupabhai, Dilipbhai Devjibhai and Laxmanbhai Bhurabhai could not be proved by the assessee. It is seen that cash payments to labour totalling to ₹ 11,50,254 have not been disputed by the appellant, though it was stated that all payments were genuine but the objections of the AO summarized above could not be answered even during the appellate proceedings. The ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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