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2017 (6) TMI 639 - AT - Income TaxDisallowance of labour charges - payments as made in cash - Held that:- The total payment has been made to 68 persons, the aggregate payment was ₹ 4,90,26,955/- which comprised of cash payment of ₹ 13,03,219/-. It is thus seen that the cash payment constituted around 3% of the total payments, the maximum and minimum cash payment to an individual person was ₹ 1,03,400/- and ₹ 400/- respectively. We find that assessee had furnished the PAN numbers of all these 68 persons to the AO but however AO did not make any inquiry about the receipt of payments by them from assessee. Further Revenue has not placed any material to demonstrate that the payment of expenses as claimed by the assessee is bogus. In such circumstances considering the totality of the aforesaid facts and the nature of business activities of assessee, we are of the view that the disallowance of expenses of ₹ 2,99,682/- (where PAN is not available) and of ₹ 13,03,219/- (where PAN is available) is not called for and therefore we direct its deletion. As far as payment stated to have been made to departmental labour and from the details of various projects, where it has been incurred it is seen that the expenses have been incurred for 15 projects at various sites. The assessee has also placed sample copies of the vouchers in the paper book. We find that Ld. CIT(A) has noted that despite various opportunities granted to assessee, assessee has not placed necessary details to justify the payment. Considering the nature of work and the fact that the increasing of expenditure is not doubted by Revenue ends of justice shall be met if the disallowance is restricted to ₹ 20 lacs as against ₹ 47,22,572/- confirmed by Ld. CIT(A).Grounds of assessee partly allowed.
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