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TMI Blog2022 (11) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... is also evident that the AO has also not cross verified the details of TDS amount furnished by the assessee from the record available with the Department. Once the PAN of the parties to whom sub-contract amount has been paid was available with the AO, all the basic details as sought from the assessee could have been easily traceable from the data available with the Department. However, no such efforts by the AO are evident from record. Therefore, in view of the above, we find no merits in sustaining the addition of even 10% of sub-contract expenses claimed by the assessee. Accordingly, we direct the AO to delete the impugned addition of 10% of sub-contract expenses claimed by the assessee. As a result, ground No. 2 raised in assessee s appeal is allowed. - ITA No.1973/Mum./2022 - - - Dated:- 12-10-2022 - Shri S. Rifaur Rahman, Vice President And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri J.P. Bairagra For the Revenue : Shri Manoj Sinha ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned order dated 14/06/2022, passed under section 250 of the Income Tax Act, 1961 ( th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ongwith Daily Labor Register, site address etc have not been submitted. In the absence of all these details, it is not possible for the AO to cross-examine the claim of labour charges of the assessee. Assessee's explanation is not supported by proper evidences. Further, as discussed above, the labour charges claim is not found to be verifiable in the absence of proper details etc as discussed in above Para. Therefore, considering the nature of business, quantum of labour expenses in cash and non submission, non compliance at various occasions, 10% of the labour charges paid in cash is disallowed and added to the total income of the assessee. Disallowance and addition on this account comes to Rs. 12,47,574/-. Penalty proceedings u/s. 270A of the Act are initiated separately. 5. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue, by observing as under: 10. In the facts and circumstances, I do not find the contention of the appellant genuine and bonafide. The appellant claimed labour expenses to the tune of Rs.1,24,75,743/- which is huge amount. Any business entity whose sole purpose is profit driven and doing business at a la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book from page No. 43 47. Apart from these details, no other information in the nature of daily labour register, vouchers, details regarding duration of project etc. is brought on record. There is also no mention of the site at which each of these labours have worked for the assessee, during the year under consideration, for which charges in cash was paid by the assessee. We find that in assessment year 2015 16, the AO vide order dated 22/12/2017 passed under section 143 (3) of the Act disallowed 10% of labour charges incurred by the assessee in cash. In further appeal, learned CIT(A) vide order dated 13/05/2019 granted partial relief to the assessee and restricted the disallowance to 5% of labour charges incurred in cash. During the course of hearing, it was agreed by both the sides that no further appeal has been preferred against the aforesaid order of learned CIT(A) and the disallowance at 5% of labour charges has been accepted. Since, in the present case neither assessee could provide complete details in support of its claim nor Revenue treated the entire payment to be bogus, therefore, we deem it appropriate to restrict the disallowance of labour charges paid in cash to 5% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese circumstances and lack of evidence, genuineness of the transactions could not be verified. Regarding the fact that similar issue was accepted in earlier years, reliance is placed on Hon'ble Supreme Court's decision in the case of Instalment Supply (Pvt.) Ltd. Radhasoami Satsang Vyas, wherein it has been held that each assessment year is a separate unit. Decision in one year may not carry forward and hold for a subsequent year, thus the appellant's plea is not accepted. Further, in the case of CIT vs. SPL Infrastructure Pvt. Ltd. (Hon'ble Madras High Court) TCA No. 766 of 2017 dated 07.08.2020, 10% disallowance of expenditure towards sub-contract for want of proper bills restricted by the Ld. CIT(A), as against 100% disallowance made by the AO, was held justified. Therefore, considering the nature of business and the huge amount of expenditure claimed in crores of rupees, I do not find the contention of the appellant bonafide. It is held that the AO has reasonably made the addition of Rs.79,48,296/- Therefore, Ground of appeal No. 2 of the appellant is dismissed. Being aggrieved, the assessee is in appeal before us. 13. During the course of hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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