TMI Blog2016 (12) TMI 1803X X X X Extracts X X X X X X X X Extracts X X X X ..... r Hydra Machine at Barauni site - CIT (A) has deleted the disallowance made stating that the party to whom the payments was made not a related party and there was nothing on record to show that the part of the payment had been received back by the assessee - HELD THAT:- Disallowance made by the assessing officer in respect of hiring of crane payment to M/s Upendra Prasad Singh Hitech Construction Pvt. Ltd, in this connection we noticed that this disallowance was not based on cogent or justifiable reasons. We find that the hiring charges paid was not related to the persons covered under section 40A(2)(b) of the act and the assessing officer had made this disallowance on estimated basis without any supporting evidences to prove that the same was excessive and unreasonable. Considering the above facts and findings, we are not inclined to interfere in the findings of the Ld. Commissioner of Income Tax(A). - Decided against revenue. Disallowance u/s. 43B of service tax payable - HELD THAT:- Out of total service tax liability of ₹ 22,07,221/- only amount of ₹ 18,25,992/- service tax was paid on 5th July, 2008 and there was remark in the audit report that the sum for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wages. The assessing officer stated that 60% of the wages in the category of daily payment of ₹ 470 to ₹ 750/- amounting to ₹ 1,79,88,336/- was excessive on the reasoning that it was not possible of having this percentage of skilled workers, therefore, the assessing officer disallowed 20% of the salary in this category to the amount of ₹ 35,97,667/- and added to the total income of the assessee. 4. Aggrieved against the order of the assessing officer, the assessee has preferred appeal before the ld. Commissioner of Income Tax(A). The Ld. Commissioner of Income Tax(A) has deleted the addition made by the assessing officer. The decision of the Ld. Commissioner of Income Tax(A) is reproduced as under:- 4.2 I have considered the facts of the case as also the observation of the AO and the arguments advanced by the AR. The AO has failed to bring any material/independent evidence on record in support of his conclusion that payment to skilled workers was excessive. Neither the AO has collected any evidence regarding average rate of payment to such workers nor has he examined any of the workers to prove that payments reflected in the books of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis with organization like refineries, petrochemicals such as IPCL IOCL Gail. Some of the jobs were of highly labor intensive involving skilled and experienced physical labour force at the site of the work. In view of the above stated facts and circumstances, we considered that assessing officer is not justified in making disallowance of ₹ 35,97,667/- without any supporting material and evidence, therefore, we uphold the decision of the Ld. Commissioner of Income Tax(A). 7. The other issue relate to the payment of hiring charges for Hydra Machine at Barauni site. During the course of assessment proceedings, the assessing officer noticed that the assessee has paid hiring charges for usage of hydraulic machines amounting to ₹ 40 lacs. He stated that the assessee has paid hiring charges for usage of hydraulic machine to M/s Upendra Prasad Singh, HI Tech Construction Pvt. Ltd amounting to ₹ 40 lacs and H.D.Engg. services, Baroda amounting to ₹ 1,68000 respectively. The payment was made to M/s Upendra Prasad Singh, HI Tech Construction Pvt. Ltd for hiring of 8 tone, 10 tone and 11 tone capacity of hydraulic machine @ ₹ 9000/-, ₹ 10,000/- an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he disallowance of ₹ 20,00,000/- made by the AO in respect of payments made to M/s Upendra Prasad Singh Hi Tech Construction Pvt. Ltd. is not justified and the same is hereby deleted. 9. During the course of appellate proceedings before us, the Ld. D.R. relied on the order of the assessing officer. On the other hand, Ld. A.R. relied on the order of Ld. Commissioner of Income Tax(A). He also furnished paper book containing the details pertaining to written submission made to Commissioner of Income Tax(A), return of income along with statement of income, tax audit reports, ledger a/c of H.D. Engg. Services and Upendra Prasad Singh Hitech Constructions Pvt. Ltd, ledger a/c of Radiant Hitech Engg. Pvt. Ltd. 10. On considering the submission of both the sides we observed that disallowance of ₹ 20,00,000/- made by the assessing officer in respect of hiring of crane payment to M/s Upendra Prasad Singh Hitech Construction Pvt. Ltd, in this connection we noticed that this disallowance was not based on cogent or justifiable reasons. We find that the hiring charges paid was not related to the persons covered under section 40A(2)(b) of the act and the assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income Tax(A), service tax details. 13. We have perused the submission of both the sides and find that the assessing officer had disallowed u/s. 43B of the act of ₹ 3,81,229/- as service tax payable.In this connection we noticed that out of total service tax liability of ₹ 22,07,221/- only amount of ₹ 18,25,992/- service tax was paid on 5th July, 2008 and there was remark in the audit report that the sum for ₹ 3,81,229/- service tax was not due and hence not paid. We considered that there was no liability of the assessee to pay the above referred service tax as on 31-03-2008 and this service tax of ₹ 3,81,229/- was also not debited to the P L a/c , therefore, the Ld. Commissioner of Income Tax(A) is justified in deleting the addition made by the assessing officer. CO No. 231/Ahd/2012 14. The assessee has filed the following cross objections:- 1. The Ld. CIT(A) has considered the facts of the case and provisions of Law and has passed a Speaking Order deleting ₹ 35,97,667 being addition made by the Assessing Officer as alleged excessive wages paid by your the Appellant. 2. The Id. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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