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TMI Blog2010 (1) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... to a godown and sufficient time was not given by the Assessing Officer to produce evidence in support of its claim. The short facts apropos are that the assessee, a domestic company engaged in the business of shipping, clearing and forwarding, stevedoring, agro, auto and marketing, had claimed as expenses incentives paid to Dock Labour Board workers of which a sum of Rs. 61,15,088 was disallowed. The matter was taken up by the assessee before the learned Commissioner of Income-tax (Appeals) who gave the following directions to the Assessing Officer in this regard: "Paying additional amount for exploring the stevedoring work cannot be equated with illegal payments for doing a statutory work by Government employees. Even though the loading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in support of its claim of Rs.61,15,088. The assessee in its reply enclosed sample vouchers relating to it and based on such sample vouchers, claimed full allowance. Vide its letter dated January 12, 2007, the assessee made certain submissions to the Assessing Officer, the pertinent part of which is reproduced below : "We had already furnished the sample vouchers for two vessels. The volume of vouchers goes beyond 100 per vessel. Moreover we move all the vouchers to our godown after three years of time. At the distance of time it is possible for us to furnish the entire vouchers for payment of incentive to Dock Labour Board workers. We confirm that the payment is made to the workers and no confirmation from the gang leaders was possible. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Dock Labour Board workers are the employees to the company and the payment of incentive has to be construed as payment of wages. The payments are for the efficient performance of the business and in the nature of additional incentive remuneration paid to the deputed employees. Hence, it is an allowable expenditure. The Dock Labour Board allots work for the ship to a gang of persons and there are certain rules for discharging the work during that period. As heavy damages are to be paid if the work is not completed on priority basis, the appellant undertakes to pay more wages and since they are working with the company under the supervision of the agent employed by the company, it was submitted that this expenditure cannot be considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in CIT v. South India Corporation (Agencies) Ltd. [2007] 290 ITR 217 (Mad) held that there was no breach of law in payments made to the Dock Labour Board workers and such claim for expenses was allowable. However, the hon'ble jurisdictional High Court did not direct that the allowance of such expenditure should be given even when the assessee failed to produce evidence. The learned Commissioner of Income-tax (Appeals) had specifically required the assessee to produce vouchers for its claim of expenditure which it was unable to do. The chronology of events mentioned at paragraph 4 above clearly shows that the assessee was given ample number of opportunities for producing evidence but except for producing certain sample vouchers, it could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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