2019 (10) TMI 194 - AT - Income Tax

Disallowance out of labour expenses - profit estimation - HELD THAT:- We are of the view that only element of profit embedded in these receipts are required to be treated as unaccounted income.

Since the ld.CIT(A) has restricted the disallowance at 12.5% on the basis of finding recorded in the Asstt.Year 2011-12, but that finding of the ld.CIT(A) was not upheld by the ITAT, and has scaled down to 2%.

Therefore, respectfully following the order of the Co-ordinate Bench, we allow this ground of appeal and direct the AO to compute disallowance out of labour expenses at 25% of the total labour payment made by the assessee. In other words, it should 2% (two percent) of ₹ 1,90,43,133/-. This ground of appeal is partly allowed.