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2017 (9) TMI 315 - HC - Income TaxBogus expenses - materials consumed in respect of sand, dust and bajri - no supporting bills/vouchers - genuine expenditure - Held that:- However, out of the total amount of material consumed , supporting evidence in the form of bills/vouchers were not available for an amount of ₹ 46,84,809/- and it is that which has been disallowed by the AO and added back to the income of the assessee. The learned counsel for the revenue submits that there was absolutely no basis for the CIT(A) or the tribunal to have reduced the disallowance from ₹ 46,84,809/- to ₹ 9,36,962/- and ultimately to ₹ 4.00 lacs respectively.- Therefore, we are in agreement with the learned counsel for the revenue that the finding of the tribunal in limiting the disallowance to ₹ 4.00 lacs has no basis at all and there is no evidence to back the same.- Decided in favor of revenue. Addition of Site Expenses - no supporting bills/vouchers - Held that:- All the authorities below recognized the fact that expenditure in respect of site expenses has to be allowed though not in toto. The disallowance by all the three authorities has been based on their respective estimates. Since the tribunal is the final fact finding authority, we have nothing before us to challenge the estimation of the tribunal by restricting the addition to ₹ 4.00 lacs. In fact, we agree with the learned counsel for the assessee that this question is purely one of fact and is not a substantial question of law. - Decided in favor of revenue. Addition of non verifiable labour expenses made in cash - Held that:- The assessee had debited an amount of ₹ 4,82,25,191/- under labour expenses and the AO had made a disallowance of 5% thereon amounting to ₹ 24,11,260/- which was confirmed by the CIT(A). The reasoning adopted by the AO was that as the genuineness of payments to the aforesaid extent could not be ascertained, therefore, he considered it appropriate to disallow 5% of the expenditure as the same was made in cash and were not “properly verifiable”. However, the tribunal being the final fact finding authority has taken the stand that the muster roll which contained all the details of the labour and the payments made had not been rejected by the Assessing Officer and, therefore, no disallowance could be made on this account.- Decided in favour of assessee.
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