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2022 (6) TMI 1108 - ITAT AHMEDABADDisallowance of labour expenses - disallowance on account of cash payments towards land development agreement - HELD THAT:- As discrepancies pointed out by the AO while disallowing the claim of the assessee for labour charges paid to the said two contractors were also explained and clarified by the assessee during the course of remand proceedings and the same was apparently accepted even by the learned AO - The details of work executed by the said contractors for the assessee were also duly supported by the copies of bills and certificates issued by Engineer Geometric Consultant. CIT(A) found that the onus that lay on the assessee was satisfactorily discharged by him by filing all possible details including confirmations/affidavits and TDS; and, the business expediency as well as genuineness of the labour expenses was successfully established by the assessee. At the time of hearing before us, the learned DR has not been able to dispute this finding of fact specifically recorded by the learned CIT(A) on the basis of details and documents furnished by the assessee to give relief to the assessee by deleting the disallowance made by the AO on account of labour expenses. We, therefore, find no justifiable reason to interfere with the impugned order of CIT(A) giving relief to the assessee on this issue and upholding the same, we dismiss Ground No. 1 of the Revenue’s appeal. Liability accrued under development agreement was not provided for by the assessee in the books of account - HELD THAT:- As noted by the CIT(A) in his impugned order on the basis of the relevant clause 3.4 of the Development Agreement, there was an understanding between both the parties that the land would finally be transferred to the prospective buyers of the bungalows in the scheme directly and because of this understanding the liability was not provided for in the books of accounts of the assessee. In any case, as rightly observed by the CIT(A) in his impugned order, there was no question of any loss to the Revenue by this accounting treatment given by the assessee because had the liability been provided in the books of accounts of the assessee, the profit declared by the assessee would have decreased to that extent. As rightly concluded by the learned CIT(A), it was thus not a case of any postponement of tax liability by the assessee but was a case of preponement of tax liability. Keeping in view all these facts of the case, we are of the view that the addition made by the Assessing Officer on this issue was rightly deleted by the learned CIT(A) vide his impugned order and upholding the same, we dismiss Ground No.2 of the Revenue’s appeal.
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