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2018 (6) TMI 886 - AT - Income TaxDisallowance of labour charges - assessee violated the relevant statutory provision relating to PF & ESI Scheme in respect of the said workers - Held that:- Assessee is a partnership firm, which is deriving income from execution of labour contract job - thus the major expenditure required to be incurred by the assessee to earn the said income was on account of labour charges - the major expenditure required to be incurred by the assessee to earn the said income was on account of labour charges - hence claim of wages of the assessee amounting to ₹ 38,68,613/- was not entirely bogus - therefore we are of the view that it would be fair and reasonable to disallow the wages of ₹ 38,68,613/- in question to the extent of 25%. The net profit of the assessee’s business after such disallowance would be little more than 10%, which in our opinion, is fair and proper - restrict the disallowance made by the Assessing Officer and confirmed by the ld. CIT(Appeals) out of labour charges to 25% - Appeal of the assessee is partly allowed.
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