TMI Blog2014 (3) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer to the income of the assessee was the brought-forward opening balance of earlier years - No material was brought on record by the Revenue to show that either the liability was actually discharged by the assessee during the year from some undisclosed source or the liability ceased to exist or remitted during the year under consideration –Additions made are set aside. Addition of labour charges – Held that:- Both the lower authorities have doubted that the liability for labour charges was bogus as the same was outstanding for more than one month - the suspicion, they have brought no material on record after examination that the liability was not genuine or that the assessee did not make the payments for the same in the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... literate person having no bank account and no savings. During the course of his statement, he admitted that whatever he earned was spent and he did not earn enough to save. Therefore, the Assessing Officer observed that it was against human probability that a labourer would allow virtually his whole year's earnings to be retained by the employer for so long. Accordingly, the Assessing Officer held that there was no such liability and made the addition. 4. On appeal, the Ld. CIT(A) held that the Assessing Officer was justified in treating the outstanding labour charges as bogus because the Assessing Officer after examining one of the labourers found that the labourers were totally dependent on the persons who gave them the temporary j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Hon'ble Gujarat High Court by the assessee, the addition made cannot survive. 7. We find that outstanding labour charge of Rs 1,89,854/- which was added by the Assessing Officer to the income of the assessee was the brought-forward opening balance of earlier years. No material was brought on record by the Revenue to show that either the said liability was actually discharged by the assessee during the year from some undisclosed source or the liability ceased to exist or remitted during the year under consideration. We, therefore, respectfully following the decision of the Hon'ble Gujarat High Court in the case of CIT Vs. Bhogilal Ramjibhai Atara (supra) set aside the orders of lower authorities and delete the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs 3,49,490/- and restricted the disallowance to Rs 7,67,566/-. 11. The Ld. AR of the assessee relied on the decision of the Hon'ble Gujarat High Court in the case of CIT Vs. Bhogilal Ramjibhai Atara (supra) and submitted that the disallowance is similar to that raised by the assessee in ground no. 1 and 2 of the appeal. He submitted that the disallowance was made only on probability and without doubting the genuineness of the expenditure incurred by the assessee, hence it was his submission that the addition made was unjustified and should be deleted. The Ld. DR on the other hand, supported the orders of lower authorities. 12. We have heard the rival submissions and perused the orders of lower authorities and material availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s bogus as the same was outstanding for more than one month. Besides, the suspicion, they have brought no material on record after examination that the liability was not genuine or that the assessee did not make the payments for the same in the subsequent years. It is settled position of law that suspicion howsoever grave, cannot take place of proof. Further, it is observed that the payment outstanding was of labour contractor and not labour. It cannot be held that there cannot remain outstanding liability to labour contractor for more than one month. Further, it is not the case of the Revenue that the assessee has not furnished the name and address of labour contractor to whom liability existed so that the Department was prevented from mak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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