M/s. Radiant Hitech Engg. Pvt. Ltd., Ahmedabad V. The ACIT, Circle-4, Baroda

ITA 1948/AHD/2014

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0807 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-09-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 26-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANIL R SHAH; KINJAL SHAH ARS
• Keywords: Set aside
• Section: 271(1)(c)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ITA NO. 1948/AHD/2014 ( / ASSESSMENT YEAR : 2010-11) M/S.RADIANT HITECH ENGG.PVT.LTD. 5A, 5 TH FLOOR, NEPTUNE TOWER PRODUCTIVITY ROAD ALKAPURI, VADODARA / VS. ASST.COMMISSIONER OF INCOME TAX CIRCLE-4 BARODA ./ ./ PAN/GIR NO. : AADCR 5483 Q ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI ANIL R.SHAH & MS. KINJAL SHAH, ARS / RESPONDENT BY : SHRI SATISH SOLANKI, SR.DR / DATE OF HEARING 30/09/2019 !'# / DATE OF PRONOUNCEMENT 18/12/2019 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)III, BARODA [CIT(A) IN SHORT] VIDE APPEAL NO.CIB/III-008 /2013-14 DATED 22/05/2014 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS 'TH E ACT') DATED 11/03/2013 RELEVANT TO ASSESSMENT YEAR (AY) 2010-1 1. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ITA NO.1948/AHD/2014 RADIANT HITECH ENGG.PVT.LTD. VS. ACIT ASS T.YEAR 2010-11 - 2 - 1. (A) THE CIT(A) HAS ERRED BOTH IN LAW AND IN FACT IN CONFIRMING DISALLOWANCE OF RS.47,07,974/- MADE BY ASSESSING OF FICER OUT OF LABOUR CHARGES EXPENSES A/C. IT IS SUBMITTED BY YOUR APPELLANT THAT HE HAS BEEN MAINTAINING REGULAR AND PROPER BOOKS OF ACCOUNTS DULY AUDITED AND ALL EXPEN SES SUPPORTED BY VOUCHERS, BILLS, REGISTERS ETC. AND THE ASSESSING O FFICER NOT HAVING FOUND ANY LACUNA OR MISTAKE IN BOOKS OF ACCOUNTS HE OUGHT TO HAVE ALLOWED ENTIRE LABOUR CHARGES AS CLAIMED BY THE APPELLANT. (B) IT IS SUBMITTED THAT IN VIEW OF FACTS OF THE C ONSIDER PROVISIONS OF LAW ENTIRE LABOUR EXPENSES HAVING BEEN INCURRED DURING COURSE OF BUSINESS OF PURPOSES OF BUSINESS AND IT BEING REASONABLE AS PER NEED OF BUSINESS THE DISALLOWANCE OF RS.47,07,974/- BE DELETED. IT IS THEREFORE SUBMITTED THAT RELIEF CLAIMED ABOVE BE ALLOWED AND THE ORDER OF THE ASSESSING OFFICER BE MODIFIED ACCORDINGLY. YOUR APPELLANT RESERVES RIGHT TO ADD, ALTER, AMEND TO WITHDRAW ANY OR ALL GROUND OF APPEAL. 3. THE ONLY ISSUE RAISED BY THE ASSESSEE IS THAT T HE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF 47,07,974.00 ON ACCOUNT OF LABOUR EXPENSES. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF MECHANICAL A ND ENGINEERING JOB WORK. THE ASSESSEE IN ITS BUSINESS HIRED TWO TYPES OF LABOURS I.E. PERMANENT LABOURS/STAFF AND TEMPORARY LABOURS. THE ASSESSEE HAS PAID MONTHLY SALARY OF 12,000 TO ITS PERMANENT LABOURS WHEREAS IT HAS PAI D MONTHLY SALARY AS HIGH AS 18,250 TO ITS TEMPORARY L ABOURS. ACCORDINGLY, THE AO SOUGHT JUSTIFICATION FROM THE ASSESSEE FOR P AYING MORE SALARY TO ITA NO.1948/AHD/2014 RADIANT HITECH ENGG.PVT.LTD. VS. ACIT ASS T.YEAR 2010-11 - 3 - THE TEMPORARY LABOURS THAN THE PERMANENT LABOURS VI DE NOTICE DATED 18 TH FEBRUARY 2013. 4.1. THE ASSESSEE IN RESPONSE TO SUCH NOTICE SU BMITTED THAT IT IS PROVIDING MECHANICAL AND ENGINEERING JOB WORK SERVI CES ON CONTRACT BASIS TO THE REFINERIES/PETROCHEMICALS COMPANIES SU CH AS IPCL, IOCL, GAIL ETC AT THE SITE OF THE CUSTOMERS. THESE SERVIC ES REQUIRE HUGE MANPOWER WHICH IS HIGHLY SKILLED AND EXPERIENCED. S UCH MANPOWER IS ENGAGED FOR THE SHORT DURATION TILL THE COMPLETION OF THE WORK ASSIGNED BY THE COMPANIES. 4.2. THE ASSESSEE FURTHER FILED THE MONTHLY SU MMARY DEPICTING THE NAME OF THE LABOURS, SITE WISE PAYMENT DETAILS, DAI LY WAGES RATE, PF AND PROFESSIONAL TAX DEDUCTIONS. THE ASSESSEE ALSO SUBM ITTED THAT THE DIFFERENT TEMPORARY LABOURS WERE PAID WAGES AT DIFF ERENT RATES AS DETAILED UNDER: I. 416 LABOURS WERE PAID IN THE RANGE OF RS. 475 TO 50 5 DAILY WAGES II. 189 LABOURS WERE PAID IN THE RANGE OF RS. 515 TO 57 5 DAILY WAGES III. 239 LABOURS WERE PAID IN THE RANGE OF RS. 600 TO 75 0 DAILY WAGES INCLUDING THE AMOUNT OF COMPENSATION FOR THE OVERTI ME. 4.3. THE ASSESSEE ALSO SUBMITTED THAT THE LABOUR ERS WERE WORKING UNDER HIGHLY HAZARDOUS CONDITIONS INVOLVING HIGHER RISK T O THEIR LIFE. 4.4. THE PAYMENTS OF THE WAGES WAS MADE IN CA SH AS THE LABOURERS WERE WORKING IN THE AREA OF REMOTE SITES AND THEY D ID NOT MAINTAIN ANY ITA NO.1948/AHD/2014 RADIANT HITECH ENGG.PVT.LTD. VS. ACIT ASS T.YEAR 2010-11 - 4 - BANK ACCOUNT BUT THE WAGES WAS PAID UNDER THE RESPO NSIBILITY OF THE SUPERVISOR. THE PAYMENT OF WAGES WAS ALWAYS PAID DI RECTLY IN THE HANDS OF THE LABOURERS WHICH WERE DULY ACKNOWLEDGED BY TH EM BY PUTTING THE INITIAL ON THE WAGES PAYMENT REGISTER. 4.5. THE ASSESSEE ALSO SUBMITTED THAT THE NET PROFIT FOR THE YEAR UNDER CONSIDERATION DECLARED BY IT WAS COMPARATIVELY HIGH ER THAN THE EARLIER YEARS. SIMILARLY THE LABOUR EXPENSES INCURRED BY IT IN THE YEAR UNDER CONSIDERATION ARE COMPARATIVELY LOWER THAN THE IMME DIATE PRECEDING ASSESSMENT YEAR. 4.6. IN VIEW OF THE ABOVE THE ASSESSEE CLAIME D THAT THE GENUINENESS OF THE WAGES EXPENSES CANNOT BE DOUBTED AND THEREFORE IT CANNOT BE SAID THAT THE LABOUR EXPENSES HAVE BEEN INFLATED TO SUPPRESS THE PROFIT. 4.7. HOWEVER, THE AO WAS OF THE VIEW THAT THE S ALARY PAID TO THE PERMANENT EMPLOYEES WHO ARE EDUCATED AND IMPORTANT PERSONS FOR THE ORGANIZATIONS. THEREFORE, THE SALARY PAID TO THEM C AN BE TAKEN AS BENCHMARK FOR DECIDING THE SALARY PAID TO THE TEMPO RARY LABOURERS. AS PER THE AO THE PAYMENT TO THE PERMANENT STAFF WAS M UCH LOWER THAN THE RATE OF SALARY/WAGES PAID TO THE TEMPORARY LABOURS. ACCORDINGLY HE OPINED THAT THE RATE OF SALARY PAID TO THE TEMPORAR Y STAFF IN EXCESS TO THE PERMANENT STAFF, WHO ARE MORE QUALIFIED AND EXPERIE NCED, IS UNREASONABLE. ITA NO.1948/AHD/2014 RADIANT HITECH ENGG.PVT.LTD. VS. ACIT ASS T.YEAR 2010-11 - 5 - 4.8. THE PAYMENT OF PROFESSIONAL TAX AND PF O N THE AMOUNT OF WAGES PAID TO THE TEMPORARY STAFF DOES NOT JUSTIFY THE RA TE OF SALARY PAID TO THEM. SIMILARLY, THE AMOUNT OF NET PROFIT DECLARED BY THE ASSESSEE CANNOT JUSTIFY THE REASONABLENESS OF THE WAGES PAID TO THE TEMPORA RY STAFF AS THE WORK ORDER OF ONE YEAR MIGHT BE EXECUTED IN THE ANOTHER YEAR. 4.9. THE AO IN VIEW OF THE ABOVE, THE AO WOR KED OUT THE EXCESSIVE SALARY PAID TO THE TEMPORARY STAFF BY OBSERVING AS UNDER: 3.6. FROM THE SUBMISSION FILED BY THE ASSESSEE, I T IS EVIDENT THAT OUT OF 7303 WORKERS HIRED DURING THE YEAR, 2245 WORKERS WERE CL AIMED TO HAVE BEEN PAID WAGES IN THE RANGE OF 450/- TO 800/-, WHEREAS 5058 WORKERS WERE CLAIMED TO HAVE BEEN PAID WAGES IN THE RANGE OF 250/- TO 445/-. CONSIDERING THE NATURE OF BUSINESS OF THE ASSESSEE, THE WAGES IN TH E TUNE OF 250/- TO 455/- PER DAY CAN BE TREATED AS REASONABLE AND ACCEPTABLE , ALTHOUGH THE ASSESSEE MIGHT HAVE ENGAGED HELPERS AND UNSKILLED LABOURERS FOR WHOM THE PAYMENT OF 250/- IS NOT AT PAR WITH THE PREVAILING PRACTICE AN D NORMS OF PAYMENT. THE CLAIM OF THE ASSESSEE TO THIS EXTENT IS ACCEPTABLE. HOWEVER, THE CLAIMS OF PAYMENTS OF 450/- AND ABOVE PER DAY TO MECHANICAL WORKERS DOES NTO HAVE ANY JUSTIFICATION AND THE SAME IS RATHER CONTRADICT ORY TO THE CLAIM OF THE ASSESSEE FOR PAYMENT OF SALARY TO ITS PERMANENT EMP LOYEES. FROM THE DETAILS SUBMITTED BY THE ASSESSEE, IT IS APPARENT THAT OUT OF 7303 WORKERS HIRED DURING THE YEAR 5058 WERE PAID IN THE RANGE OF 250/- TO 445/- PER DAY WHICH CONSTITUTES 69% OF THE WORKERS HIRED DURING THE YEA R WHEREAS 2245 WORKERS WERE CLAIMED TO HAVE BEEN PAID IN THE RANGE OF 470/- TO 750/- PER DAY WHICH CONSTITUTES 31% OF THE WORKERS HIRED. EVEN IF, IT IS CONSIDERED THAT SOME OF THE MECHANICAL WORKERS WOULD BE COMPETENT AND SKILL ED FOR SPECIALIZED JOB TO WHOM PAYMENT MIGHT HAVE BEEN MADE ABOVE 500/- PER DAY, THE SAME CANNOT CONSTITUTE 31% OF THE TOTAL HIRED WORKER FORCE. CO NSIDERING THE FACTS AND CIRCUMSTANCES IN TOTALITY, I AM OF THE CONSIDERED O PINION THAT CLAIMS OF PAYMENT TO AT LEAST 40% OF THE WORK FORCE IS EXCESS IVE AND NOT JUSTIFIED BY THE REASONING PROVIDED BY THE ASSESSEE AND IN THE FACTS AS APPARENT FROM RECORD. 3.7. THE TOTAL WAGES CLAIMED DURING THE YEAR AMOU NTS TO 8.23 CRORES. OUT OF WHICH 1,25,10,496/- AMOUNTS TO PAYMENT OF SALARY TO PERMA NENT EMPLOYEES AND BALANCE 6,98,80,983/- AMOUNTS TO PAYMENT TOWARDS WAGES. ITA NO.1948/AHD/2014 RADIANT HITECH ENGG.PVT.LTD. VS. ACIT ASS T.YEAR 2010-11 - 6 - AS DISCUSSED EARLIER, 40% OF WAGES WHICH FALLS IN T HE CATEGORY OF DAILY PAYMENT OF 450/- TO 800/- AMOUNT TO 2,35,39,868/-, HAS BEEN FOUND AS EXCESSIVE IN THE FACTS AND CIRCUMSTANCES OF THE CAS E. CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE FACTS AS DISCUSS ED ABOVE, 20% OF THE SALARY IN THIS CATEGORY IS HELD AS EXCESSIVE AND ACCORDING LY THE AMOUNT WHICH COMES TO 47,07,974/- IS ADDED BACK THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) IS INITIATED FO R CONCEALMENT OF PARTICULARS OF INCOME. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARN ED CIT(A) WHO CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER : 4.3. I HAVE CONSIDERED THE APPELLANTS SUBMISSIONS AND THE ASSESSING OFFICERS OBSERVATIONS. THE ASSESSING OFFICER HAS ANALYZED THE PAYMENTS MADE BY THE APPELLANT TO DAILY WAGE EARNERS IN HIS ASSESSMENT ORDER. THE APPELLANT HAS SUBMITTED ITS REPLY ON THE OBSERVATIO NS MADE BY THE ASSESSING OFFICER IN HIS ORDER. BUT NO REPLY HAS BEEN SUBMIT TED ON THE MOST IMPORTANT OBSERVATION MADE BY THE ASSESSING OFFICER IN PARA 3 .3 OF HIS ORDER WHICH IS AS FOLLOWS: IT IS MOST IMPORTANT TO NOTE THAT ALL THE PAYMENTS CLAIMED TO HAVE BEEN MADE IN RESPECT OF WAGES HAVE BEEN MADE IN CASH. THIS M AY HAVE BEEN REQUIRED BECAUSE OF CIRCUMSTANCES OF THE BUSINESS OF THE ASS ESSEE, BUT THE FACT REMAINS THAT APART FROM SOME NON-DISCREET AND OBSCURE SIGNA TURES ON VOUCHERS AND REGISTERS, THERE IS NO OTHER EVIDENCE FOR SUCH PAYM ENTS. THE ASSESSEE DO NOT HAVE ADDRESSES OF THESE INDIVIDUALS AND IT IS NOT I N THE POSITION TO PRODUCE THEM FOR GIVING EVIDENCE. 4.3.1. THE FAILURE OF THE APPELLANT IS CONTRADICTOR Y TO ITS RELIANCE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS DURING THE COURSE OF APPELLANT PROCEEDINGS ON THE FACT THAT IT HAD DEDUCTED PROVID ENT FUND AND PROFESSIONAL TAX ON ENTIRE PAYMENT ON SUCH LABOUR CHARGES. THE APPELLANT HAD ALSO PRODUCED THE WORKING SHEETS AND CHALLANS OF STATUTO RY DUES PAID IN SUPPORT OF SUCH CLAIMS BEFORE THE ASSESSING OFFICER FOR VERIFI CATION. FURTHER, IN THE SUBMISSION MADE DURING THE APPELLATE PROCEEDINGS, I T HAS BEEN FURTHER CLAIMED THAT ESI CONTRIBUTIONS WERE ALSO MADE ON SU CH PAYMENTS. FOR MAKING CONTRIBUTION / DEDUCTION OF PF, ESI AND PROF ESSIONAL TAX, A PERSON IS REQUIRED TO MAINTAIN ENTIRE DETAILS OF THE PERSONS FOR WHOM SUCH DEDUCTIONS / ITA NO.1948/AHD/2014 RADIANT HITECH ENGG.PVT.LTD. VS. ACIT ASS T.YEAR 2010-11 - 7 - CONTRIBUTIONS ARE BEING MADE. IN THE ABSENCE OF SU CH DETAILS, NO SUCH DEDUCTION / CONTRIBUTION CAN BE MADE BY ANY EMPLOYE R. HENCE, THE APPELLANTS CLAIM THAT IT DOES NOT HAVE DETAILS LIK E ADDRESSES OF SUCH LABOURERS IS NOT BELIEVABLE. 4.3.2. AS ALREADY STATED BY THE ASSESSING OFFICER, SEVERAL SUCH LABOURERS HAVE BEEN PAID OVER AND ABOVE MINIMUM WAGES. IN TH E SHOW CAUSE NOTICE ISSUED TO THE APPELLANT, THE ASSESSING OFFICER HAD MENTIONED THAT IN THE SALARY REGISTER THERE WAS NO SPECIFICATION AS TO WHETHER T HE INDIVIDUALS WHO WERE PAID HIGHER WAGES ARE QUALIFIED TECHNICIANS OR GENE RAL LABOURERS. THE ASSESSING OFFICER HAS ANALYZED THE WAGE PAID TO SUC H PERSONS AND HAS HELD THAT THE CLAIM OF THE APPELLANT OF RS.450 AND ABOVE PER DAY TO THE TECHNICAL WORKERS DOES NOT HAVE ANY JUSTIFICATION AND THE SAM E IS RATHER CONTRADICTORY TO THE CLAIM OF SALARY TO ITS PERMANENT EMPLOYEES. FROM THE DETAILS FURNISHED, THE ASSESSING OFFICER HAS CONCLUDED THAT 2245 WORKE RS WERE CLAIMED TO HAVE BEEN PAID IN THE RANGE OF RS.470/- TO RS.750/- PER DAY WHICH CONSTITUTES 35% OF THE WORKERS HIRED. ON THE BASIS OF SUCH ANALYSI S, THE ASSESSING OFFICER HAS DISALLOWED 20% OF WAGES WHICH FALLS IN THE CATEGORY OF DAILY PAYMENTS OF RS.450/- TO RS.800/- AMOUNTING TO RS.2,35,39,868/-. THE APPELLANT IN ITS REPLY HAS CHANGED THE CRITERIA ADOPTED BY THE ASSESSING O FFICER AND HAS STATED THAT THE TOTAL NUMBER OF LABOURERS TO WHOM THE PAYMENT M ADE IN THE RANGE OF RS.500/- TO RS.750/- PER DAY MADE WAS ONLY TO THE T UNE OF 607 NOS. BUT THIS SMALLER NUMBER HAS BEEN COMPUTED BY CHANGING THE LO WER RANGE FROM RS.450/- AS ADOPTED BY THE ASSESSING OFFICER TO RS. 500/- WITHOUT ANY JUSTIFICATION. 4.3.3. THUS, THE APPELLANT HAS FAILED TO JUSTIFY TH E HIGHER PAYMENTS MADE TO DAILY WAGE LABOURERS ON THE BASIS OF DOCUMENTARY E VIDENCE. THE PF, PROFESSIONAL TAX AND ESI ALLEGEDLY PAID BY THE APPE LLANT CAN ONLY BE EVIDENCE OF THE NUMBER OF WORKERS EMPLOYED BY IT AND NOT THE GENUINENESS OF PAYMENTS MADE TO SUCH WORKERS. THE WORKERS TO WHOM PAYMENTS AT HIGHER RATES HAVE BEEN DONE BY THE APPELLANT ARE SKILLED LABOURERS AS ACCEPTED BY THE APPELLANT ITSELF AND IN SUCH CASE THEIR ENTIRE DETAILS MUST H AVE BEEN AVAILABLE WITH THE APPELLANT WHICH HAVE NOT BEEN PRODUCED FOR CROSS VE RIFICATION BY THE ASSESSING OFFICER. HENCE, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS UPHELD AND THE APPEAL IS DISMISSED. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.1948/AHD/2014 RADIANT HITECH ENGG.PVT.LTD. VS. ACIT ASS T.YEAR 2010-11 - 8 - 5. THE LEARNED AR BEFORE US FILED A PAPER BOOK R UNNING FROM PAGES 1 TO 23 AND SUBMITTED THAT THE PAYMENT TO THE LABOURERS WERE PAID DIRECTLY UNDER THE SUPERVISION OF THE SUPERVISOR AFTER DEDUC TING THE PROFESSIONAL AND PF AMOUNT ON THE WAGES PAID TO THEM. THE LEARNE D AR ALSO CLAIMED THAT THE ITAT IN THE EARLIER YEAR HAS DELETED THE A DDITION MADE BY THE AO IN ITS OWN CASE BEARING ITA NO. 2238/AHD/20124 FOR THE ASSESSMENT YEAR 2008-09 VIDE ORDER DATED 6 DECEMBER 2016. 6. ON THE OTHER HAND, THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ENTI RE BASIS OF THE DISALLOWANCE MADE BY THE AO WHICH WAS CONFIRMED SUB SEQUENTLY BY THE LEARNED CIT (A) WAS THAT THE ASSESSEE HAS PAID MORE WAGES TO THE TEMPORARY LABOURS THAN THE PERMANENT STAFF. AS PER THE AO THE PERMANENT STAFF WAS MORE QUALIFIED AND EXPERIENCED THAN THE T EMPORARY LABOURERS. FROM THE PRECEDING DISCUSSION WE NOTE THAT ADMITTED LY THE PAYMENT OF THE WAGES TO THE TEMPORARY LABOURERS WAS MADE AFTER THE DEDUCTION OF PROFESSIONAL TAX AND THE PF AS EVIDENT FROM THE ORD ER OF THE AO. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED AS UNDE R: ITA NO.1948/AHD/2014 RADIANT HITECH ENGG.PVT.LTD. VS. ACIT ASS T.YEAR 2010-11 - 9 - 3.5. THE CONTENTION OF THE ASSESSEE THAT PROFESSI ONAL TAX AND PF HAS BEEN PAID IN RESPECT OF WAGES DOES NOT IN ANY WAY JUSTIF Y THE CASE OF THE ASSESSEE AS IT AT BEST CAN BE AN EVIDENCE FOR NUMBER OF PERSONS ENGAGED DURING THE YEAR. HOWEVER, IN THE CASE OF THE ASSESSEE, IT IS NOT THE NUMBER OF WORKERS ENGAGED IS UNDER QUESTION, BUT THE AMOUNT OF WAGES CLAIMED TO HAVE BEEN PAID. 7.1. THUS, FROM THE ABOVE WE HOLD THAT THE GENUIN ENESS OF THE PAYMENT OF THE WAGES TO THE TEMPORARY STAFF CANNOT BE SUSPE CTED AS IT WAS SUBJECT TO PROFESSIONAL TAX AND PROVIDENT FUND. ONCE THE GE NUINENESS OF THE EXPENSES IS ESTABLISHED, THEN IN OUR CONSIDERED VIE W THE AO CANNOT OCCUPY THE ARMCHAIR OF THE ASSESSEE AND DIRECT IT T O MAKE THE PAYMENT OF WAGES AT PARTICULAR RATE. AS SUCH IT WAS THE WISDO M OF THE ASSESSEE FOR MAKING THE PAYMENT OF THE WAGES AT THE PARTICULAR R ATE WHICH CANNOT BE QUESTIONED BY THE AO. 7.2. WE ALSO NOTE THAT IN THE SIMILAR FACTS A ND CIRCUMSTANCES THE DISALLOWANCE MADE BY THE AO IN THE CASE OF THE ASSE SSEE IN THE EARLIER ASSESSMENT YEAR I.E. 2008-09 WAS DELETED BY THIS TR IBUNAL AS DISCUSSED ABOVE. THE RELEVANT EXTRACT OF THE ORDER IS EXTRACT ED BELOW: 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED T HE MATERIAL ON RECORD CAREFULLY. WE NOTICED THAT THE ASSESSIN G OFFICER HAD DISALLOWED RS. 35,97,667/- OUT OF WAGES PAID CONSIDERING THE SAME AS EXCESSIVE. THE ASSESSING OFFICER SIMPLY DISALLOWED 20% OF THE WAGE PAYMENT OF OUT OF RS. 1,79,88,336/- AS EXCESSIVE WITHOUT SUPPORTING MATER IAL AND EVIDENCES TO PROVE THAT THE PAYMENT MADE TO SKILLED WORKERS WAS EXCE SSIVE. THE ASSESSING OFFICER HAS NOT DISPROVED THE SUPPORTING VOUCHERS AND REGISTERS MAINTAINED BY THE ASSESSEE AND OTHER RELATED SUPPORTIN G RECORD MAINTAINED LIKE PROVIDENT FUND AND ESI CONTRIBUTIONS INDICATING THE GENUINENESS OF THESE EXPENSES. THE OBSERVATION MADE BY THE ASSESSING OF FICER ABOUT EXCESSIVE WAGE PAYMENT WAS OF GENERAL NATURE IGNORING THE FAC T THAT WAGES WERE PAID ON THE BASIS OF NUMBER OF WORKING DAYS. THE ASSESSI NG OFFICER HAD NOT ITA NO.1948/AHD/2014 RADIANT HITECH ENGG.PVT.LTD. VS. ACIT ASS T.YEAR 2010-11 - 10 - CONSIDERED THE FACT THAT THE NATURE OF THE BUSINESS OF THE ASSESSEE RELATE TO JOB WORK OF MECHANICAL AND ENGINEERING ON CONTRACT BASIS WITH ORGANIZATION LIKE REFINERIES .PETROCHEMICALS SU CH AS IPCL IOCL GAIL. SOME OF THE JOBS WERE OF HIGHLY LABOR INTENSIVE IN VOLVING SKILLED AND EXPERIENCED PHYSICAL LABOUR FORCE AT THE SITE OF T HE WORK. IN VIEW OF THE ABOVE STATED FACTS AND CIRCUMSTANCES, WE CONSIDERED THAT ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING DISALLOWANCE OF RS.35,97,667/- WITHOUT ANY SUPPORTING MATERIAL AND EVIDENCE, THEREFORE, WE UPHOLD THE DEC ISION OF THE LD. COMMISSIONER OF INCOME TAX(A). 7.3. AT THE TIME OF HEARING, THE LEARNED DR HAS N OT BROUGHT ANYTHING ON RECORD SUGGESTING THAT THE FACTS INVOLVED IN THE PR ESENT CASE ARE DIFFERENT WITH THE OWN CASE OF THE ASSESSEE FOR THE ASSESSMEN T YEAR 2008-09. THEREFORE, IN OUR CONSIDERED VIEW THE PRINCIPLES LA ID DOWN BY THIS TRIBUNAL IN THE OWN CASE OF THE ASSESSEE ARE SQUARE LY APPLICABLE TO THE CASE ON HAND. ACCORDINGLY, RESPECTFULLY FOLLOWING T HE SAME WE SET ASIDE THE FINDING OF THE LEARNED CIT-A AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. HENCE THE GROUND OF APPEAL OF THE ASSE SSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON /12/2019 SD/- SD/- ( KUL BHARAT ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 18/12/2019 &.., .(.. / T.C. NAIR, SR. PS ITA NO.1948/AHD/2014 RADIANT HITECH ENGG.PVT.LTD. VS. ACIT ASS T.YEAR 2010-11 - 11 - !'#' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-III,. BARODA 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 02.12.2019 ( WORD PROCESSED BY HONBLE AM IN HIS COMPUTER BY DRA GON ) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 02.12.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.18.12.2019 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 18.12.2019 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER