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2021 (8) TMI 64 - AT - Income TaxDisallowance of 15% of job work charges - AO held that out of nine parties except two Himmatbhai and Dhirubhai, all expenses for remaining seven job works parties are not genuine - CIT(A) while restricting the disallowance to the extent of 15% of total disallowance observed that all the payments to labour job work was paid through cheques. The assessee deducted tax at source while making payment to the job works parties - HELD THAT:- The role of the accountant who had allegedly prepared bills of the job workers and withdrawn the amount from the accounts of the Job workers was examined. CIT(A) find that such bills are signed by the job workers without verifying the details and the payments were withdrawn from the bank by the accountant. None of the worker could produce the original of the bills. CIT(A) after considering the decision of Tribunal in Ashwin Diamonds [2012 (5) TMI 847 - ITAT AHMEDABAD] held that in the said case the Tribunal restricted the labour and other expanses to the extent of 10%. But keeping in view, the basic difference in facts of the present case that original of Jangad was not verifiable as the same were not produced and some of the payments from the bankers of the job workers were withdrawn by the accountant of the assessee and for covering such discrepancies the ld CIT(A) restricted the disallowance to the extent of 15% of the total disallowance of labour expenses to meet the end of justice. GP and NP ratio of the assessee is better comparative to other similar business houses. In AY 2012-13, the assessee has shown NP @ 4.27%, however, Thumar Gems has shown NP @ 2.12 %, Jodhani Export @ 3.46% and K.N. Diamond @ 3.22% - we are also of the view that 15% disallowance is reasonable to avoid the possibility of revenue leakage. Hence, we affirm the order of ld CIT(A). Resultantly, the grounds of grounds of appeal raised by the revenue are dismissed.
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