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2013 (11) TMI 1322 - AT - Income TaxAllowability of labor expenses on self drawn vouchers of Assessee - The appellant had debited labour expenses amounting to Rs. 40,53,382/- and payment to the labourers were made in cash on self drawn vouchers, which are not verifiable. Besides this, the appellant had not maintained day-to-day records on consumption of raw materials – Held that:- The appellant made payment to the labour in cash but which has been signed by the recipients - The assessee had shown comparative chart not only with preceding year but site wise which shows that labour charges paid during A.Y. 06-07 were 14.74% of total expenses which has been reduced at 3.3% during the year under consideration. It reveals that more labours were used in A.Y. 06-07 and in A.Y. 07-08, this work has been executed either through sub-contractor or machine - A.O. had not pointed out any specific defect in the books of account, dis-respecting audit report before disallowing the labour expenses. There is no abnormal increase in the labour charges – Decided against the Revenue. Expenses allowable u/s 43B of the Income Tax Act - Granting relief of Rs.25,12,296/- on account of disallowance u/s.43B of the Act and restricting the disallowance to Rs.52,054/- out of total liability of VAT u/s.43B of the Act – Held that:- The CIT(A) has verified all the accounts of the service tax as well as VAT account and finally he determined the total unpaid tax liability u/s. 43B Rs.41,643/- and other payments have already been made on or before due date of return filed by the assessee on the basis of service tax received by the appellant – Confirmed the order of Commissioner(A) – Decided against the Revenue. Disallowance u/s 40A(3) of the Income Tax Act - Cash payment exceeding Rs.20,000/- to Abada Musabhai Ismailbhai, subcontractor and violated the provisions of 40A(3) of the IT Act on four payments mentioned in the assessment order – Held that:- It is found that TDS has already been deducted by the appellant u/s. 194C of the IT Act and no single payment is more than Rs.20,000/- for which the evidence placed – Assessee relied upon in case of CIT vs. S.S.P. (P.) Ltd. in [2010 (12) TMI 370 - PUNJAB AND HARYANA HIGH COURT] and decided the issue in favor of Assessee – Decided against the Revenue.
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