DCIT Vs Classic Marble Co. Pvt Ltd (ITAT Mumbai)
ITAT Mumbai held that the addition of non genuine labour expenses u/s 37 of the Income Tax Act is unwarranted as assessee has proved the genuineness of the payment of labour charges.
Facts- The assessee company is engaged in the business of import of rough marble blocks, marble slabs, granite slabs and tiles. It is also engaged in the business of manufacture of artificial marble and power generation. The Revenue carried out search and seizure operation u/s. 132 of the Income Tax Act, 1961 in the hands of the assessee on 14-02-2019. Survey actions were also conducted u/s. 133A of the Act in the hands of related cases.
During the course of search/survey operations, it was noticed that the assessee has paid labour charges to three concerns. Post investigation, AO came to the conclusion that the labour charges paid to the concerns were also not genuine. Accordingly, the AO disallowed the labour charges paid to these three concerns.
CIT(A) deleted the addition. Being aggrieved, the present appeal is filed by the revenue.
Conclusion- Held that the Ld CIT(A) has examined all the deficiencies that were pointed out by the AO in order to disallow the claim of labour charges and concluded that they do not survive in view of the evidences furnished by the assessee. Accordingly, the Ld.CIT(A) has held that the assessee has proved the genuineness of payment of labour charges and hence there was no sufficient reason to disbelieve the claim and disallow the same. Accordingly, in the facts and circumstances of the case, we find that the reasoning given by the Ld.CIT(A) and the decision taken by him are justifiable. Before us, the revenue could not furnish any material to show the perversity, if any, in the order passed by Ld.CIT(A) not they could furnish any material to contradict findings given by him on the basis of materials that were furnished before the AO. Accordingly, we confirm the order passed by Ld.CIT(A) on this issue in all the years under consideration.
