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2018 (8) TMI 1880 - AT - Income TaxAd-hoc disallowance of labour and contract staff expenses - HELD THAT:- Addition is wholly unjustified. AO noted that the turnover, GP and NP is better in assessment year under appeal as compared to preceding years, therefore, financial results were accepted by the AO. Thus, there were no reasons for the assessee to inflate the expenses further. No possibility of leakage of revenue as noted by AO. No such disallowance have been made in earlier and subsequent assessment years. Rule of consistency should be followed by authorities below. AO has not given any specific details and the amount for which there were no names and address or work assigned have been mentioned in the vouchers. In the absence of any details it appears to be ad-hoc addition. Further nature of business of the assessee i.e. electric contractor shows that assessee has employer labour from unorganised sector and generally cash payments are made to the labour for completion of the work, therefore, reasons given by the Assessing Officer are not satisfactory to make ad-hoc disallowance. Addition on account of commission expenses - CIT (A) empowerment to enhance an income - HELD THAT:- did not made disallowance out of commission expenses. The Ld. CIT (Appeals) has taken up the issue of commission expenses suo-moto in the appellate proceedings, therefore, the issue of commission did not arises out of the assessment proceedings. It is well settled law that Ld. CIT (A) was not empowered to enhance an income which is not matter of assessment. The issue is covered by aforesaid judgments relied upon by Ld. counsel for the assessee. It is, therefore, clear that Ld. CIT(A) cannot touch upon an issue which does not arise from the order of the assessment and was outside the scope of the order of the assessment. Thus, the order of the CIT(A) cannot be sustained in law. This alone is sufficient to delete the entire addition. - Assessee appeal allowed.
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