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TMI Blog2023 (9) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... against the total expenditure of Rs. 62,84,30,804/- claimed, i.e., 89% of the total expenditure. The assessee also submitted the ledger accounts and even copies of sample invoices during the course of DRP proceedings. ITAT took a considered view that when assessee has, in compliance with the directions of the AO, placed on record substantial material that is complete party-wise details of purchases and labour expenses exceeding Rs. 10 Lakhs amounting to a total of Rs. 55 Crores approximately, which worked out to about 89% of the total expenses and also furnished copies of invoices of Rs. 82,22,049/- for verification on sample basis, the AO was not correct in disallowing an ad hoc 10% of the expenses.ITAT held that the assessee having sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Services segment. 4. For the AY 2008-09 assessee had shown income of Rs. 73,79,40,723/- from Global Works Space Solutions (GWSS). Against this income assessee claimed an expenditure of Rs. 62,84,30,804/- being purchase of materials at Rs. 4,26,62,644/- and Labour and Sub-contractor s expenses at Rs. 58,57,68,160/-. 5 The AO issued notices under Section 133(6) of the Income Tax Act, 1961 ( the Act ) to some of the parties from the party-wise details that assessee submitted. In some cases the noticee responded. To the extent of those who did not respond assessee was called upon to show cause as to why transactions with those parties should not be treated as non-genuine and the expenditure incurred on those parties may not be added t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer had examined the issue minutely by issues of notices u/s. 133(6) of the Income Tax Act, 1961 whereby only few replies were received and the onus of proving genuineness and veracity of the transactions lies upon the assessee, which it failed to do so? 6.2 Whether on the facts and circumstances of the case and in Law, the Hon'ble ITAT is justified in deleting the addition in respect of disallowance of expenditure of Rs. 6,28,43,080/- being 10% of expenses in relation to facilities management, ignoring the fact that on similar issue Hon'ble ITAT had sustained the addition made by the Assessing Officer in A.Y. 2007-08? 6.3 Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT is justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pies of invoices of Rs. 82,22,049/- for verification on sample basis, the AO was not correct in disallowing an ad hoc 10% of the expenses. The ITAT held that the assessee having substantiated almost 89% of the expenses claimed, in view of the large transactions involved, the AO was not justified in making a disallowance. 8. There is also nothing to indicate in the assessment order that the AO also made any efforts to investigate the matter further if he had certain doubts or reservations as regard genuineness of the expenditure. The least the AO should have done is to verify those expenses on his own after clearly recording his reasons for so doing. None of that has been done. 9. In the circumstances, we do not find any infirmities in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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