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2015 (7) TMI 1067 - AT - Income TaxApplicability of provisions of section 40(a)(ia) - Held that:- Consistent with the view taken by the ITAT Special Bench Visakhapatnam in the case of Merilyn Shipping (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) and also in the light of the view expressed by the Hon’ble A.P. High Court in the case of Janapriya Engineering Syndicate [2015 (5) TMI 309 - ANDHRA PRADESH HIGH COURT] we are of the opinion that the provisions of section 40(a)(ia) of the Act cannot be made applicable in respect of the amounts already paid before 31st March. In other words, the A.O. is directed to restrict the disallowance to the amounts payable after 31st March. - Decided partly in favour of assessee Addition to the claim of payment of wages - Held that:- The assessee debited a total amount of ₹ 2.29 crores towards wages under different heads such as wages, casual labour charges, civil work labour charges, etc., which is more than 57% of the gross receipts of the assessee. The assessee has not maintained proper registers and most of the payments are made in cash. Since the claim is not verifiable, the assessing officer was of the opinion that expenditure should be reasonable with reference to the gross receipts of the assessee. Having regard to the circumstances of the case he disallowed only 10% of the total claim of the assessee, which was also upheld by the Ld. CIT(A). Even before us, no material was placed to indicate that the expenditure incurred by the assessee was reasonable and not excessive. Having regard to the circumstances of the case, we are of the view that the disallowance made by the A.O. and confirmed by the CIT(A) is reasonable - Decided against assessee
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