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DHANESH NARBHERAM BHANSALI Versus ASSISTANT COMMISSIONER OF INCOME-TAX

2015 (11) TMI 573 - ITAT MUMBAI

Disallowance made out of salary and wages - Held that:- Considering the characteristics of contract works, we find some merit in the contentions of the learned authorised representative. Hence the disallowance of entire amount, in our view, is not justified. However, as pointed out by the Assessing Officer, there appears to be some deficiencies in the maintenance of vouchers, for example, the vouchers contain only the name of the labourer without any address. Hence it will be difficult for anybo .....

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salary and wages expenditures to Rs. one lakh. - Decided in favour of assessee in part

Disallowance of value added tax payable amount made under section 43B - Held that:- The assessee had claimed input credit of ₹ 5,67,185, whereas the value added tax auditor determined that the input credit was available to the assessee only to the extent of ₹ 3,68,505. Further, there was difference with regard to value added tax amount paid by the assessee. Accordingly, the Assessing Of .....

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Under these set of facts, we are of the view that the learned Commissioner of Income-tax (Appeals) was justified in confirming the addition of balance amount of ₹ 98,689 by invoking the provisions of section 43B of the Act. - Decided in favour of revenue

Addition of capital introduced by the assessee - Held that:- Since the assessee has filed returns of income in the earlier years by computing income under section 44AD of the Act and since the assessee has shown that he has wit .....

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the appellant. Love Kumar for the respondent. ORDER The order of the Bench was delivered by 1. B. R. Baskaran (Accountant Member).-The appeal filed by the assessee is directed against the order dated December 29, 2010 passed by the learned Commissioner of Income-tax (Appeals)-26, Mumbai and it relates to the assessment year 2007-08. 2. The assessee is aggrieved by the decision of the learned Commissioner of Income-tax (Appeals) in respect of following three issues : (a) disallowance made out of .....

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he Assessing Officer noticed that a sum of ₹ 9,14,060 has been paid to temporary workers by way of cash. Since the vouchers produced by the assessee were found deficient of certain aspects, the Assessing Officer disallowed the entire amount of ₹ 9,14,060. The learned Commissioner of Income-tax (Appeals) also confirmed the same. 4. Before us, learned counsel for the assessee submitted that the assessee could not have executed his contract work without employing the labour force. He fu .....

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6. The admitted fact is that the assessee is in the business of undertaking civil contract works and decoration works. It is a common knowledge of everybody that both kinds of work involve huge labour expenditure. The assessee has claimed labour expenses of ₹ 11.01 lakhs, out of which the sum of ₹ 9.14 lakhs have been paid by cash. The Assessing Officer has however, disallowed the entire expenditure incurred by way of cash on the reasoning that there are certain deficiencies in the v .....

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ained on the labour payment sheet itself. He submitted that this practice is generally followed in all the construction contractors, since local labourers are generally employed from the place of site itself. Considering the characteristics of contract works, we find some merit in the contentions of the learned authorised representative. Hence the disallowance of entire amount, in our view, is not justified. However, as pointed out by the Assessing Officer, there appears to be some deficiencies .....

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et aside the order of the learned Commissioner of Income-tax (Appeals) on this issue and direct the Assessing Officer to restrict the disallowance out of salary and wages expenditures to Rs. one lakh. 7. The next issue relates to disallowance of value added tax payable amount by invoking the provisions of section 43B of the Act. The Assessing Officer noticed from the value added tax audit report that a sum of ₹ 1,92,087 was found payable by the assessee. However, the assessee had disallowe .....

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tative submitted that the assessee has claimed input credit of ₹ 5,67,185. However, the value added tax auditor has restricted the same to ₹ 3,68,505. Similarly, the assessee had taken the value added tax amount paid by him as ₹ 7 lakhs. However, the value added tax auditor has taken the same as ₹ 8 lakhs. The abovesaid differences have resulted in showing of outstanding amount of ₹ 1,92,087. The learned authorised representative submitted that the value added tax p .....

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x auditor has clearly pointed out that the assessee is liable to pay a sum of ₹ 1,91,878 and by adopting the same the Assessing Officer has computed the outstanding value added tax liability at ₹ 1,92,087. Since the assessee has disallowed only a sum of ₹ 93,398 only, the Assessing Officer has disallowed the balance amount of ₹ 98,689. 10. In the rejoinder, the learned authorised representative pointed out that the assessee was allowed tax credit of ₹ 1,77,373 subse .....

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rence with regard to value added tax amount paid by the assessee. Accordingly, the Assessing Officer has determined the value added tax amount payable at the year end at ₹ 1,92,087. It is not the case of the assessee that he has not accepted the value added tax audit report. Having accepted the value added tax audit report, in our view, the assessee was not justified in denying the value added tax liability shown in the audit report. Further, the assessee has not shown to us that the compu .....

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