Case Law Details
On perusal of the same it is seen that no reasoning or basis for making disallowance has been made apart from suspicions. The said action has been upheld by the CIT(A). On consideration of the entire facts and materials and the settled legal position, I am of the view that the said action cannot be supported in law as in the face of fully vouched and verifiable expenses, as per the claim of the assessee, which has not been rebutted by the revenue and where the assessee has maintained the Attendance Register of labourers shown the ledger account of labour charges and office expenses, which were all duly produced before the AO and also placed before us which contained the details of wages paid to and accepted by the labourers, no defect in the same has been pointed by the revenue. The action to make the ad hoc disallowance @5% qua the same and 10% in the case of office expenses on the reasoning that “to curb the possibility of revenue leakage” and “seems excessive” respectively is arbitrary which cannot be supported in law. Hence, addition so made of these disallowances by the AO, which has been upheld by the CIT(A), cannot be sustained. Accordingly, ground nos. 2 and 3 are allowed. In regard to ground no.1, which has been half-heartedly argued by the ld. A.R., the same is rejected and the department’s argument in this regard stands accepted. Therefore, the appeal of the assessee is partly allowed.
INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH: KOLKATA
I.T.A. No.817/Kol/2012 – Assessment Year: 2008-09
Delta Construction –Vs.- ITO
Date of pronouncing the Order: 22.08.2012
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