TMI Blog2020 (1) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... is partly allowed. Disallowance of salary expenses - HELD THAT:- The assessee has only furnished the copies of ledger account but failed to demonstrate with relevant evidences, the nature of work done by the employees, copies of bank statement reflecting the payment made and other relevant evidences that the aforesaid employees have employed with assessee. Therefore, we do not find any reason to interfere in the finding of ld. CIT(A). Accordingly, this ground of appeal of the assessee is dismissed. Disallowance of supervision charges - assessee has failed to substantiate the incurring of such expenses with relevant evidences - HELD THAT:- It is noticed that assessee has claimed that such supervision charges paid to Shri Gaurang Patel, however, the assessee has failed to prove the genuineness of incurring of such expenditure with relevant supporting documentary evidences about the nature of work performed by him and details of payment etc., therefore, we do not find any reason to interfere in the finding of ld. CIT(A). Accordingly, this ground of appeal of assessee is dismissed. Addition by treating advance booking as unexplained credit - Identity and creditworthiness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Revenue : Shri Uma Shankar Prasad, Sr. D.R. ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER :- This assessee s appeal for A.Y. 2011-12, arises from order of the CIT(A)-7, Ahmedabad dated 30-11-2015, in proceedings under section 143(3) of the Income Tax Act, 1961; in short the Act . 2. The assessee has raised following grounds of appeal:- 1. Ld. CIT (A) erred in law and on facts in confirming disallowance of ₹ 37, 28, 270/- to the extent of 25% of labour expenses incurred instead of 50% disallowed by AO. Ld. CIT (A) ought to have deleted disallowance in toto when discrepancies noted by AO are duly explained by the appellant. It be so held now. 2. Ld. CIT (A) erred in law and on facts in justifying disallowance of 25% of labour expenses since the appellant could not categorically prove that all expenses were wholly and exclusively incurred for the purpose of business Ld. CIT (A) ought to have deleted disallowance of genuine business expenses duly supported by documentary evidence. It be so held now. 3. Ld. CIT (A) erred in law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he act was issued on 28th Sep, 2012. Assessment order u/s. 143(3) of the act was passed on 25th Jan, 2014 and total income was assessed at ₹ 1,36,92,398/- after making several additions under various heads mainly on account of disallowance of various expenses. 4. Aggrieved assessee has filed appeal before the ld. CIT(A) and the ld. CIT(A) has partly allowed the appeal of the assessee. The remaining facts of the case are discussed while adjudicating the various grounds of appeal filed by the asssessee as under:- Ground Nos. 1 2 are interconnected and pertained to mainly restricting the disallowance out of labour expenses at 25% 5. During the course of assessment, the assessing officer noticed that assessee had claimed ₹ 1,65,31,290/- as labour expenses incurred during the year under consideration. On verification of the detail furnished, the assessing officer observed various discrepancies in the supporting material furnished by the assessee i.e. bills were undated, unsigned, no address, no serial no etc. Considering such discrepancies as elaborated at page no. 4 to 8 of the assessment order, the assessing officer ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- (i) The nature of work was very transparent as per the copy of plant and permission obtained for construction. (ii) Advance used to be given on the basis of work in progress and the bills are raised at the end of the year. (iii) It is also explained that some payment remained outstanding due to some dispute in the bills (iv) The bill itself specifies the nature of work and the rate of work are varied from party to party. (v) Some of the contractors under group of contractors therefore the address and phone no. were the same. The submission furnished by the assessee was reproduced at page no. 10 to 18 of the ld. CIT(A) s order. The CIT(A) has stated that assessee has also produced bills in respect of most of the discrepancies and the gross profit of the assessee firm has tremendously gone up from 4.89% to 14.01% in the earlier years. The ld. CIT(A) has held that many discrepancies noted by the assessing officer were explained by the assessee during the course of appellate proceedings but many have not been explained. Therefore, the ld. CIT(A) has restricted he disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has only furnished the copies of ledger account but failed to demonstrate with relevant evidences, the nature of work done by the employees, copies of bank statement reflecting the payment made and other relevant evidences that the aforesaid employees have employed with assessee. Therefore, we do not find any reason to interfere in the finding of ld. CIT(A). Accordingly, this ground of appeal of the assessee is dismissed. Ground No. 4 ( Disallowance of supervision charges of ₹ 2,22,200/-) 12. During the course of assessment, the assessing officer has disallowed supervision charges of ₹ 2,22,200/- (₹ 1,61,600+ ₹ 60,600/-) as the assessee has failed to substantiate the incurring of such expenses with relevant evidences. 13. The assessee has filed appeal before the ld. CIT(A) on this issue and the ld. CIT(A) has dismissed the appeal of the assessee. 14. We have heard both the sides on this issue and perused the material on record. It is noticed that assessee has claimed that such supervision charges paid to Shri Gaurang Patel, however, the assessee has failed to prove the genuineness of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. 20. We have heard both the sides and perused the material on record. It is observed that before the lower authorities, the assessee has not submitted any evidences, detail and nature of expenditure incurred, therefore, the claim of the assessee was disallowed. Even during the course of appellate proceedings before us, the assessee has failed to furnish any relevant supporting evidences to demonstrate that the aforesaid expenditure was incurred for the purpose of business, therefore, we do not find any merit in this ground of appeal of the assessee and the same is dismissed. Ground No. 7 (Disallowance of ₹ 3,34,874/- on account unexplained expenditure) 21. During the course of assessment on perusal of the purchase register, the assessing officer noticed that total purchases was shown at ₹ 2,24,51,267/-, however in the P L A/C the assessee has debited total purchases at ₹ 2,27,86,141/-. The assessee explained that the difference between the purchase register and the P L A/c was due to groupin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e firm in the HUF capacity. In this regard, the ld. counsel has made reliance on the decision of Co-ordinate Bench of the ITAT in the case of Hemtej Imprint Vs. Dy. CIT vide ITA No. 1520/Ahd/2010 dated 30-07-2010 and in the case of P Gautam Co. Vs. JCIT Range-III Ahd (2011) 14 taxman.com 79 (Ahd) dated 26th Aug, 2011. On the other hand, ld. departmental representative has supported the order of ld. CIT(A). 27. We have heard both the sides and perused the material on record and gone through the judicial pronouncement referred by the ld. counsel. In the case of P. Gautam Co. supra, the ITAT has held as per head note as under:- Section 40(b) of the Income-tax Act, 1961 - Business disallowance - Interest salary, etc., paid by firm to partner - Assessment year 2007-08 - Whether a partner of a firm is an individual only even if he is partner as a representative of HUF - Held, yes - Whether, therefore, where assessee-firm paid salary to a partner who was actively engaged in conducting affairs of business of firm, it was to be held that requirement of Explanation 4 to section 40(b) stood complied with, and, thus, assessee-firm would be entitled to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act as well as in the Excess Profits Tax Act, hut it is not juristic person for all purposes. When two kartas of two Hindu undivided families enter into a partnership agreement the partnership is popularly described as one benveen the two Hindu undivided families hut in the eye of law it is partnership between the two kartas and the other members of the families do not ipso facto become partners. There is, however, nothing to prevent the individual members or one Hindu undivided family from entering into a partnership with the individual members of another Hindu undivided family and in such a case it is a partnership between the individual members and it is wholly inappropriate to describe such a partnership as one between two Hindu undivided families. This decision has been noted in the case of Van-son Kids Suff 83 ITD 268 wherein also the partner representing in HUF capacity was held to be a working partner in his individual capacity and the remuneration was allowed within the meaning of section 40(b) read with Explanation thereto. We also find that the Ahmedahad Bench of the Tribunal in the case of Gandhi Babula Bhogilal and Co. in ITA No.2380/Ahd/1995 order dated 7-9-1999 has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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