TMI Blog2018 (6) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee where in the assessment order a demand of ₹ 404.6 lakh was raised against the assessee and thereafter on appeal the assessee was granted refund. Hence, the assessee's plea that the VAT refund accrues in the financial year in which the assessment attains finality is cogent. In the case of Nuchem Ltd. [2011 (2) TMI 159 - PUNJAB AND HARYANA HIGH COURT] where similar claim of excise duly refund was there and the addition was deleted on the ground that the same was not to be accounted for till the matter attains finality. - Decided in favour of assessee. - ITA no.160/Nag./2017 - - - Dated:- 11-6-2018 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER For The AssesseeShri K. P. Dewani For The Revenue : Shri Gitesh Kumar ORDER PER SHAMIM YAHYA, A.M. This appeal by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) dated 02.02.2017 and pertains to assessment year 2012-13. 2. The grounds of appeal read as under: 1. The Hon'ble CIT(A) erred in confirming addition at ₹ 61,63,854/- in respect to labour expenses and piece work charges. 2. The adhoc addition at 5% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -. That the assessee has claimed piece work charges at ₹ 10,34,71,727/- in Profit Loss Account. That thus there is no variance as observed by A.O. in respect to piece work charges claimed as per books of accounts and VAT Audit Report. That the observation of Assessing Officer for making addition on this ground is factually incorrect. That the labour charges paid by the assessee are in cash. It is a matter of common knowledge that labour charges are paid in cash considering the sites are at replaces and are not supported by banking facilities. The manner of addition made clearly suggests that it is adhoc estimated addition and is not based on any specific evidence or record. That in the case of the assessee in preceding assessment year 2011-12 assessment has been framed u/s 143(3) of I.T. Act 1961, accepting the trading results as shown by the assessee. Net profit ratio at 5.74% in the case of the assessee has been accepted for last year. During the assessment year under consideration the assessee has declared net profit ratio at 5.86%. A.O, has not found the net profit ratio for the year under consideration to be low so as to make any estimated addition. Assessee has declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see submitted that assessee had made a genuine claim. He submitted that books of accounts are regularly maintained and audited by chartered accountants. These books of accounts are not rejected by the assessing officer and on that ad hoc basis, disallowance has been done by the assessing officer. He submitted that in the appellate order under MVAT Act, 2002, the deduction has been granted in the appellate proceedings at ₹ 1,98,05,360/- towards labour charges. Hence, the learned counsel of the assessee submitted that the disallowance in this regard is unjustified. 7. Per Contra, the learned departmental representative relied upon the order's of the authorities below. 8. We have carefully considered the submissions and perused the records. We find that assessing officer has made ad hoc disallowance out of the labour expenditure for absence of proper vouchers. The assessing officer has also referred to discrepancy between figures of assessee and that as per VAT audit report. The ld. Commissioner of Income Tax (Appeals) in his order has given a finding that assessing officer's observation that the figures by the assessee are at variance with VAT audit report, is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Commissioner of Income Tax (Appeals) confirmed the addition by holding as under: 10.2 The appellant in the VAT return has claimed sum of ₹ 24,82,241/- refundable for the year ending 31/03/2012. The appellant is following mercantile method of accounting and thus any sum claimed by him in the VAT return as receivable has to be considered as income liable to be taxed as it pertains to its business operations carried out during the year under consideration. The above sum is not shown in the balance sheet of the appellant as receivable from VAT Department. In view of above, no fault can be found as referred to addition made by the A.O. The appellant's submissions are found devoid of merits and thus addition made by the A.O. at ₹ 24.82.241/- is, accordingly, confirmed. This ground of appeal is dismissed. 11. Against the above order, the assessee is in appeal before us. 12. We have heard both the counsel and perused the records. The learned counsel of the submitted that the amount shown in VAT return as refundable, cannot be termed as debt receivable by the assessee. He submitted that claim of amount receivable depends upon determination of liability by VAT aut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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