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2020 (12) TMI 437 - AT - Income TaxBogus labour expenses - Profit estimation - HELD THAT:- AO has not held that labour expenses so claimed by the assessee were not incurred by the assessee for the purpose of business. Apart from this, we note that assessee is engaged in labor oriented industry and ld. Counsel submitted before us labour expenses ratio to justify the assessee`s claim, therefore considering the nature of assessee`s business, we find some merit in the contentions of the ld. Counsel. While the case of the assessee merits some relief, at the same time entire relief cannot be permitted to the assessee. In our opinion the end of justice would be met if the estimated profit rate of 10% [instead of 12% taken by ld. CIT(A)] is adopted since the same would take care of the bogus labour expenses and other discrepancies. Disallowance of expenditure u/s 40(a)(ia) - non-deduction of TDS - Assessee has shown expenditure to Shri Ghanshyambhai Vekariya under the head "account charges" which was subsequently paid on 01.01.2011 - assessee stated that the expense was in the nature of accounting salary - HELD THAT:- Counsel has failed to demonstrate the relationship between payer and payee as a master and servant. The ld. Counsel did not file any document/evidence, before the Bench which can show that said payment is on account of accountant`s salary. We find merit in the submissions of Ms. Anupama Singla, ld. DR for the Revenue, as she pointed out before the Bench that in order to constitute salary expense, the ld. Counsel should. demonstrate master and servant relationship between payer (assessee) and payee. Considering this factual position, we confirm the addition sustained by the ld. CIT(A) - Decided against assessee.
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