2015 (12) TMI 29

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..... the Hon'ble High Court has held that where the profit of the assessee is determined on percentage basis also, deductions like depreciation is allowable. Assessee is also aggrieved by the order of the Ld. CIT(A) in confirming the disallowance made by the A.O. under section 40(a)(ia) of the Act on the ground that the assessee has not filed any bills and vouchers and hence, not allowable under section 37 as well. 3. The brief facts of the case are that the assessee company which is engaged in execution of civil contract works, filed its e-return of income on 31.10.1997 declaring an income of Rs. 8,54,504. During the assessment proceedings under section 143(3) of the I.T. Act, the A.O., on verification of the ledger extracts produced by the a .....

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..... orked out to 8.4% which is fair and reasonable and therefore, keeping in view the low margin of the profit shown by the assessee, he held that the disallowance of expenditure on account of assessee's failure to prove the expenditure incurred, by producing the relevant bills/vouchers, is justified. 3.2. Without prejudice to the above, the A.O. also disallowed the said expenditure under section 40(a)(ia) of the Act on the ground that the assessee has not produced the evidence of payments to labourers as per the Muster. Further, he held that the ledger account extract shows that each payment debited exceeded to Rs. 20,000 per day and therefore, in view of that payment, he held that it is to be made through cheque. He therefore, held that the .....

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..... s not made TDS before making such payments under section 194(2) of the Act and hence has to be disallowed u/s.40(a)(ia) of the Act. The A.O. has justified the disallowance by observing that after the disallowance of the said expenditure, the gross profit of the assessee would come to 8.4% which is nearer to 8% directed to be adopted by the Tribunal in assessee's own case for the earlier assessment year. While making the disallowance of the expenditure, the A.O. has not allowed the claim of depreciation to the assessee. The Ld. CIT(A) also did not allow the claim of depreciation to the assessee. The decision of the Hon'ble High Court of A.P. in the case of the assessee for the earlier assessment year (relied upon by the assessee) is to the e .....

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