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TMI Blog2015 (7) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... s in profit & loss account. In order to verify the labour charges, three labourers were presented before the AO and their statements were recorded. They claimed before the AO that they have not signed vouchers while receiving payments. On the other hand, the assessee submitted the confirmations from the labourers, after recording of statement that they have received the payments as per the amount debited and that the entire expenditure were incurred for business purposes. The AO did not accept the confirmation on the ground that it was after thought and the vouchers did not contain signatures and labour expenses were inflated. He, therefore, made disallowance of 20% of the labour charges amounting to Rs. 7,98,904/- and added to the income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons easier. He further observed that it is also a fact that in the trade of jewellery manufacture, payments were made in cash to the skilled workers and this was the prevalent practice of the trade. Keeping in view these facts, he restricted the disallowance to 10% of the cash payments i.e. Rs. 2,82,689/- and partly allowed the claim of the assessee. 7. Before us, the AR of the assessee reiterated the submissions made before the CIT(A) whereas the DR supported the order of the CIT(A). 8. We have considered rival submissions and perused the orders of the lower authorities and material available on record. We find no specific error in the order of the CIT(A) could be pointed out by the AR of the assessee. The AR of the assessee could not ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank. The AO was of the view that the method of valuation of stock should not be different for different purposes and to arrive at true and fair result of the business the assessee should make valuation of stock in true and fair manner, and therefore, disallowed Rs. 5,81,631/- on account of difference in closing stock and added to the income of the assessee. 11. Before the CIT(A), the assessee pointed out that no defects in the books of accounts of the assessee has been pointed by the AO, and that a consistent accounting method is followed for valuation of inventory. The assessee has relied upon the decision of Hon'ble Madras High Court in the case of CIT Vs. N.Swamy, 241 ITR 363 (Mad) wherein it was held that mere fact that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock of 22 carat gold was reported to the bank. Later on when the accounts were completed the correct stock was reported in the return of income and audited accounts. That, no mistake in the stock regularly maintained by the assessee could be pointed out by AO. Simply because a bona fide mistake took place in the statement given by the assessee to the bank, no advantage thereof can be taken by the Revenue. 15. It is not a case where the stock was under the lock and key of the bank or the bank official verified the physical stock as on 31.3.2007. He relied on the decision of the Hon'ble Madras High Court in the case of CIT Vs. N.Swamy (supra) wherein it was held that where the assessee made a declaration of stock to the bank for getting ov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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