TMI Blog2016 (1) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses of the assessee. Nor is the case of the revenue that these expenses are bogus or fictitious and have never been incurred or paid by the assessee. Thus, we are of considered view keeping in view the facts and circumstances of the case, that ad-hoc disallowance being 15% of the wages made by the AO cannot be sustained and we are not inclined to interfere with the orders of the CIT(A). - Decided against revenue Assessment u/s 144 - disallowance deleted by CIT(A) - Held that:- AO erred in not considering the replies filed till 16-12-2011 by the assessee during the course of assessment proceedings in tapal/dak counters before the finalization of the assessment u/s 144 of the Act on 16-12-2011 while the CIT(A) has rightly considered the replies filed by the assessee in tapal/dak counters till 16-12-2011 i.e. date of finalization of the assessment u/s 144 of the Act by the AO. The CIT(A) has adjudicated the appeal of the assessee on merits after considering the replies, documents and evidences furnished by the assessee till 16-12-2011. We found no infirmity in the orders of the CIT(A) which we uphold - Decided against revenue - ITA No. 3235, 3234/Mum/2012 - - - Dated:- 4-1-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the site of the construction with their families under temporary accommodations. Since they are illiterate, they cannot sign and therefore use thumb impressions. This Wage Register was audited and approved without any qualifications by the Auditors. It is therefore unacceptable to state that at some places there were no proper stamps. The learned AC has failed to point out the exact figures where there were no proper stamps. Thus it is a Vague Statement without any substantiation and therefore needs to be ignored Your appellant further appreciates that the impugned project of Constructing I. T. park buildings at Hyderabad were subject to so many permissions, approvals and inspections. One cannot expect the regularity and consistency in getting such permissions, approvals etc. This leads to inconsistency in Volume of work done every month. Sometimes it is possible that the Builders/Developers give instruction to your appellant to slow down the Construction Work or increase the pace of work depending upon the market conditions: In the circumstances, no construction work can be carried out with same amount of consistency in the work throughout the year. The learned A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75 (Ind) has held that no disallowance should be made for conveyance expenditures for the want of evidences as it is not possible to support every item of expenditure with proof. Similarly Jaipur Bench ITAT in the case of Raj Enterprises v. ITO (1995) 51 TTJ 408 (Jp) has held that ad hoc disallowance without any cogent reasons are not sustainable. Further Ahmedabad Bench in the case of Monarch Foods Pvt Ltd. v. ACIT (1996) 54 TTJ 405 (Ahd.) has reiterated that ad hoc disallowance without any cogent reason specially in the case of audited accounts are not permitted. 6. The CIT(A) therefore, considered the submissions including case laws relied upon by the assessee and the assessment order and held that the AO has merely disallowed wages on ad-hoc basis without giving any cogent reasons. The CIT(A) held that the said disallowance by the AO cannot be sustained. The CIT(A) further held that the AO has failed to appreciate that the accounts of the assessee are audited and no defect is pointed by the auditors and hence the CIT(A) deleted the ad hoc disallowance on the basis that no cogent reasons has been stated by the AO for disallowance vide orders dated 27-02-2012. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have not pointed out any defect or deficiency in the wage register. The AO has also not also specified any authority of law whereby it is mandatory in India on the part of the payer to compulsorily have signatures of the payee's in the receipts/ vouchers instead of thumb impressions and taking of thumb impressions of the payee will invalidate or lead to inadmissibility/ rejection of the documents under prevailing laws in India nor the AO has brought any authority under Act that if revenue stamp is not affixed on cash payments exceeding the prescribed limit under law, will lead to disallowance of the said expenses under the Act. No doubt, this could be deficiency in the maintenance of records but that is not sufficient to disallow the claim of expenses of the assessee. Nor is the case of the revenue that these expenses are bogus or fictitious and have never been incurred or paid by the assessee. Thus, we are of considered view keeping in view the facts and circumstances of the case, that ad-hoc disallowance of ₹ 14,14,705/- being 15% of the wages made by the AO cannot be sustained and we are not inclined to interfere with the orders of the CIT(A). We order accordingly. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction detail etc. so that verification can be made) were furnished during the assessment proceedings. (vi) On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in holding that furnishing of month-wise detail of wages and maintaining wage register are sufficient compliance of the detailed query raised by the A.O. when no details as per specific queries of the A.O. (asking for no. of workers, payment detail, wage register, payment register etc.) were furnished during the assessment proceedings. (vii) On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in holding that details of salary and bonus were furnished during the assessment proceedings and all salary payments effected by cheques when no such details were actually furnished during the assessment proceedings and all salary payments effected by cheques when no details as per specific query (asking for address of employee, PAN, TDS etc.) were furnished during the assessment proceedings. (viii) The appellant prays that the order of the Ld.CIT(A) on the above grounds be set aside and that of the AO be restored. (ix) The appellant craves leave to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 008-09, the assessee has claimed ₹ 38,98,350/- under the head Salary and bonus and as no justification for the expenses were filed by the assessee and also considering turnover, these expenses claimed appeared to be unreasonable, a show cause notice dated 12-12-2011 was issued by the AO proposing to disallow 15% of the above mentioned expenses claimed of ₹ 38,98,350/- i.e disallowance of ₹ 5,84,752/- was proposed. The assessee did not filed any reply and the AO,therefore, treated ₹ 5,84,752/- as un-explained expenditure and added to total income of the assessee. (c) The AO issued notices u/s 133(6) of the Act to verify the purchases and confirmations had been received from various parties and following differences was observed by the AO: S.No. Name of the seller of the goods Sales as per the seller (In Rs.) Purchases as per assessee (In Rs.) Difference (In Rs.) 1. Sivam Shankaram Civil Works 8,67,710/- 9,41,061/- 73,351/- 2. Shiv Shakti Steel Tubes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 1,37,96,451/- :- The CIT(A) observed that the assessee filed letter dated 01/12/2011 wherein monthwise details of Sub Contract charges along with photocopies of bills of Sub contractors were furnished. The CIT(A) observed that the assessee is a civil contractor. These Sub Contract Charges were subject to TDS. The CIT(A) held that it amounts to sufficient compliance and therefore the impugned disallowance of ₹ 1,37,96,451/- on account of sub contract charges was deleted by the CIT(A) vide orders dated 27.02.2012. b) Transportation charges ₹ 2,56,297/- The CIT(A) observed that the assessee filed letter dated 01/12/2011 wherein details of Transportation Charges (partywise) were furnished. These Transportation charges were also subject to TDS. The CIT(A) observed that it is deemed to be compliance of the query raised by the AO.The CIT(A) therefore deleted the impugned disallowance on account of Transportation Charges ₹ 2,56,297/- vide orders dated 27-02-2012. c) Wages ₹ 1,53,50,684/- The CIT(A) observed that the assessee filed letter dated 01/12/2011 wherein details of Wages (month wise) were furnished. The CIT(A) observed that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t even considered the replies filed by the assessee with tapal/dak counters of the Revenue till the date of framing of assessment u/s 144 of the Act on 16-12-2011 which the AO was obliged under law to consider on merits, and the best judgment assessment u/s. 144 has been framed by the AO on 16-12-2011 without considering the replies filed by the assessee even till the date of finalization of the assessment u/s 144 of the Act on 16-12-2011. The assessee has duly produced before the CIT(A), the evidence of filing of replies in the Tapal/ dak counters of the Revenue which is accepted by the CIT(A). Thus, the AO has erroneously not even considered the replies filed by the assessee in tapal/dak counters of the Revenue before the finalization of the assessment u/s 144 of the Act on 16-12-2011. The CIT(A) has only considered the replies filed till 16-12-2011 i.e. date of framing of assessment u/s 144 of the Act by the AO while adjudicating first appeal while eschewing the replies filed by the assessee before the AO on 19-12-2011 and 20-12-2011 i.e. post finalization of the assessment u/s 144 of the Act on 16-12-2011. Thus, consideration by the CIT(A) of the replies and evidences filed wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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