TMI Blog2014 (4) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... he genuineness of the labour payments claimed as deduction by the assessee - the assessee could not substantiate with corroborative evidences the genuineness of the cash components of the labour charges – thus, the disallowance at 10% of the cash components of the labour charges is made – Decided partly in favour of Revenue. Exclusive method of accounting - Deletion of disallowance of service tax payment – Held that:- The CIT(A) was of the view that the assessee has duly accounted for the outstanding service tax payable in his books of accounts - The payment of service tax was made by the assessee through bank account of the assessee duly accounted for in its books of accounts and the copies of the challan and service tax return were al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the labour register was incomplete and had certain inherent defects. 3. The learned DR submitted that the labour register produced by the assessee was not complete, and there were number of defects therein, and therefore, the AO was justified in making the disallowance out of the labour expenses claimed by the assessee. He submitted that the assessee failed to produce the addresses of the payees of the labour charges and could not substantiate the labour charge payments and the cash payments out of the labour charges to the extent of Rs.2.94 crores was disallowed by the AO. He submitted that the CIT(A) has wrongly restricted the disallowance out of the labour charges to merely 2% thereof i.e. Rs.6 lakhs out of the total addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has claimed that the return of income of the assessee in the earlier assessment year 2006-07 was accepted in scrutiny assessment and only 1/5th out of some expenses amounting to Rs.1,97,874/- were disallowed by the AO. The assessee is a sub-contractor. However, we find that the assessee was not cooperative in the matter of its assessment before the AO and the ex parte assessment was framed by the AO under section 144 of the Act. The assessee did file certain details of expenses claimed, but could not file the complete address of the persons to whom the payments of labour charges were made. In reply to a specific query from the Bench, the assessee produced loose sheets having the details of the payees of the labour charges with their name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the addition made on account of disallowance of service tax payment of Rs.68,18,444/- found to be not recorded in the books of account considering that the assessee has not furnished details of service tax payable and service tax paid. 6. The learned DR has relied on the order of the AO and the learned counsel for the assessee has relied on the order of the CIT(A). We have considered rival submissions. We find that the CIT(A) has observed that the AO has passed the order without verifying the records on the file. The audit report mentions the amount of provision of service tax payable which required no further evidence. The CIT(A) was of the opinion that the assessee has duly accounted for the outstanding service tax payable in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisive of the issue. We have considered rival submissions. We find that it could not be pointed out by the Revenue that what evidences the CIT(A) has accepted during the course of appellate proceedings without confronting the same to the AO. We find that the assessee has filed details asked for by the AO, but certain further queries by the AO requiring more details, were not submitted by the assessee before the AO. In these facts and circumstances of the case, and in the absence of any details of specific evidence which may have been accepted by the CIT(A), without confronting to the AO, we hold that the violation of Rule 46A could not be established in this case, and accordingly, the ground no.3 of the Revenue is dismissed. 9. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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