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2014 (4) TMI 66 - AT - Income TaxDeletion of disallowance of labour charges Genuineness of the cash payments made Held that:- The assessee has effected turnover of Rs.22.83 crores during the year and has declared a GP rate of 4.85% as against the turnover of Rs.19.36 crores with GP rate of 3.82% in the immediately preceding year - The "loose sheets" of labour payments did not have the address of the payees - The payments were made in cash to the extent of Rs.2,94,34,800/- during the year - The cash payments made to various persons without having proper record of their addresses etc., could not possibly be verified by the department - The onus is on the assessee to prove the genuineness of the labour payments claimed as deduction by the assessee - the assessee could not substantiate with corroborative evidences the genuineness of the cash components of the labour charges thus, the disallowance at 10% of the cash components of the labour charges is made Decided partly in favour of Revenue. Exclusive method of accounting - Deletion of disallowance of service tax payment Held that:- The CIT(A) was of the view that the assessee has duly accounted for the outstanding service tax payable in his books of accounts - The payment of service tax was made by the assessee through bank account of the assessee duly accounted for in its books of accounts and the copies of the challan and service tax return were also submitted by the assessee before the Revenue authorities - there is no harm in following exclusive method because in no way the picture of state of affairs was getting distorted there is no infirmity in the order of the CIT(A) Decided against Revenue. Violation of Rule 46 of the Act Remand report not called for Held that:- It could not be pointed out by the Revenue that what evidences the CIT(A) has accepted during the course of appellate proceedings without confronting the same to the AO - the assessee has filed details asked for by the AO, but certain further queries by the AO requiring more details, were not submitted by the assessee before the AO - in the absence of any details of specific evidence which may have been accepted by the CIT(A) - the violation of Rule 46A could not be established Decided against Revenue.
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