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TMI Blog2012 (10) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case and in law, the Ld. CIT(A) erred in deleting addition of ₹ 75,000/- made by the Assessing Officer in respect of cash received us/. 68 of the Act. 2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting addition of ₹ 29,19,323/- made by the Assessing Officer in respect of Bogus purchase u/s.41(1) of the Act. 3) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting addition of ₹ 16,55,246/- made by the Assessing Officer in respect of labour wages u/s. 37 of the Act. 3. Briefly stated facts are that case of assessee was taken up for scrutiny assessment and the assessment u/s. 143(3) of the Income-tax Act, 1961 (h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ni. He submitted that it was contended before Ld. CIT(A) by the assessee that the cash was received out of business expediency as Mr. Dharmesh H Sudhani was living side of the assessee-company and this fact was not submitted before the Assessing Officer. 7. Having heard the Ld. DR and perused the material available on record we find that Ld. CIT(A) has deleted the disallowance on the ground that the payment of ₹ 75,000/- is duly reflected in the earlier year and the assessee would not have waited till the receipt of cheque from the Mr. Dharmesh H Sudani. Ld. CIT(A) has observed that the case of the assessee fall under the exceptional circumstances and therefore under the relax terms of provisions of u/s 68 of the Act this receipt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed by the assessee. He submitted in the absence of contra confirmation from the above and proof of services rendered by them from the parties concerned and proof of serviced rendered by them the amount of ₹ 29,19,323/- debited by the assessee was treated as bogus expenditure on account of purchase and disallowed and non-business expenditure. The amount is further disallowed u/s. 41(1) of the Act as cessation of liability. 9. Having heard the Ld. DR and perused the materials available on record we find that Ld. CIT(A) has observed that assessee has bills and evidences of purchase of material and sub-contract work done, payment has been made by account payee cheque addition after deducting tax deducted at sources. These evidences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced that the assessee has discharged the onus and we do not find any infirmity into the order passed by Ld. CIT(A) as he has examined all aspects of the matter, the AO at one hand treated increases as a trade liability which became liable for tax after cessation of those liabilities. Both bogus purchases and cessation of liability are different altogether. In the case of cessation of liability, the liability does not remain to be paid at a later date but in the case of bogus purchase, the purchases are never made and the assessee furnishes unverifiable evidence of such purchases. In the case in hand, the assessee has paid by account payee cheque and TDS is also deducted on such payment this fact is not controverted by Revenue. Moreover, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not hold much water. Ld. CIT(A) restricted the disallowance from 20% to 5%. The fact that the books of account are duly audited and AO has not rejected the books is not controverted by the Revenue. The AO in his order, has observed that on careful perusal of reply submitted by the assessee it is found that assessee has paid labour wages of ₹ 82,76,231/- but the assessee has not maintained any vouchers for the labour payment and assessee has not produced details of identification and in the absence of details of basis of payment and work done by the labour is not verifiable. Thus, the verification of the labour wages is not just under the circumstances and also keeping natural justice in mind, the AO disallowed 20% of labour wages ..... X X X X Extracts X X X X X X X X Extracts X X X X
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