TMI Blog2018 (10) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... lso submitted that there was more work during the fag end of the previous year i.e. the month of February and March of 2010. Therefore, more diesel expenses were incurred by it. We note that the submissions made by the assessee were not doubted, disregarded by any of the authority below. Therefore, we hold that the addition was made by the AO and subsequently confirmed by the ld CIT(A) is based on surmise and conjuncture. No hesitation in reversing the order of authorities below. Hence, the ground of appeal of the assessee is allowed. - I.T.A. No.373/Ahd/2014 - - - Dated:- 3-10-2018 - Shri Waseem Ahmed, Accountant Member And Smt Madhumita Roy, Judicial Member For the Appellant : Shri S.N. Divatia, A.R. For the Respondent : Shri OM Prakash Pathak, Sr. D.R. ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax (Appeals) XX, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)-XX/90/12-13dated 04.12.2013 arising in the matter of assessment order passed under s.143(3) of the Income Tax Act, 1961(here-in-after referred to as the Act ) dated 31.12.2012 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the assessee is an individual and engaged in the business of Civil Construction. The assessee during the year claimed labour expenses of ₹ 1,62,88,744/- only. Out of which a sum of ₹ 25,66,963/- was paid to M/s. Yogesh R. Shah. The AO during the assessment proceedings doubted the financial capacity of Shri Yogesh R. Shah for the execution of the labour contract. Therefore the assessee was called upon for explanation. 6.1 The assessee during the assessment proceedings submitted that the labour expenses for ₹ 25,66,963/- have been incurred for getting the work executed by Yogesh R. Shah at far off place from Palanpur at the border of Indo-Pak. 6.2 Shri Yogesh R. Shah has also undertaken the work of labour of random rubble masonry and spreading of the metal and grit. This was a quite technical job, which was executed by the team of Shri Yogesh R. Shah. 6.3 The assessee filed the copy of income tax return of Shri Yogesh R. Shah along with his PAN. 6.4 The assessee also submitted that the payment was made to Shri Yogesh R. Shah after deducting the TDS. 6.5 Subsequent payment to the labourers by Shri Yogesh R. Shah was made as per his understanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ledger account of Shri Yogesh R. Shah in the books of appellant as on 1.4.2009 at ₹ 6,76,646/-. No payment out of this amount was made by the appellant to Shri Yogesh R. Shah during the entire year and this opening balance along with the labour claim of the year under consideration was carried forward to the subsequent year. Therefore, it is evident that Shri Yogesh R. Shah was doing service with the appellant and would not have carried out the contract work in absence of the funds when he was not having any bank balances and neither received the dues from the appellant. Appellant's submission that the labour charges were paid by cheque which was only of ₹ 3,84,573/- out of the total claim of ₹ 25,66,963/-does not prove the entire claim as genuine because the substantial amount of labour expenses was outstanding on the last day of the accounting year and no details are available about the payment of such outstanding dues in the subsequent years. Appellant's claim that TDS was made on such payment is also not a conclusive evidence in establishing the genuineness of the claim. Shri Yogesh R. Shah was assessed to tax and filed the return of income on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 to 39 and submitted that the statement recorded by the AO from Shri Yogesh R. Shah was not forwarded to the assessee for his rebuttable. Accordingly, it can be presumed that the statement favorable to the assessee was given by Shri Yogesh R. Shah. 8.1 The assessee has been making the payment to Shri Yogesh R. Shah consistently but the same was not disallowed in any of the year. 8.2 Shri Yogesh R. Shah has filed its income tax return declaring the receipt from the assessee and paid the taxes on his income which was accepted by the Revenue. The assessee executed the job for the border securities forces which is at far off places at the Indo-Pak Border. The payment was made by the assessee to Shri Yogesh R. Shah in the subsequent year and the same was duly accepted by the Revenue. 8.3 The Ld AR in support of his claim drew our attention on the copies of the ledgers of Shri Yogesh R. Shah which are placed on Pages 13 to 20 of the paper book. On the other hand, ld DR relied on the order of authorities below. 9. We have heard the rival contentions and perused the materials available on record. In the instant case, the disallowance was made on account of labour expenses t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of the assessee and observed that the diesel expenses of ₹ 9,26,470/- pertaining to the month of March represents 62.66% of the total diesel expenditure. Accordingly, the AO observed that the expenses incurred in the month of February and March are unreasonably high. Accordingly, the AO disallowed the expenses of ₹ 3,61,080/- and added to the total income of the assessee. 12. Aggrieved, assessee preferred an appeal to ld CIT(A). The assessee before the ld CIT(A) submitted that the AO has made the addition on his presumption and juncture and without rejecting the books of accounts. The assessee also submitted that the GP ratio has been accepted by the AO. Therefore there cannot be any disallowance on account of diesel expenses. 12.1 It was explained that the job work was commenced after the monsoon season and the same was completed before the month of March. Therefore, the diesel expenses were high in the month of these months. 12.2 The assessee also submitted that all the expenses incurred by it were duly supported with the bills/vouchers. Therefore, no disallowance on account of diesel expenses can be made. However, the ld CIT(A) disregarded the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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