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2020 (1) TMI 954 - AT - Income TaxDisallowance of labour expenses - CIT (A) confirmed disallowance to the extent of 25% instead of 50% disallowed by AO - HELD THAT:- CIT(A) has stated that assessee has also produced bills in respect of most of the discrepancies and the gross profit of the assessee firm has tremendously gone up from 4.89% to 14.01% in the earlier years. CIT(A) has held that many discrepancies noted by the assessing officer were explained by the assessee during the course of appellate proceedings but many have not been explained. Therefore, the ld. CIT(A) has restricted he disallowance to the extent of ₹ 25% to the amount of ₹ 37,28,270/-. In the light of the findings of the ld. CIT(A) and considering the there was tremendous jump in the gross profit from 4.89% to 14.01% in the year, we consider it will be reasonable to restrict the disallowance to the extent of 12.5% to meet the end of justice for want of verification on account of not providing proper supporting bill/vouchers. Therefore, addition to the extent of ₹ 18,64,135/- is confirmed. This ground of appeal is partly allowed. Disallowance of salary expenses - HELD THAT:- The assessee has only furnished the copies of ledger account but failed to demonstrate with relevant evidences, the nature of work done by the employees, copies of bank statement reflecting the payment made and other relevant evidences that the aforesaid employees have employed with assessee. Therefore, we do not find any reason to interfere in the finding of ld. CIT(A). Accordingly, this ground of appeal of the assessee is dismissed. Disallowance of supervision charges - assessee has failed to substantiate the incurring of such expenses with relevant evidences - HELD THAT:- It is noticed that assessee has claimed that such supervision charges paid to Shri Gaurang Patel, however, the assessee has failed to prove the genuineness of incurring of such expenditure with relevant supporting documentary evidences about the nature of work performed by him and details of payment etc., therefore, we do not find any reason to interfere in the finding of ld. CIT(A). Accordingly, this ground of appeal of assessee is dismissed. Addition by treating advance booking as unexplained credit - Identity and creditworthiness of the parties and the genuineness of the transaction were not proved - HELD THAT:- The assessing officer has not made any inquiry/verification from the aforesaid parties to contradict the claim of the assessee that amount was received as booking amount. In the light of the above facts and circumstances, we consider that decision of ld. CIT(A) is not justified. Therefore, this ground of appeal of the assessee is allowed. Disallowance on account of unexplained expenditure - assessee has failed to substantiate the genuineness of such payment with any relevant supporting evidences - HELD THAT:- It is observed that before the lower authorities, the assessee has not submitted any evidences, detail and nature of expenditure incurred, therefore, the claim of the assessee was disallowed. Even during the course of appellate proceedings before us, the assessee has failed to furnish any relevant supporting evidences to demonstrate that the aforesaid expenditure was incurred for the purpose of business, therefore, we do not find any merit in this ground of appeal of the assessee and the same is dismissed. Disallowance on account unexplained expenditure - HELD THAT:- Assessee has not furnished any relevant supporting evidences to substantiate that differences in the purchases was assessed on account of groping change in account. Further at the level of CIT(A) the assessee has failed to meet reconciliation in the aforesaid difference detected by the assessing officer. Even during the course of appellate proceedings before us, the assessee has failed to furnish supporting evidences to demonstrate that the differences in the purchase was arsied on account of grouping change in account. Therefore, we do not find any reason to interfere in the finding of ld. CIT(A). Accordingly, this ground of appeal of the assessee is dismissed. Disallowance as remuneration paid to partner Dashrathbhai S. Chaudhary, HUF - HELD THAT:- As relying on P. GAUTAM & CO. [2011 (8) TMI 750 - ITAT AHMEDABAD] and HEMTEJ IMPRINT, 4, NARAYAN CHAMBER'S [2010 (7) TMI 1100 - ITAT AHMEDABAD] claim of remuneration paid to the partners as representative of HUF were allowed.
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