Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (3) TMI 1345 - AT - Income TaxDisallowance towards mobilization of advances claimed by the assessee as sub-contract expenditure - Held that:- The mere existence of an agreement between the assessee and the sub-contractor or making a payment by a cheque, does not bind the Assessing Officer to hold that the payment was made exclusively and wholly for the purpose of assessee’s business. In the present case, though the assessee made payment of ₹ 2 crores to Mr. K. J. Paul, it was not shown as income in the hands of Mr. K.J. Paul by crediting the said amount in his P&L account and also no bills were raised with reference to this payment against the assessee. On the other hand, it was shown as advance in his hands and no corresponding bills were raised against the assessee. In such circumstances, it is not possible to hold that the assessee actually incurred expenditure wholly and exclusively for the purpose of business. No infirmity in the order of the lower authorities and the case law relied on by the assessee’s Counsel is of no assistance to the assessee as the facts of this case are entirely different from the facts of the present case. Accordingly, this ground of appeal of the assessee is rejected. Disallowance of interest on mobilization of advances - Held that:- As submitted by assessee interest on mobilization advance was deducted by the awarder and it is to be considered as expenditure whether the awarder has deducted the interest out of the awardee. The amount has to be verified from the tender agreement entered into by the assessee with Cochin Port Trust. The oral argument of the assessee’s Counsel cannot establish that there is a condition in the tender agreement to deduct interest towards mobilization of advance given to the assessee by the awarder. Accordingly, we remit this issue to the file of the Assessing Officer to examine this issue with reference to the tender agreement entered into by the assessee with Cochin Port Trust. The Assessing Officer has to consider this issue afresh. Thus this ground of appeal of the assessee is allowed for statistical purposes. Disallowance of depreciation on car and Disallowance of JCB hire charges - Held that:- Before us the assessee has not given any reasonable cause for not pressing these grounds before the lower authorities and agitate this issue before us. Accordingly, we find no reason to interfere with the order of the lower authorities on these issues. In view of the above, these grounds are dismissed as not emanating from the order of the CIT(A). Allowability of the claim of 20% labour charges - main crux of the argument of the Revenue is that the assessee had given contract work to sub-contractor and the assessee claimed labour charges which is comparatively on a higher side - Held that:- The issue of incurring of labour charges is to be re-examined by the Assessing Officer with reference to bills and vouchers produced by the assessee and to disallow only that portion of labour charges expenditure which is excessive when compared to similar business. Remit this issue to the file of the Assessing Officer for fresh consideration. Thus this ground of appeal of the Revenue is partly allowed for statistical purposes
|