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CR Fashions Pvt. Ltd. Versus ACIT (OSD) , Ward-3 (2) , New Delhi

2017 (9) TMI 1028 - ITAT DELHI

Disallowance of labour wages expenses, embroidery charges, fabrication expenses, and power and fuel expenses - assessment u/s 144 - AO has made the disallowances at the rate of 50% of all the expenditure - Held that:- In view of the fact that assessee is shown a receipt of ₹ 25 Lacs and out of which all these expenditures have been incurred by the assessee. Had the assessing officer has any doubt about the payment in cash, then such doubtful expenditure should have been disallowed and not .....

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printed copy of the bills received by the assessee from those embroiderers and fabricators. There confirmation was also submitted at the time of original assessment. It was also not informed to the assessee that such persons were issued any notices and they have not remained present. It is also required to look that the nature of the business of the assessee, which is in the nature of a very small scale, and the assessee is getting work done through these small workmen who do not have any perman .....

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68 of the income tax act - Decided against revenue. - ITA No. 2089/Del/2012 - Dated:- 13-9-2017 - SHRI I.C.SUDHIR, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Assessee : None For The Revenue : Shri Anshu Prakash, Sr. DR ORDER PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the assessee against the order of the ld CIT(A)-IV, New Delhi dated 21.01.2011 for the Assessment Year 1997-98. 2. The assessee has raised the following grounds of appeal:- 1. That under .....

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production was already closed before the Financial Year 2007. The Ld. AO has disallowed 50% of Labour and Wages which is an assumed and hypothetical figure. In the Income Tax Act, no section supports such a wild decision of AO. However, the section 44AF if read carefully, reads out the percentage assumed for all expenses including depreciation to be 95% and 5% of the sale to be income of the assessee. The Ld. AO had no intention to bring the matter of assessment on a fair trial of the assessee .....

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ction was already closed before the Financial Year 2007. The Ld. AO has disallowed 50% of Embroidery Charges which is an assumed and hypothetical figure. In the Income Tax Act, no section supports such a wild decision of AO. However, the section 44AF if read carefully, reads out the percentage assumed for all expenses including depreciation to be 95% and 5% of the sale to be income of the assessee. The Ld. AO had no intention to bring the matter of assessment on a fair trial of the assessee and .....

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ion was already closed before the Financial Year 2007. The Ld. AO has disallowed 50% of Fabrication expense which is an assumed and hypothetical figure. In the Income Tax Act, no section supports such a wild decision of AO. However, the section 44AF if read carefully, reads out the percentage assumed for all expenses including depreciation to be 95% and 5% of the sale to be income of the assessee. The Ld. AO had no intention to bring the matter of assessment on a fair trial of the assessee and s .....

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ssumed for all expenses including depreciation to be 95% and 5% of the sale to be income of the assessee. The Ld. AO had no intention to bring the matter of assessment on a fair trial of the assessee and so he completely ignored and overlooked section 44AF which is the only guiding section in this case. 6. That under the given facts and circumstances and in Law, Ld. AO grossly erred in treating Sundry Creditors amounting to ₹ 377660.00 as fictitious liability and thereby adding the same to .....

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etermining the total income of the assessee at ₹ 1366636/-. In the assessment order, the Ld. AO made 50% of the disallowance out of labour wages expenses, embroidery charges, fabrication expenses, and power and fuel expenses. An addition of ₹ 377660/- CIT was also made with respect to unexplained credits with respect to two parties. 4. Assessee preferred an appeal before the Ld. CIT(A, who vide order dated 21/01/2011 confirmed the above addition. Against which assessee is in appeal b .....

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officer has disallowed this sum of embroidery charges because of failure on the part of the assessee to show the details of services rendered and further all the transactions of payments are in cash. The notices sent by the Ld. assessing officer were also received back as on sound. With respect to the fabrication charges, also the assessee fails to submit details of the services rendered. Before the Ld. CIT(A), the assessee has produced its books of accounts, which were also produced before the .....

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ges and ₹ 876685/- as fabrication charges were shown. The assessee produced the books of accounts, before the Ld. assessing officer and submitted the copies of the bills and vouchers. However, the Ld. assessing officer disallowed the same as the assessee in cash paid most of the amount. Many times the assessee is also made payment through third parties. The notices issued to the parties under section 133(6) have also returned as unserved. However, the basic fact to be noted is that the ass .....

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penditure should be disallowed. It was also not pointed out by the Ld. assessing officer that whether there was any violation of the provisions of section 40A (3) of the income tax act, then also only such expenditure are disallowable which are hit by that provision otherwise the case payments are not prohibited as per the income tax act if they are below the limit specified therein. Further, the assessee has provided the details addresses of those service providers as appearing on the printed c .....

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