TMI Blog2018 (1) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... d expenditure. Thereby the order of CIT-A is justified on this issue. - Decided against assessee. - I.T.A No. 532/Kol/2015 - - - Dated:- 13-12-2017 - Shri J. Sudhakar Reddy, Accountant Member And Shri S.S. Viswanethra Ravi, Judicial Member For The Appellant : Shri A.K. Tibrewal, FCA, ld.AR For The Respondent : Shri David Z. Chowngthu, Addl. CIT, ld.DR ORDER Shri S.S.Viswanethra Ravi, JM: This appeal by Assessee is arising out of order dated 29-01- 2015 of Commissioner of Income Tax (Appeals), for short CIT(A) herein, 9, Kolkata for the assessment year 2010-11. 2. The only question is to be decided as to whether the CIT(A) is justified in confirming the addition made on account of expenditure incurred on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He held that the assessee produced bills and vouchers for expenses and without executing any work and substantiating the nature of work. The AO disallowed a sum of ₹ 54,38,704/- being the expenses claimed as spent in cash, on Materials Operating Cost and Employee Cost and added the same to the total income of the assessee. Relevant portion of AO s order in this regard is reproduced herein below :- 4. The assessee claimed that a small part of Work (after subcontracting the Work for which 90% of the revenue receipt was paid off as sub-contract expense), was kept aside for execution by the JV, for which there was further expense of ₹ 2,05,42,294.76 debited in the Profit Loss account of assessee BLA JV. Effectively after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to evidence that the assessee-JV had actually done any Work except by production of bills and vouchers of expenses, and the expense cannot be quantified category wise by item number of R.A.Bill as was done in the cases of sub-contractors' Work. Bill and vouchers were raised in thousands and cannot be attributed to any Work performance of BLA Pvt Ltd in the status of a JV, and thus, could not be established as a proof of Work done by the assessee-JV. 6. During the entire proceedings no evidence could be produced to substantiate that there was Work which was not executed by the sub-contractor BLA Pvt Ltd and which had to be executed by BLA Pvt Ltd in the status of a JV, given the fact that the JV had no tools or machineries t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a net profit of 4% in AY 2010-11. The net profit of the assessee is thus effectively increased to 2.79%. 5. Aggrieved the assessee challenged the same before the CIT-A. The CIT-A taking into consideration the decisions of Hon ble Courts along with assessment order and the submission of assessee was of the view that the assessee failed to give the details of work executed by the JV with supporting documents and details either before AO or before him. The CIT-A found that there was no work executed by the assessee JV and that the assessee could not prove that the assessee had any machinery and tools to execute any work. In absence of supporting documents and details to substantiate the claim, the CITA held the AO was justified in disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit. However, I find from the facts and circumstances of the case that the AO had not estimated the profit but disallowed the claim of expenditure of ₹ 54,38,704/- which was not substantiated with the supporting documents. In view of the facts and circumstances of the case as discussed above, I find that the AO was justified to make disallowance of ₹ 54,38,704/-. 6. Before us the ld.AR submits that the CIT-A has erred in confirming the impugned disallowance made by the AO and that he disregarded the principle of consistency, as no such disallowance was made in earlier assessments, involving identical facts on a similar issue. He further submits that the AO made disallowance only by increasing Net Profit ratio from 1.15% t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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