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2020 (10) TMI 981 - AT - Income TaxSuppression of debtors - CIT-A deleted the addition - HELD THAT:- Entire turnover of the assessee is exclusively from Government Department and the said turnover has not been disputed by the AO. AO has also not considered the debtors of other divisions and only considered debtors of contracting division - no Government Department issues any confirmation, an issue which has been raised by the AO. AO has just made an estimated calculation and actual figures of various deductions such as TDS, Works contract Tax, Security deposit, royalty, Secured Advances (EMD), and Retention money has not been considered. These facts were not refuted by the Ld. DR at the time of hearing. AO resorted to some strange calculation finding out mismatch in the account of sundry debtors in view of the accounts derived at for the subsequent assessment year. When the AO is accepting the turnover, sales are not disputed and the AO has also not considered the actual figure of various deductions as afore-stated, in such scenario, we are of the considered view that the Ld. CIT(Appeals) was correct in deleting the addition. Addition on account of mismatch in work in progress - CIT-A deleted the addition - HELD THAT:- AO arrived at a conclusion by selecting some particular sites and taking recourse to reverse calculation on the basis of subsequent years profitability. On the facts on records, AO failed to consider specifies of each project. The facts such as escalation in some projects, were not considered. In the case of amount of escalation, there is no corresponding expenditure against the same and therefore, it would not have any impact on WIP. AO has not considered the figures and accounts of all the sites. Adoption of accounts of subsequent years cannot be the basis for calculating work in progress of the year. In view of our above observations, we do not find any reason to interfere with the findings of the Ld. CIT(Appeals). Addition on account of labour payment - AO disallowed 5% of the entire site expenses - HELD THAT:- Ground of the Revenue was against restricting of disallowance to 5% of labour charges by the Ld. CIT(Appeals). However, with the order of the Tribunal [2017 (12) TMI 1780 - ITAT PUNE] this 5% disallowance on labour charges has been overturned and instead 3% disallowance on labour charges has been retained. In such scenario, the ground of appeal by the Revenue before us on this issue needs to be dismissed. Appeal of the Revenue is dismissed.
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