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Shri Anil Lakhanlal Malviya Versus Dy. Commissioner of Income-tax, Nagpur

Disallowance of Job work charges paid - Held that:- It is not in dispute that bills from respective firms who have done the work are available on record. The payments have been made to them and TDS deducted. There is no law that a person cannot do business in four different business concerns. Regarding the scope of work, adverse inference cannot be drawn that the same is not registered. There is no law which requires that unless there is a registered scope of work, the payment made there-under w .....

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ned CIT(Appeals) is merely based upon suspicion and surmises. It is settled law that any addition based on suspicion and surmises is not sustainable - Decided in favour of assessee. - Addition being 10% of administrative expenses - addition has been made solely on the ground that the expenses are paid in cash and self made vouchers were produced - Held that:- No specific details of the expenditure which were to be disallowed on account of these facts have been brought on record. While the AO .....

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icial Member Appellant by : Shri Kapil Hirani Respondent by : Shri A.R. Ninawe ORDER Per Shamim Yahya, A. M. This appeal by the assessee is directed against the order of learned CIT(Appeals)-I, Nagpur dated 22-12-2014 and pertains to assessment year 2010-11. The grounds of appeal read as under : 1. On the facts and circumstances of the case, the Hon ble CIT(A) grossly erred in sustaining the addition of ₹ 20,29,338/- representing job work charges paid disregarding the supporting MOU s and .....

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ble to be deleted. 3. The Hon ble CIT(A) further erred in sustaining the addition on account of job work charges relying on the fact that the name of one of the entity to whom job work charges have been paid was appearing in the List of Suspicious Dealers published by the Sales Tax Department without appreciating the fact that the so called List was for dealers engaged in purchase and sale of goods and not job Work and as such is not relevant to the facts of the case. Under any case the list mer .....

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ble CIT(A) erred in sustaining the addition of ₹ 2,24,398/- representing 10% of the administrative expenses ignoring the fact that the books of accounts of the appellant are duly audited and the entire expense having been incurred wholly and exclusively for the business of the appellant. The addition made by the AO and sustained by the Hon ble CIT(A) being based on mere assumption and presumption deserve to be deleted in the interest of natural justice. 6. Under any case, the addition of & .....

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ness of marketing and servicing of Industrial Products under the name and style of M/s S.R.S. Engineers. The appellant during the year has claimed the job work charges of ₹ 29.14 Lakhs out of which the job work charges to the tune of ₹ 20,29,338/- are claimed to have been paid to four entities as under : (i) M/s R J Metal Industries ₹ 4,85,859/- (ii) M/s Reliable Metal Works ₹ 5,46,788/- (iii) M/s Rajlakshmi Corporation ₹ 4,97,701/- (iv) M/s Resham Steel Alloys S .....

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ities is also the same i.e. 108, Ravindra Villa, Adeshwar, Dadi Street, Girgaum, Mumbai whereas the address given in respect of Resham Steel Alloys is Worli, Mumbai. The AO has issued notices u/s 133(6) to all the four concerns and the same returned back undelivered with the postal authorities remarks as Not claimed returned to sender . The AO in Para 4 of his order has recorded a finding that the Sales Tax Department of Govt. of Maharashtra had published a list of suspicious dealers who have is .....

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essment order has recorded a finding that the assessee neither produced any bills nor any confirmation from the said party, M/s R J Metals. The assessee, however, submitted a copy of Bank Certificate giving details of payments made to the said four concerns along with the MOU signed with Shri Ashwin Kumar Dikole, 108, Adeshwar Dadi Street, Girgaum, Mumbai. The MOU is regarding providing trained man-power along with qualified engineers for technical support for Power Stations in Chattisgarh, West .....

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(Appeals. The learned CIT(Appeals) confirmed the AO s action concluding as under : The AO contends that an MOU was filed before the AO which spell out the scope of work. It, however, is seen from records that no MOU has been filed except a letter dated 11th April, 2009. The contents of the letter as regards to the scope of work and the terms of payment are quite vague. Further that the appellant could not demonstrate that the work assigned by him to the contractor on the lines of terms of the co .....

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these facts and circumstances, I decline to interfere with the order of the AO. Since the appellant could not explain the genuineness of the job work charges paid, the addition made by the AO of ₹ 20,29,388/- is upheld. This ground is dismissed. 6. Against the above order the assessee is in appeal before us. 7. We have heard both the counsel and perused the records. We find that adverse inference in this case has been drawn by the authorities below on the ground that letters issued u/s 13 .....

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eration we find that it is not in dispute that bills from respective firms who have done the work are available on record. The payments have been made to them and TDS deducted. There is no law that a person cannot do business in four different business concerns. Regarding the scope of work, adverse inference cannot be drawn that the same is not registered. There is no law which requires that unless there is a registered scope of work, the payment made there-under will not be allowed. Another adv .....

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n ble Apex Court in the case of CIT vs. Orissa Corporation P. Ltd. 159 ITR 78. No case has been made out that similar work was done for the first time or that the receipts against the work done have been found to be bogus. In such circumstances, in our considered opinion, the inference drawn by the AO and the learned CIT(Appeals) is merely based upon suspicion and surmises. It is settled law that any addition based on suspicion and surmises is not sustainable. Even the AO in his concluding remar .....

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