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TMI Blog2010 (5) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... ion contract work and labour contract. The assessee has filed its return of income declaring an income of ₹ 14,29,579/-. The assessee's case was selected for scrutiny by issuing notice u/s 143(2) of the Act. During the course of assessment proceedings, it was noticed by the AO that the assessee has debited labour charges in the P&L account to the extent of ₹ 1.10 crores and in the balance sheet out of the said expenditure a sum of ₹ 54,56,235/- had been shown as outstanding. The AO has also observed that the outstanding labour/wage payment was pertaining to the month of Jan, Feb and March 2005. The AO issued show cause notice to the assessee in respect of the outstanding labour charges/wages shown as on 31.3.2005 as to why ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure which normally cannot be postponed by any assessee without making payment as they related daily earning casual labour/wage earners. In respect of this expenditure normally assessee has no way out to postpone meeting of such expenditure as daily bread and butter of the said labourers who come to the work entirely depend on this payment. v) Though assessee has come up with the financial crunch on account of various accounts the same cannot be an excuse for not meeting the labour wages payment. vi) Even going as per the principal only the wages payment for the last month of March, 2005 can be maximum outstanding and as per the details filed the same amount shown only ₹ 7,24,514/-. vi) Assessee stated that the payment hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es only in the month of Jan and Feb 2005 and made the issue for the two months outstanding. The ld counsel of the assessee also filed a copy of the assessment order for AY 2006-07 and submitted that the AO himself has accepted the payment made in that year. The ld counsel also relied the precedent in the case of ITO vs Hylam Securities & Finance P Ltd (178 Taxman 317). 3.1 Per contra, the ld DR supported the orders of the authorities below. It is argued that no worker will survive without the wages. He further argued that the story of the assessee is that the assessee made arragenement for daily needs of the labourers is not believable as it is an afterthought. The ld DR pleaded that the orders of the authorities may be confirmed. 4 Now, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een accepted by the AO in next year; hence, in our opinion no addition can be made u/s 69C of the Act. Apart from that it is seen that it is also not case that the expenditure is bogus or non genuine and the AO has also not examined any of the labourers to support his case and made the high pitch addition. Merely because the labour charges are shown as outstanding that cannot be the ground to make the addition u/s 69C and there is no justification for the same. We have no other option but to delete the same and accordingly do so. 6 Regarding the remaining grounds, the ld counsel of the assessee submitted that considering the smallness of the amount and as per the instructions of the assessee, he is not pressing the grounds and therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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