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TMI Blog2018 (10) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... /- is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld CIT(A) has grievously erred in law and on facts in not considering fully and properly the explanation furnished and the evidence produced by the appellant. 2.1The ''Ld.CIT(A) has grievously erred in law or on facts in confirming the disallowance of following expenses. (i) Labour exp. of Yogesh Shah Rs.25,66,963 (ii) Out of Diesel Exp. Rs.3,61,080 (iii) Disallowance u/s 40A(3) Rs.25,000 2.2 That in the facts and circumstances of the case as well in as in law, the ''Ld.CIT(A) has grievously erred in confirming the disallowance of the aforesaid expenses. 3.1 The ld.CIT(A) has grievously erred in confirming that the labour expenses paid to Shri Yogesh Shah were not genuine. 4.1 The observation made and conclusion reach by CIT(A) for the purpose of confirming the disallowance of above exps. Are not admitted by the appellant and the same are presumption. 5.1 Without prejudice to the above and in the alternative, the disallowance of expense of labour and diesel made by AO was highly excessive and called for substantial reduction. It is therefore prayed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and labour expenses paid to him are representing the bogus expenses. Accordingly, the same was disallowed and added to the total income of the assessee. 7. Aggrieved, assessee preferred an appeal to Ld CIT(A). The assessee before the Ld CIT(A) submitted that the payment was made through banking channel to Shri Yogesh R. Shah for the labour charges. 7.1 The payment was made to Shri Yogesh R. Shah after deducting the TDS which was claimed by him in his income tax return. The copy of PAN of Shri Yogesh R. Shah was duly furnished to the AO during the assessment proceedings. 7.2 Shri Yogesh R. Shah has presently appeared before the AO for the purpose of confirming the transaction with the assessee. The AO has not pointed out any defect in the confirmation filed by Shri Yogesh R. Shah. 7.3 The AO has not disputed the services rendered by Shri Yogesh R. Shah. 7.4 The single payment was also made to Shri Yogesh R. Shah in the earlier year and no disallowance was made on account of such labour expenses. 7.5 There was no evidence available with the AO suggesting that the money paid by the assessee to Shri Yogesh R. Shah has come back to the assessee. The assessee was the intr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me not chargeable to tax or near to same. So by debiting the expenditure in the hands of the appellant and by showing a little income in the hands of Shri Yogesh R. Shah there is clearly avoidance of taxes in the hands of the appellant. It was claimed that Shri Yogesh Shah was produced for interrogation before the AO but during inquiry and verification what has transpired about the genuineness of the claim was not explained by the appellant. Further it is a settled legal position that the principle of res-judicata does not apply in I.T. proceedings hence merely the similar payments have been made to Shah in the past does not give the reason to accept the similar claim in the year under consideration. No details about the scrutiny assessment of those preceding years are available. Hence no positive findings can be given on the contentions of the appellant. 4.5. In the written submission, the appellant has mentioned as under:- "The labourers had to be taken there and looked after being illiterate. Therefore, Shri Yogesh Shah being a trusted person was appointed to look after this work." Here also it is apparent that Shri Shah was appointed to look after the work as a supervis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are not inclined to uphold the order of authorities below. Hence, we reverse the same. Thus, the ground of appeal filed by the assessee is allowed. 10. The next issue raised by the assessee in this appeal is that ld CIT(A) erred in confirming the order of AO by confirming the disallowance of Rs. 3,61,080/- on account of diesel expenses. The AO during the assessment proceedings observed that the assessee has claimed more diesel expenses in the month of February and March, 2010. The necessary details of the diesel expenses stands as under: Month Amount in Rs. Purchase From November 134308 Acharya Auto Centre December 96928 Acharya Auto Centre January 0 - February 325064 Jalaram Petroleum March 521390 Acharya Auto Centre 361080 Jalaram Petroleum 44000 Jalaram Petroleum Total 14,78,616 11.1 As per the AO, the diesel Expenses have not been incurred uniformly over the year. On question by the AO, the assessee submitted that the work was carried out at the Indo-Pak border after the summer season mostly in the month of February and March. Therefore the consumption of diesel expense was higher. 11.2 However, the AO disbelieved the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumed the balance stock should have been shown as closing stock but in absence of such closing stock it is implied that the expenditure claimed is not genuine and in more particularly no details of consumption of diesel, the claim of the appellant is not verifiable and hence disallowance made by the A.O. is confirmed and the ground of the appellant is dismissed." 12.3 Being aggrieved by the order of ld CIT(A) assessee is in second appeal before us. The ld AR before us reiterated the submissions as made before the Ld CIT(A). On the other hand, ld DR vehemently supported the order of authorities below. 13. We have heard the rival contentions and perused the materials available on record. In the instant case, the diesel expenses were disallowed by the AO by observing that these expenses were not incurred uniformly throughout the year. As per the AO, these expenses were incurred more in the month of February and March. Therefore, the same cannot be allowed. The view taken by the AO was subsequently confirmed by the ld CIT(A). 13.1 From the preceding discussion, we find that the assessee has furnished all the necessary details in support of diesel expenses and no defect of whatsoev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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