Carreg Commodities Pvt. Ltd. Vs ITO (ITAT Bangalore)
Assessee is a company engaged in the activity of trading in agricultural produce & filed its return of income. During the course of assessment proceedings, the assessee did not comply the earlier notices & notice u/s. 144 was issued which was responded to. AO found that assessee has debited Coolie & Labour charges of Rs.34,60,350 & also farm expenses of Rs.3,81,124 for which no documentary evidences were available & therefore disallowed the same in the assessment order passed u/s. 144.
Before CIT(A), assessee filed application for additional evidence with respect to vouchers & details of Coolie & Labour charges & farm expenses. CIT(A)asked for the remand report & in the remand report AO submitted that assessee has filed copies of bills of above expenditure. MD of the company was called for by the AO to furnish the original bills which were produced by the assessee before AO along with explanatory note. AO held the Coolie & Labour charges of Rs.34,60,350 represents payments made to unskilled labour for loading & unloading of the products. AO was of the view that there are no bills in respect of these expenditure & only self-made vouchers are prepared. He also confirmed that expenditure of this nature is common in this kind of business. With respect to farm expenditure, it was found to be primarily cost related to enhanced cultivation & maintenance of crops. The income from this farm was already included in the revenue of the assessee. When the vouchers were produced, AO held that these are self-made vouchers for purchase of manure & other labour expenses. The finding of the AO is that these expenses appears to be reasonable. However, CIT(A)confirmed both the above additions & assessee is in appeal.
