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2013 (10) TMI 461 - AT - Income TaxDisallowance of part of wages claim – proof of payment of wages - Held that:- Ld A.R claimed that the wages are paid on the basis of quantity of cloth manufactured by the weavers, yet the fact remains that the assessee did not furnish any quantity details to substantiate the amount of wages claimed by him – No fault with the tax authorities in entertaining the presumption that there may be a possibility of inflation or bogus claim. It is a well settled proposition that the responsibility to prove the reasonableness lies upon the assessee and in this case, there is a failure on the part of the assessee - AO has compared the ratio of wages claim to the value of yarn consumed in order to determine the reasonableness of the claim. However, it is not be a scientific method to ascertain the reasonableness. While the wages are normally fixed on the basis of inflation index, the rate of yarn would depend upon market forces, quality and variety of yarn etc - At the same time, the assessee has also failed to substantiate the wages claim by furnishing the quantity details - There is justification in disallowing a part of wages claim, so that such disallowance shall take care of inflation or infirmities - Uniform disallowance of 25% of the amount disallowed by the AO in both the years would meet the ends of justice, in all the Assessment years under consideration. - Decided against the assessee.
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