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TMI Blog2017 (5) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... arding the supporting MOU's and other documents on record and the fact that the payments have been made by account payee cheques and statutory TDS having been deducted. The addition thus sustained is illegal, invalid and deserves to be deleted according to law. 2. The Hon'ble CIT(A) grossly erred in holding that the appellant has failed to demonstrate the nature of job work undertaken for which payment has been made ignoring the MOU which elaborately explained the nature and scope of work making the addition bad in law and liable to be deleted. 3. The Hon'ble CIT(A) further erred in sustaining the addition on account of job work charges relying on the fact that the name of one of the entity to whom job work charges have been paid was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 234B and 234C of the Income Tax Act, 1961. Without prejudice the levy of interest is unjustified, unwarranted and excessive. 2. First issue of disallowance of Rs. 20,29,338/- - Job work charges paid. Brief facts of the case are as under : The appellant is an individual, engaged in the business of marketing and servicing of Industrial Products under the name and style of M/s S.R.S. Engineers. The appellant during the year has claimed the job work charges of Rs. 29.14 Lakhs out of which the job work charges to the tune of Rs. 20,29,338/- are claimed to have been paid to four entities as under : (i) M/s R J Metal Industries Rs. 4,85,859/- (ii) M/s Reliable Metal Works Rs. 5,46,788/- (iii) M/s Rajlakshmi Corporation Rs. 4,97, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the party to the assessee. The AO in Para 6 of the assessment order has recorded a finding that the assessee neither produced any bills nor any confirmation from the said party, M/s R J Metals. The assessee, however, submitted a copy of Bank Certificate giving details of payments made to the said four concerns along with the MOU signed with Shri Ashwin Kumar Dikole, 108, Adeshwar Dadi Street, Girgaum, Mumbai. The MOU is regarding providing trained man-power along with qualified engineers for technical support for Power Stations in Chattisgarh, West Bengal, Orissa, Sarni & Birsinghpur. The AO, thus, noticed that no other evidence or correspondence regarding the work done or technical support provided by Shri Ashwin Kumar Dikole was filed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 20,29,388/- is upheld. This ground is dismissed." 6. Against the above order the assessee is in appeal before us. 7. We have heard both the counsel and perused the records. We find that adverse inference in this case has been drawn by the authorities below on the ground that letters issued u/s 133(6) to the concerned parties have returned unserved. That same person was carrying on the work in the name of four different firms. One firm and the propitiator were appearing in the list of suspicious dealers of the Sales Tax Department. The evidence submitted regarding the work done has been rejected by the AO holding that the same was a simple letter and also that the assessee failed to present Shri Ashwin Kumar Dikole or submit his c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses is not sustainable. Even the AO in his concluding remark has held that the job work charges does not appear to be wholly and exclusively for the purpose of business. Hence the addition is fully based upon surmises and conjecture. Hence we set aside the orders of authorities below and delete the addition. 9. Addition of Rs. 2,24,398/- being 10% of administrative expenses: On this issue the AO made the addition by observing that during the year the assessee has claimed administrative expenses of Rs. 22,43,983/- for the three offices located at Bhopal, Jabalpur & Korba. It is seen that majority of these expenses are in cash and the assessee could only produce self made vouchers. Looking into facts and circumstances of the case, 10% of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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