TMI Blog2013 (12) TMI 1726X X X X Extracts X X X X X X X X Extracts X X X X ..... ising the assessment. 2. The Ld. CIT(A) has erred in law and in facts in confirming the disallowance of brick expenses ₹ 5,04,567/- (purchased from Shri Ramesh Laxman Vareeya ₹ 1,69,567/- Shri Gordhan Laxman Vareeya ₹ 3,35,000/- of Zakhar Dist : Jamnagar) by not admitting the additional evidence produced before him under Rule 46 A. The Ld. CIT(A) ought to have considered the facts that i) In the relevant grounds of appeal No. 2 filed with Form No. 35, it has been stated that the copy of the confirmation was personally submitted to the AO on 28/3/06, however no cognizance has been taken by the AO. ii) Vide order sheet entries Dt. 8/3/2006 the assessee was asked to show cause as to why the purchases of bricks made by the assessee should not be treated as bogus and accordingly the addition should not be made to the total income. iii) Vide order sheet entries hearing were fixed on Dated 16/3/2006, 21/3/2006, 22/3/2006 23/3/2006 within short span of time. iv) The bricks purchased from these parties were utilized in performance of IOCL contract work pertains to construction of sample mother terminal at the site situated at Vadin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as expenditure incurred towards agriculture expenses. Accordingly, he reduced agriculture income from ₹ 2,95,535/- to ₹ 1,77,320/-. 4. Now the assessee is before us and argued that appellant owns 17.88 acres of agriculture land. He gets two crops every year. The agriculture receipts are supported by bills and in A.Y. 04-05, 05-06 06-07 the A.O. had accepted agriculture income as per return of income filed. The assessee filed evidence vide letter dated 03.10.2005 regarding ownership of agricultural land, the reports of Patwari and copy of the sale bills produced before the A.O. Non availability of details of expenses does not constitute a ground for disbelieving agricultural income. The sale bill of agriculture income pertained to sale in market run by the Government committee it is not required to state the mode of payment or bear any revenue stamp. As regards, the agriculture expenses incurred no details have been called for in the past assessment year. As regards seed expenses, the assessee uses the current year crop as seeds in the subsequent year. The other expenses are of nominal nature hence no details had been maintained. He further argued that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riya at Jakhar, Dist.- Jamnagar and sto Shri Gordhan Laxman Varaiya on same address from whom the assessee had made the purchase of bricks during the year under consideration. However, no reply was given by them. Ld. A.O. gave reasonable opportunity of being heard on 08.03.2006 on this issue as to why the purchases made from both the persons should not be treated as bogus. vide order sheet entry dated 16.03.06, 21.03.06, 22.03.06 23.03.06, the assessee was asked to furnish its reply in this regard. However, no reply had been submitted in this regard. Therefore, A.O. treated purchases of bricks of ₹ 5,04,567/- bogus and accordingly, addition was made at ₹ 5,04,567/-. 7. The assessee carried the matter before the CIT(A). The assessee filed additional evidence which was forwarded to the Assessing Officer for her comment. In her remand report dated 09.08.2007, she had objected to the admission of additional evidence and it was submitted by the A.O. that on inquiry made in respect of these purchases, they were not found in existence. The appellant was given several opportunities but no compliance was made by the assessee before the A.O. at the time of assessment proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Baroda and Zankhar is a remote area and 440km. from Jamnagar situated at Dwarka National Highway. The appellant could not make their contract immediately during the very short span of time of about 15 days from 08.03.2006 to 23.03.2006. At the time of remand report, the ld. A.O. had recorded the statement on oath of three brick suppliers and they had accepted the supply of bricks at SMPL contract at Vadinar Dist. Jamnagar. They had accepted the payment had been received by the cheque and in cash from the assessee. Ld. A.O. had not commented on any affidavits filed by the three bricks suppliers. The assessee also had various evidences of contract receipts credited on IOCL (SMPL), project of Vadinar. He further relied upon various case laws: i. Rajmoti Industries vs. Income Tax Officer, (1995) 51 TTJ (Ahd) 355 ii. CIT vs. Kumari Satya Setia, (1983) 143 ITR 486 (MP) iii. Mahavir Prasad Gupta vs. JCIT (2006) 100 TTJ (Del) 1078 iv. Sikander Publishing (P) Ltd. vs. DCIT (2003) 81 TTJ (Del) 249. Accordingly, he requested to allow to file the additional evidence under Rule 29. At the outset, ld. Sr. D.R. vehemently opposed the additional evidence filed by the assessee on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pended in cash and are not verifiable. On the other hand it is also a fact that some expenditure in cash in this line of business is inevitable. Considering the fact in totality disallowance is restricted to ₹ 30,000/-. 12. Now assessee is before us. Ld. A.R. submitted that labourers had been employed at the remote site of contract. The labourers are mostly illiterate persons. Hence, it was necessary to prepare the self made cash vouchers. All the expenses had been incurred for business purposes. He prayed to allow full expenses. At the outset, ld. Sr. D.R. supported the order of the CIT(A). We have carefully considered the order of the lower authorites and arguments of the assessee. The total labour charges debited by the assessee more than ₹ 59 lacs and it is admitted fact that the cash payments were made to the labourers. The ld. CIT(A) was reasonable to restrict the disallowance at ₹ 30,000/-. Therefore, we do not find any reason to intervene in the order of the CIT(A). Accordingly, we confirm the order of the CIT(A). 13. In the result, assessee s appeal is partly allowed. This Order pronounced in open Court on 20/12/2013 - - TaxTMI - TMITax - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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