2021 (1) TMI 161 - ITAT AHMEDABAD - Income Tax

Head Note / Extract:
Disallowances incurred towards job-work/labour work expenses - HELD THAT:- The assessee has filed the relevant documentary evidences to support its claim. The plea of the assessee that without the RCC work for block numbers A to E of the project, the building construction work cannot be completed and building cannot be sold, appears to be quite compelling to support the factum of rendering of jobwork/ labour work. It is not the case of altogether non-compliance of the notice under s.133(6) of the Act. The Assessing Officer himself has made an averment to the effect that partial/incomplete reply was received from the contractor. However, it is not known as to on what aspects, reply was not adequately received. Thus, in totality of the circumstances, the assessee, in our view, has proved overall bonafides of the expenses actually incurred in relation to construction of project. Given the evidences placed, the Assessing Officer could not have drawn an inference against the assessee in wholesale. The action of the Revenue Authorities is accordingly set aside and the additions made in question is directed to be deleted. Penalty u/s 271(1)(c) automatically gets obliterated. The penalty imposed under s.271(1)(c) of the Act thus stands deleted. Appeal of assessee allowed.