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2018 (10) TMI 1098 - AT - Income TaxDisallowance of labour expenses - addition treating the same as bogus on the ground of inadequate financial capacity of the labour contractor - Held that:- On perusal of the detail filed by the assessee regarding the labour expenses it was noted that the same were claimed in the earlier years but no disallowance of whatsoever was made by the AO in any of the year. GP ratio has been accepted by the AO during the assessment proceedings. We also find that the books of accounts were duly accepted filed by the assessee during the assessment proceedings. We also note that the payment was made through banking channel after deducting the TDS on such payment. There was no defect pointed out on the above submission of the assessee. - Decided in favour of assessee. Disallowance of Diesel Expenses - Held that:- The assessee has furnished all the necessary details in support of diesel expenses and no defect of whatsoever was pointed out by any of the authority. The assessee also explained that the work was carried out at the location only after the monsoon season. The assessee also submitted that there was more work during the fag end of the previous year i.e. the month of February and March of 2010. Therefore, more diesel expenses were incurred by it. We note that the submissions made by the assessee were not doubted, disregarded by any of the authority below. Therefore, we hold that the addition was made by the AO and subsequently confirmed by the ld CIT(A) is based on surmise and conjuncture. No hesitation in reversing the order of authorities below. Hence, the ground of appeal of the assessee is allowed.
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