The ITO, Ward-9(2), Ahmedabad V. M/s. Buildcon Engineers, Ahmedabad

ITA 2648/AHD/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1164 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 21-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AND ITA NO AHD ITOADDL CI
• Keywords: Rejection of books of accounts; Additional evidence
• Section: 133(6)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , , BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. ./ I.T.A. NO.2648/AHD/2011 A.Y. 2008-09 2. ./ I.T.A. NO.2490/AHD/2011 A.Y. 2008-09 1. THE ITO WARD-9(2) AHMEDABAD 2. M/S.BUILDCON ENGINEERS, AHMEDABAD / VS. 1. M/S.BUILDCON ENGINEERS 5-B, VISHWA BHARTI SOCIETY B/H.NAVRANGPURA TELE.EXCH ELLISBRIDGE AHMEDABAD-380 006. 2. THE ADDL.CIT RANGE-9 AHMEDABAD ./ ./ PAN/GIR NO. AABFB 5648 L ( ' / APPELLANTS ) .. ( #' / RESPONDENTS ) REVENUE B Y : SHRI P.L. KUREEL,SR.D.R. ASSESSEE B Y : SHRI S.N.SOPARAKAR, A.R. WITH SHRI VIJAY L.SHAH, CA $%& ' ( / DATE OF HEARING 15/07/2015 )*+ ' ( / DATE OF PRONOUNCEMENT 21/08/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THESE CROSS-APPEALS BY THE REVENUE AND THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XV, AHMEDABAD [CIT(A) IN SHORT] DATED 30/08/2011 PER TAINING TO ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 2 - ASSESSMENT YEAR (AY) 2008-09. THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED O RDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE REVENUES APPEAL IN ITA NO .2648/AHD/2011 FOR AY 2008-09. THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL:- 1) THE LD.COMMISSIONER OF INCOME-TAX(APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITI ON TO THE EXTENT OF RS.9,68,951/- AND GRANTING RELIEF OF RS.27,43,711/- ON ACCOUNT OF UNDISCLOSED TURNOVER DIFFERENCE IN GROSS RECEIPTS. 2) THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWA NCES OF RS.15,52,560/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF BOGUS LABOUR PAYMENTS. 3) THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN ADMITTING ADDITIONAL E VIDENCES IN VIOLATION OF RULE 46A. 4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDAB AD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 5) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE L D.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 3 - 2.1. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 27/12/2010, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION ON ACCOU8NT OF DIFFERENCE IN GROSS RECEIPT S OF RS.37,12,662/-, DISALLOWANCE OF LABOUR PAYMENTS OF RS.11,50,254/- A ND RS.15,52,560/- RESPECTIVELY AND DISALLOWANCE OF MACHINE REPAIR OF RS.5,000/- AND DISALLOWANCE OF SUPERVISION CHARGE OF RS.20,000/-. AGAINST THE SAID ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, PARTLY ALLOWED THE APPEAL; THEREBY THE LD.CIT(A) RESTRICTED THE DIFFER ENCE IN GP TO THE EXTENT OF RS.9,68,951/- AND DELETED THE BALANCE AMOUNT. F URTHER, THE LD.CIT(A) UPHELD THE DISALLOWANCE OF LABOUR PAYMENTS OF RS.11 ,50,254/- AND DELETED THE DISALLOWANCE OF LABOUR PAYMENTS OF RS.1 5,52,560/- AND CONFIRMED THE ADDITION(S) OF RS.5,000/- AND RS.20,0 00/- MADE ON ACCOUNT OF ADHOC DISALLOWANCE OF EXPENDITURE. AGAINST THE ORDER OF THE LD.CIT(A), NOW THE REVENUE AND THE ASSESSEE BOTH AR E IN CROSS-APPEALS BEFORE US. 3. FIRST GROUND OF REVENUES APPEAL IS AGAINST REST RICTING THE ADDITION OF RS.9,68,951/- MADE ON ACCOUNT OF UNDISCLOSED TUR NOVER DIFFERENCE IN GROSS RECEIPTS. THE LD.SR.DR VEHEMENTLY ARGUED THA T THE LD.CIT(A) WAS ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 4 - NOT JUSTIFIED IN RESTRICTING THE ADDITION. HE SUBM ITTED THAT BEFORE THE AO, THE ASSESSEE WAS UNABLE TO RECONCILE THE GROSS RECE IPTS. HE SUBMITTED THAT UNDER THESE FACTS, THE LD.CIT(A) WAS NOT JUSTIFIED IN RESTRICTING THE ADDITION. 3.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT WAS CATEGORICALLY SUBMITTED BEFORE THE AUTHORITIES BELO W THAT THE ASSESSEE CARRIED OUT CONSTRUCTION WORK OF M/S.ANKUR TEXTILES (A DIVISION OF ARVIND TEXTILES), WHICH WAS DOING FOR LAST SEVERAL YEARS. IT WAS SUBMITTED BEFORE THE AUTHORITIES BELOW THAT THE DIF FERENCE OCCURRED BECAUSE OF THE CONTRA ENTRIES PASSED BY M/S.ANKUR T EXTILES. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT BY OBSERVING AS UNDER:- 4. GROUND NO.2 IS THAT THE LD.AO ERRED IN MAKING THE ADDITION OF RS.37,12,662 AS ALLEGED UNDISCLOSED TURNOVER/RECEIP TS. THE ADDITION HAS BEEN MADE AS PER PARA 2.4 OF THE A SSESSMENT ORDER IN VIEW OF THE AO THE APPELLANT SHOWED RECEIPTS LESS B Y RS.37,12,662 FROM M/S.ARVIND PRODUCTS LTD. ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 5 - DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPE LLANT INFORMED THAT THE APPELLANT DID CONSTRUCTION WORK OF M/S.ANKUR TE XTILES A DIVISION OF ARVIND TEXTILES, WHICH IT HAD BEEN DOING FOR LAS T SEVERAL YEARS AND STATED THE DIFFERENCE OCCURRED BECAUSE OF THE CONTR A ENTRIES OF RS.28,87,363 PASSED BY ANKUR TEXTILES. THE AO OBJE CTED TO THE SUBMISSION STATING THAT THE CONTRA ENTRIES PLEA TAK EN BY THE APPELLANT IS NOT PROVED. WHEN THIS OBJECTION WAS MADE AVAILABLE TO THE APPELLANT IT FURNISHED A CERTIFICATE FROM ANKUR TEXTILES DATED 3 0.06.2011 IN WHICH ANKUR TEXTILES CONFIRMED THAT GROSS RECEIPTS OF RS. 1,80,14,905 WERE CREDITED TO THE ACCOUNT OF THE APPELLANT WHICH INCL UDED SERVICE TAX AND ACTUAL PAYMENTS OF RS.1,78,71,253 WERE MADE TO THE APPELLANT. ANKUR TEXTILES HAS ALSO STATED THAT CONTRA ENTRIES WERE P ASSED, WHICH IN THE ANNEXURES ENCLOSED WITH THE LETTER OF ANKUR TEXTILE S ARE REFLECTED AT RS.28,87,363. THIS LETTER IS ENCLOSED AS ANNEXUR E-1 OF THIS ORDER. THIS LETTER WAS ADMITTED AS ADDITIONAL EVIDENCE AND WAS SENT TO THE AO FOR COUNTER COMMENTS, HOWEVER THE AO IN RESPONSE STUCK TO HIS STAND THAT THE CERTIFICATE NOW PRODUCED SHOULD NOT BE ACCEPTED . AFTER GOING THROUGH RIVAL SUBMISSIONS IT IS SEEN TH AT GROSS RECEIPTS CREDITED TO THE APPELLANT AS PER CERTIFICATE OF ANK UR TEXTILES COME TO RS.1,80,14,905 WHEREAS THE APPELLANT IS SHOWING RS. 1,70,45,954, DIFFERENCE OF RS.9,68,951 IS NOT SATISFACTORILY EXP LAINED THEREFORE THE ADDITION IS RETRICTED TO RS.9,68,951 (RS.1,80,14,90 5 RS.1,70,45,954). 4.1. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE FILED A LETTER FROM M/S.ANKUR TEXTILES DATED 30/06/2011 (ANNEXURE-I TO THE APPELLATE ORDER). THIS LETTER WAS ADMITTED BY THE LD.CIT(A) AND REMAND REPORT WAS CALLED FOR FROM THE AO AND THE O VIDE REMAND REPORT DATED 26/07/2011 SUBMITTED AS UNDER:- ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 6 - ON VERIFICATION OF DETAILS SUBMITTED, IT IS .NOTIC ED THAT THE ASSESSES HAS TICK MARKED THE CONTRA ENTRY AMOUNT ON DEBIT AND CREDIT SIDE AND TRIED TO CONVINCE THAT RECEIPTS WERE FULLY ACCOUNTED FOR. HOWEVER, TH E TICK MARKED AMOUNT DO NOT CONTAIN ANY NARRATION. WITHOUT NARRATION CORREC TNESS OF THESE ENTRIES COULD NOT BE VERIFIED. FURTHER, OUT OF TOTAL RECEIP TS OF RS.2,07,58,616/- CONTRACTEE HAS PASSED CONTRA ENTRY OF RS.28,87,363/ - WHICH IS IMPOSSIBLE AS ARVIND TEXTILE IS A BIG AND OLD GROUP WHO HAS APPOI NTED GOOD ACCOUNTANT WHO CANNOT MAKE SUCH TYPE OF MISTAKES I.E. HUGE AMO UNT OF RS.28,87,363/- FOR WHICH HE HAS PASSED CONTRA ENTRIES. THESE CONTRA EN TRIES ARE CONTRACT RECEIPTS BUT NOTHING ELSE. THE CERTIFICATE NOW PRODUCED BEFO RE YOUR HONOUR IS ONLY TO ACCOMMODATE THE ASSESSEE. FURTHER, DURING THE COURSE OF ASSESSMENT PROCEEDING S INFORMATION U/S. 133(6) OF THE ACT FURNISHED BY M/S. ARVIND TEXTILE MILLS W ERE PERUSED AND FOUND THAT GROSS PAYMENTS MADE BY THEM TO THE ASSESSEE FIRM WA S RS.2,07,58,616/- WHILE ON THE OTHER HAND THE ASSESSEE HAD SHOWN RS.1,70,4 5,954/- AS HIS GROSS RECEIPTS. THE DIFFERENCE OF RS.37,12,662/- WAS POIN TED OUT VIDE THIS OFFICE LETTER DT. 3/12/2010. THE AR SUBMITTED SOME RECONCI LIATION CITING 'CONTRA ENTRIES'. HE WAS FURTHER ASKED TO EXPLAIN, IN WRITI NG, ABOUT THE CONTRA ENTRIES AND RECONCILIATION VIDE ORDER SHEET DATE 7/12/2010. TILL THE DATE OF ASSESSMENT ORDER THE ASSESSEE HAD NOT COME FORWARD WITH THE EX PLANATION. BEFORE YOUR HONOUR THE ASSESSEE HAS FURNISHED SAME COPY OF LEDG ER ACCOUNT WHICH IS SUBMITTED AT THE TIME OF ASSESSMENT PROCEEDINGS. TH US, THE AO HAD MADE ADDITION ON THIS POINT AFTER THOROUGH INVESTIGATION . THE ASSESSEE HAS ALSO FAILED NOW TO NARRATE THE PARTICULARS OF CONTRA ENT RY. 4.2. THE LD.CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE AND THE REMAND REPORT, RESTRICTED THE ADDITION TO T HE EXTENT OF RS.9,68,951/-. DURING THE ASSESSMENT PROCEEDINGS, THE AO ADMITTEDLY NOT CALLED FOR THE VERACITY OF THE LETTER OF M/S.AN KUR TEXTILES, HOWEVER, ON THE BASIS OF CONJECTURES & SURMISES, SUBMITTED T HE REMAND REPORT. THEREFORE, THE REVENUE HAS ALSO NOT PLACED ANY CONT RARY MATERIAL ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 7 - SUGGESTING THAT THE LETTER OF M/S.ANKUR TEXTILES IS FAKE AND OVER THE CONTENTS OF THE SAME ARE CONTRARY TO THE MATERIAL A VAILABLE ON RECORD. IN THE ABSENCE OF SUCH FINDING BY THE AO, WE DO NOT SE E ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A), SAME IS HEREBY UPHELD. THUS, THIS GROUND OF REVENUES APPEAL IS REJECTED. 5. GROUND NO.2 OF REVENUES APPEAL IS AGAINST DELET ION OF DISALLOWANCE OF RS.15,52,560/- MADE BY THE AO ON AC COUNT OF BOGUS LABOUR PAYMENTS. THE LD.SR.DR SUBMITTED THAT THE L D.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. HE PLACED RELI ANCE ON THE ORDER OF THE AO. 5.1. ON THE CONTRARY, THE LD.COUNSEL FOR THE ASSESS EE SUPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT ALL DETAILS IN RESPECT OF LABOUR PAYMENTS WERE SUBMITTED BEFORE THE AUTHORITIES BELO W. HE SUBMITTED THAT THE AO WITHOUT CONSIDERING THE SUBMISSIONS OF THE A SSESSEE PROCEEDED TO MAKE DISALLOWANCE OF THE PAYMENTS AND ADDING THE SA ME TO THE TOTAL INCOME OF THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 8 - WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT BY OBSERVING AS UNDER:- GROUND NO.4 IS THAT THE LD.AO ERRED IN MAKING THE ADDITION OF RS.15,52,560 AS ALLEGED BOGUS LABOUR PAYMENTS. THE ADDITION HAS BEEN MADE AS PER NARRATION GIVEN I N PARA 3.7.4 OF THE ASSESSMENT ORDER ON THE GROUND THAT PAN GIVEN FOR S OME LABOUR PAYMENTS ARE NOT RELIABLE AS ACCORDING TO THE AO WR ONG PAN WAS FURNISHED FOR ONE CONTRACTOR & SONS. THE AO DISALL OWED 20% OF RS.79,77,371 (RS.91,27,625 (TOTAL LABOUR PAYMENT) RS.11,50,254 (CASH PAYMENTS TO LABOUR WITHOUT PAN). DURING THE COURSE OF APPELLATE PROCEEDINGS IT WAS A RGUED BY THE LD.AR THAT AO HAS DISALLOWED AMOUNT OUT OF PAYMENTS WITH PANS, ONLY ON THE BASIS OF TEST CHECK OF PAN OF ONE CONTRACTOR & SONS . IT WAS STATED THAT THIS CONCERN IS THE PROPRIETORSHIP CONCERN OF ONE M R.SHREYAS R CONTRACTOR AND PAN CAN BE FOUND WHEN SEARCHED BY TH E PROPRIETORS NAME. DURING THE COURSE OF APPELLATE PROCEEDINGS V IDE PAGE NO.104 OF THE PAPER BOOK PAN COPY WAS SUBMITTED OF SHREYAS R CONTRACTOR WHICH IS ENCLOSED AS ANNEXURE-2 OF THIS ORDER. IN THE RE MAND REPORT THE AO REITERATED THE STAND TAKEN IN THE ASSESSMENT ORDER. AS THE PA FURNISHED DURING APPELLATE PROCEEDINGS IS FOUND CORRECT IN MY VIEW THERE IS NO JUSTIFICATION FOR DISALLOWING 20% OF LABOUR PAYMENT S WITH PAN MERELY ON A PRESUMPTION WHICH IS FOUND WRONG. 6.1 THE AO HAD MADE DISALLOWANCE OF LABOUR PAYMENTS ON THE BASIS OF ESTIMATION TO THE EXTENT OF 20% OF THE EXPENDITUR E. THE AO HAS NOT GIVEN ANY BASIS ON WHICH HE HAS BASED HIS FINDING T O DISALLOW AT 20% OF THE EXPENDITURE ON ESTIMATE BASIS. IN OUR CONSIDER ED VIEW, IF THE PAYMENT IS BOGUS, IT WOULD BE 100%. THE LD.CIT(A) HAS GIVE N HIS FINDING ON THE ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 9 - FACT THAT THE PAN FURNISHED DURING THE APPELLATE PR OCEEDINGS WAS FOUND TO BE CORRECT. UNDER THESE FACTS, WE DO NOT SEE AN Y REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) SINCE THE REVENUE H AS NOT PLACED ANY CONTRARY MATERIAL ON RECORD. THUS, GROUND NO.2 OF REVENUES APPEAL IS REJECTED. 7. GROUND NO.3 OF REVENUES APPEAL IS AGAINST ADMIT TING THE ADDITIONAL EVIDENCES IN VIOLATION OF RULES 46A OF T HE IT RULES, 1962. THE LD.SR.DR SUBMITTED THAT THE LD.CIT(A) WAS NOT J USTIFIED IN DELETING THE ADDITIONAL EVIDENCES. 7.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT ASSESSEE HAS EXPLAINED BEFORE THE LD.CIT(A) IN RESPECT OF F ILING THE LETTER DATED 30/06/2011. HE SUBMITTED THAT UNDER THESE FACTS, T HERE IS NO VIOLATION OF RULES 46A. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO HAS NOTED THAT ASSESSEE FURNISH ED SOME CONTRA ENTRIES. THEREFORE, IT IS NOT THE CASE WHERE THE A SSESSEE HAD NOT TAKEN A STAND BEFORE THE AO AND RELIED UPON THE EVIDENCES. UNDER THESE FACTS, WE DO NOT SEE ANY MERIT INTO THE GROUND RAISED BY T HE REVENUE AND THE SAME IS REJECTED. ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 10 - 9. GROUND NOS. 3 & 4 ARE GENERAL IN NATURE WHICH RE QUIRE NO INDEPENDENT ADJUDICATION. 10. AS A RESULT, REVENUES APPEAL IS DISMISSED. 11. NOW, WE TAKE UP THE ASSESSEES APPEAL IN ITA NO .2490/AHD/2011, FOR AY 2008-09, WHEREIN THE FOLLOWING GROUNDS HAVE BEEN RAISED:- 1. REJECTION OF BOOKS OF ACCOUNT : 1.1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS I N UPHOLDING THE REJECTION OF AUDITED BOOKS OF ACCOUNTS BY INVOK ING PROVISIONS OF SECTION 145(3) OF THE INCOME TAX ACT, 1961. 1.2. THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING TH E FACT THAT IN ABSENCE OF ANY FAULT WITH BOOKS OF ACCOUNTS OR THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE, THE ACCOUNTS CANNOT BE HELD TO BE DEFECTIVE AND AS A RESULT THE ADDITIONS CANNOT BE SUSTAINED. 2. ADDITION OF RS.968951/- AS UNEXPLAINED WORK RECEIP T OF ANKUR TEXTILES : 2.1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS.968951/- AS UNEXPLAINED WORK REC EIPT. 2.2. THE LEARNED CIT(A) GROSSLY ERRED IN SUSTAINING THE IMPUGNED ADDITION BY OVERLOOKING THE SERVICE TAX RECEIPTS OF RS.966237/- ACCOUNTED BY THE APPELLANT. THE LEARNED CIT(A) OMI TTED TO CONSIDER THE SERVICE TAX RECEIPTS OF RS.966237/- AN D THEREBY ERRED IN SUSTAINING THE IMPUGNED ADDITION. 2.3. THE LEARNED CIT(A) ERRED IN SUSTAINING THE IMPUGNED ADDITION WITHOUT APPRECIATING THE FACT THAT THE RECEIPTS OF ANKUR TEXTILES RE FULLY RECONCILED AND TALLIED. 3. ADDITION OF RS.1150254/- AS ALLEGED BOGUS LABOUR PA YMENTS : ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 11 - 3.1. THE LD.CIT(A) HA ERRED IN LAW AND ON FACTS IN CONFI RMING THE ADDITION OF RS.1150254/- AS ALLEGED BOGUS LABOUR PA YMENTS. 3.2. BOTH THE LOWER AUTHORITIES HAS GROSSLY ERRED IN MAK ING THE IMPUGNED ADDITION AS THERE ARE NO EVIDENCES TO SHOW THAT THE PAYMENTS TO LABOURORS HAVING NO PAN NUMBER ARE BOGU S. NOTHING WAS BROUGHT ON RECORD TO SHOW THAT ANY PART OF THE AMOUNT GIVEN BY THE APPELLANT TO SUCH LABOURORS CAM E BACK TO APPELLANT IN ANY FORM. 3.3. BOTH THE LOWER AUTHORITIES FAILED TO APPRECIATE THA T THE LABOUR PAYMENTS IN QUESTION ARE FULLY SUPPORTED BY THE BIL LS CERTIFIED BY THE SITE ENGINEER/SUPERVISOR SHOWING FULL PARTICULA RS OF WORK DONE AND THE RATE OF PAYMENT. THE LABOUR PAYMENTS ARE FULLY VOUCHED. THE IDENTITY OF LABOURORS IS PROVED. UND ER THE CIRCUMSTANCES THE ADDITION CANNOT BE MADE. 3.4. BOTH THE LOWER AUTHORITIES OVERLOOKED THE FACT THAT IN MOST OF THE CASES LABOUR PAYMENTS ARE MADE BY ACCOUNT PAYEE CHE QUES BUT EXCEPTIONALLY IN FEW CASES PAYMENT IS MADE BY BEARE R CHEQUES. AS A RESULT THE IMPUGNED ADDITION IS WHOLLY UNJUSTI FIED. 4. ADHOC DISALLOWANCE OF RS.5000/- OUT OF MACHINE REPA IRS : THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS I N CONFIRMING THE ADHOC DISALLOWANCE OF RS.5000/- OUT OF MACHINE REPAIR EXPENSES. THE LEARNED CIT(A) OVERLOOKED THE FACT THAT THE A PPELLANT HAS ALREADY FURNISHED THE PROOFS OF THE EXPENSES IN THE PAPERBOOK. 5. ADHOC DISALLOWANCE OF RS.20,000/- OUT OF SUPERVISI ON CHARGES : THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CON FIRMING THE ADHOC DISALLOWANCE OF RS.20000/- OUT OF SUPERVI SION CHARGES. THE LEARNED CIT(A) OVERLOOKED THE FACT THAT THE APP ELLANT HAS ALREADY FURNISHED THE PROOFS OF THE EXPENSES IN THE PAPERBOOK. PRAYER THE APPELLANT RESPECTFULLY PRAYS THAT: ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 12 - 1. THE BOOKS OF ACCOUNTS BE ACCEPTED. 2. THE ADDITION OF RS.968951/- AS UNACCOUNTED WORK REC EIPT OF ANKUR TEXTILES BE DELETED. 3. THE ADDITION OF RS.1150254/- AS BOGUS LABOUR PAYMEN TS BE DELETED. 4. THE ADHOC DISALLOWANCE OF RS.5000/- OUT OF MACHINE REPAIRS BE DELETED. 5. THE ADHOC DISALLOWANCE OF RS.20000/- OUT OF SUPERVI SION CHARGES BE DELETED. 6. SUCH AND FURTHER RELIEF WHICH THE APPELLANT IS ENTI TLED AS THE NATURE AND CIRCUMSTANCES OF THE CASE MAY REQUIRE. 11.1. GROUND NO.1.1 & 1.2 OF ASSESSEES APPEAL ARE AGAINST IN RESPECT OF REJECTION OF BOOKS OF ACCOUNTS. WE FIND THAT BEFOR E THE LD.CIT(A) FOLLOWING GROUND WAS RAISED BY THE ASSESSEE:- 1. LEGAL GROUNDS : 1.1. THE LEARNED A.O. ERRED IN LAW AND ON FACTS IN REJECTING BOOK RESULT OF THE APPELLANT WITHOUT REJECTING BOOKS OF ACCOUNTS AS THERE IS NO SINGLE DEFECT IN THE BOOKS OF ACCOUNT. AS A RESULT THE ADDITIONS WHICH HAVE BEEN MADE TO THE RETURNED INCO ME MUST BE HELD NO NEST IN LAW. THE BOOK RESULT THEREFORE BE ACCEPTED. 1.2 THE LEARNED A.O. ERRED IN LAW AND ON FACTS IN M AKING VARIOUS ADDITIONS PURELY ON CONJECTURES AND SURMISE S WITHOUT ANY MATERIAL OR BASIS AND AS SUCH THE SAID ADDITIONS AR E REQUIRED TO BE DELETED. 11.2. HOWEVER, THE LD.CIT(A) HAS NOT DECIDED THE GR OUND WHILE PASSING APPELLATE ORDER. THE LD.CIT(A) HAS HELD THAT THE G ROUND WOULD BE COVERED IN SUBSEQUENT GROUNDS WHILE DECIDING THE ME RITS OF THE ADDITION ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 13 - BECAUSE OF THE APPELLANT STATED THAT THE BOOK RESUL TS WERE REJECTED. UNDER THESE FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) OUGHT TO HAVE GIVEN A SPEAKING ORDER. THEREFORE, WE RESTORE THIS GROUND TO THE FILE OF LD.CIT(A) TO DECIDE THE SAME AFRESH. 12. APROPOS TO GROUND NOS.2 TO 2.3, IT IS SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE THAT HE DOES NOT WISH TO PRESS THE SE GROUNDS. LD.SR.DR HAS NO OBJECTION. IN VIEW OF THE SUBMISSION MADE B Y THE LD.COUNSEL FOR THE ASSESSEE, GROUND NOS.2 TO 2.3 ARE DISMISSED AS NOT PRESSED. 13. GROUND NOS.3.1 TO 3.3 ARE AGAINST CONFIRMATIO N OF ADDITION OF ALLEGED BOGUS LABOUR PAYMENTS. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW HAVE GROSSLY E RRED IN MAKING THE IMPUGNED ADDITION AS THERE ARE NO EVIDENCES TO SHOW THAT THE PAYMENTS TO LABOURERS HAVING NO PAN ARE BOGUS. NOTHING WAS BRO UGHT ON RECORD TO SHOW THAT ANY PART OF THE AMOUNT GIVEN BY THE APPEL LANT TO SUCH LABOURERS CAME BACK TO APPELLANT IN ANY FORM. HE SUBMITTED T HAT THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE LABOUR PAYMENTS IN QUESTION ARE FULLY SUPPORTED BY THE BILLS CERTIFIED BY THE SITE ENGINE ER/SUPERVISOR SHOWING FULL PARTICULARS OF WORK DONE AND THE RATE OF PAYME NT. THE LABOUR PAYMENTS ARE FULLY VOUCHED. ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 14 - 13.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE AO HAS GIVEN FINDING A ND CONFIRMED BY THE LD.CIT(A) THAT THE LIST FURNISHED IN SUPPORT OF LAB OUR PAYMENT WITH NO PAN SHOWS THAT CASH HAD BEEN WITHDRAWN BY PERSONS O THER THAN THE PERSONS IN WHOSE NAME EXPENSES HAD BEEN DEBITED. THE AO HAS STATED IN PARA 3.7.2 THAT THE EXISTENCE OF LABOUR RAMESH BHAI RUPABHAI, DILIPBHAI DEVJIBHAI AND LAXMANBHAI BHURABHAI COULD NOT BE PROVED BY THE ASSESSEE. HE SUBMITTED THAT IN THESE CIRCUMSTA NCES, THE AUTHORITIES BELOW WERE JUSTIFIED IN MAKING THE ADDITION AND CON FIRMING THE SAME. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE AO HAS GIVEN SPECIFIC DISCREPANCY IN PARAS-3.7. 1 TO 3.7.4 OF HIS ORDER. THE CONTENTION OF THE ASSESSEE IS THAT THE ACCOUNTS ARE FULLY AUDITED, BILLS/VOUCHERS ARE CERTIFIED BY THE SITE E NGINEERS/SUPERVISOR. MERELY BECAUSE THE LAVOURERS WERE NOT HAVING PANS C ANNOT BE THE REASON FOR MAKING DISALLOWANCE. THE CONTENTIONS MADE BEFO RE THE LD.CIT(A) WERE REITERATED BEFORE THIS TRIBUNAL AS WELL. THE GIST OF THE CONTENTIONS OF THE ASSESSEE ARE AS UNDER:- SUBMISSIONS: 3.1 WITH A VIEW TO VERIFY THE LABOUR PAYMENTS T HE LEARNED A.O. CALLED UPON THE APPELLANT TO FURNISH COMPLETE DETAILS OF THE LABOUR PAYMENTS WHICH WERE EXAMINED WITH THE CASH BOOK, BANK BOOK, LABOUR VOUCHERS AND BANK STATEMENTS. ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 15 - 3.2 WHILE EXAMINING THE LABOUR VOUCHERS THE LEA RNED A.O. OBSERVED THAT IN SOME OF THE CASES WHERE PAYMENTS ARE MADE BY BEARER CHEQUES THERE IS NO PAN OR ADDRESS OF THE LABOURER. THE LEARNED A.O. THEREFORE OBTAINED P HOTOCOPIES OF SEVEN VOUCHERS OF LABOUR PAYMENTS (FIVE LABOURERS) AND FURTHER OBTAIN ED CERTIFIED PHOTO COPIES OF CHEQUES FOR THESE PAYMENTS FROM INDIAN BANK, NAVRAN GPURA AND MATCHED THE SIGNATURE ON THE VOUCHERS WITH THE SIGNATURES ON TH E CHEQUES AND CALLED FOR THE AXPLANATION OF THE APPELLANT REGARDING GENUINENESS OF THESE PAYMENTS. 3.3 (A) THE APPELLANT EXPLAINED THAT THE LABOUR PAYMENTS IN QUESTION ARE SUPPORTED BY THE BILLS CERTIFIED BY THE SITE ENGINEER / SUPER VISOR SHOWING FULL PARTICULARS OF WORK DONE BY THE LABOURER AND THE RATE OF PAYMENT. THE L ABOUR PAYMENTS ARE FULLY VOUCHED AND ARE AUDITED. REGARDING SIGNATURE OF THE LABOURE R THE APPELLANT FURNISHED ITS EXPLANATION VIDE LETTER DATED 23-12-2010. KINDLY REFER PAGE NO. 302. (B) THE APPELLANT FURTHER EXPLAINED THAT IT IS CUST OMARY AND NORMAL TRADE PRACTICE TO ISSUE BEARER CHEQUES TO THE LABOURERS AND IT IS NOT WITHIN THE. POWER OF APPELLANT TO ENFORCE THAT THE LABOURER HIMSELF MUST ENCASH THE C HEQUE. IT IS ALSO NOT WITHIN THE POWER OF APPELLANT TO FIND OUT THE PERSON WHO ENCAS HED THE CHEQUE. (C) THAT THE LABOUR PAYMENTS MADE TO FIVE LABOURERS CONFORMS TO THE NORMAL HUMAN CONDUCT AND BEHAVIOR AND IN ACCORDANCE WITH ESTABLI SHED TRADE PRACTICE. FOR DETAILS OF WORK DONE BY FIVE LABOURERS KINDLY R EFER PAGE NO.60. FOR IDENTITY OF FIVE LABOURERS AND FOR PARTICULARS OF WORK DONE BY THEM AND RATE OF PAYMENT ETC. KINDLY REFER PAGES NOS. 63,64,67,68,71,72,75,76,79,80,83 TO 85 AND 88,89. 3.4 THE LEARNED A.O. BRUSHED ASIDE THE EXPLANATI ON OF THE APPELLANT AND JUMPED TO THE FOLLOWING ASSUMPTIONS: (A) IT IS VERY CLEAR THAT LABOUR PAYMENTS TO TH OSE NOT HAVING PAN ARE DRAWN BY THE PERSON OTHER THAN DRAWEE'S NAME. (B) LABOUR PAYMENTS HAVING NO PAN AND NO ADDRES S ARE COMPLETELY UNVERIFIABLE. (C) THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE OR DETAIL TO ESTABLISH THE EXISTENCE OF RAMESHBHAI, RUPABHAI, DILIPBHAI DEVJIBHAI AND LA XMANBHAI BHURABHAI. ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 16 - (D) IT CAN SAFELY BE CONCLUDED THAT LABOUR PAYME NTS TO PAYEES NOT HAVING PAN ARE UNVERIFIABLE AND DEFINITELY BOGUS. IN SUCH CASES TH E AMOUNT HAS BEEN DRAWN IN CASH FROM BANK BY THE PERSONS OTHER THAN THE DRAWEES. 3.5 THE LEARNED A.O. THEREAFTER ON HIS OWN CULLE D OUT DETAILS OF LABOUR PAYMENTS AND PREPARED ANNEXTURE-3 AND ANNEXTURE-4 FROM THE S OFT COPY (CD) FURNISHED BY THE APPELLANT. 3.6 WHILE PREPARING ANNEXURE - 3 AND ANNEXURE - 4 THE ID. A.O. MADE CERTAIN GLARING ERRORS. .THE CORRECT DETAILS ARE AS UNDER: ANNEXURE-3 PAYMENT THROUGH ACCOUNT PAYEE CHEQUES RS. 643736 PAYMENT THROUGH BEARER CHEQUE 673425 PAYMENT THROUGH 'SELF CHEQUE 3180 7 705232 NET PAYMENT 1348967 TDS 15858 GROSS PAYMENT 1364825 KINDLY REFER PAGE NOS. 90 TO 94. ANNEXURE-4 CORRECT TOTAL 1122579 PAYMENT WITH PAN 3025 PAYMENT THROUGH A/C. PAYEE CHEQUES 655557 PAYMENT THOUGH BEARER CHEQUES 447442 PAYMENT THROUGH SELF CHEQUES 1655 5 1122579 KINDLY REFER PAGE NOS. 98 TO 101. 3.7 THE APPELLANT RESPECTFULLY SUBMITS THAT THE RE ARE NO EVIDENCES TO SHOW THAT THE PAYMENTS TO LABOURERS HAVING NO PAN NUMBER ARE BOGU S. NOTHING WAS BROUGHT ON RECORD TO SHOW THAT ANY PART OF THE AMOUNT GIVEN BY THE APPELLANT TO SUCH LABORERS CAME BACK TO APPELLANT IN ANY FORM. THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE LAB OUR PAYMENTS ARE BOGUS AND NOT PROPERLY ACCOUNTED. ADDITION THUS MADE ON CONJECTUR ES AND SURMISES AND HENCE CAN ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 17 - NOT BE SUSTAINED. THE LEARNED A.O. HAS NOT BEEN ABL E TO PIN POINT ANY PIECE OF EVIDENCE WHICH COULD LEAD TO THE CONCLUSION THAT TH E PAYMENTS ARE BOGUS. 3.8 THE ID. A.O. FAILED TO NOTICE FOLLOWING VIT AL FACTS: (A) THAT ALL THE LABOUR PAYMENTS ARE FULLY SUPPO RTED BY THE BILLS CERTIFIED BY THE SITE ENGINEER / SUPERVISOR SHOWING FOIL PARTICULARS OF W ORK DONE BY THE LABOURER AND THE RATE OF PAYMENT. THE LABOUR PAYMENTS ARE FULLY VOUC HED AND ARE AUDITED. (B) THAT IN THE CONSTRUCTION WORK THERE IS INVO LVEMENT OF LABOURERS WHO ARE ILLITERATE, CASUAL OR MIGRATORY. IN SUCH CASES THER E MAY NOT BE PAN OR ADDRESS OF THE LABOURERS. (C) THAT IN MOST OF THE CASES LABOUR PAYMENTS A RE MADE BY ACCOUNT PAYEE CHEQUES BUT EXCEPTIONALLY IN SOME CASES WHERE THE LABOURER NEEDS THE PAYMENT IMMEDIATELY OR IN CASE IF THEY DO NOT HAVE BANK ACCOUNT THE PAYMEN D IS MADE BY BEARER CHEQUES. 3.9 IT IS RESPECTFULLY SUBMITTED THAT THERE IS N O EVIDENCE THAT THE LABOUR WORK DONE AND CERTIFIED BY THE SITE SUPERVISOR IS NOT CARRIED OUT OR THAT THE MONEY PAID BY THE APPELLANT TO THE LABOURERS HAVING NO PAN WAS ULTIMA TELY RETURNED TO THE APPELLANT. THERE IS NO MATERIAL ON RECORD ON THE BASIS OF WHIC H IT CAN BE CONCLUDED THAT THE APPELLANT HAD SHOWN BOGUS LABOUR PAYMENTS OF RS.115 0254/-. UNDER THESE CIRCUMSTANCES THE LEARNED A.O. IS NOT JUSTIFIED IN DOUBTING THE GENUINENESS OF THE LABOUR PAYMENTS MADE BY THE APPELLANT MERELY ON THE BASIS THAT THE LABOURERS DO NOT HAVE PAN. 3.10 THE APPELLANT RESPECTFULLY RELIES ON THE FOL LOWING DIRECT DECISIONS IN SUPPORT OF THE CONTENTION THAT THE IMPUGNED ADDITION IS WHOLLY UNJUSTIFIED. (A) COMMISSIONER OF INCOME TAX VS. M. K. BROTHERS [IN THE GUJARAT HIGH COURT] 163 ITR 249 (GUJ). (B) NISAR BIRI SIKKA NO.1 VS. COMMISSI ONER OF INCOME TAX, LUCKNOW. HIGH COURT OF ALLAHABAD, LUCKNOW BENCH. 17 4 TAXMAN 51 (ALL) 3.11 IT IS RESPECTFULLY SUBMITTED THAT THE ID. A. O. HAS GROSSLY ERRED IN MAKING SUCH ADHOC DISALLOWANCE SIMPLY ON THE ASSUMPTION THAT TH E LABOUR PAYMENTS TO LABOURERS ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 18 - HAVING NO PAN ARE UNVERIFIABLE AND THEREFORE DEFINI TELY BOGUS. THE IMPUGNED ADDITION SHOULD THEREFORE BE DELETED. 14.1. WE FIND THAT THE LD.CIT(A) HAS DECIDED THIS I SSUE AS UNDER:- 5. GROUND NO.3 IS THAT THE LD.AO ERRED IN MAKING THE ADDITION OF RS.11,50,254 AS ALLEGED BOGUS LABOUR PAYMENTS. THE ADDITION HAS BEEN MADE AS PER PARA 3.7.3 OF THE ASSESSMENT ORDER. THE AO HAS STATED THAT THE LIST FURNISHED I N SUPPORT OF LABOUR PAYMENT WITH NO PAN SHOWS THAT CASH HAD BEEN WITHDRAWN BY PERSONS OTHER THAN THE PERSONS IN WHOSE NAME EXP ENSES HAD BEEN DEBITED. THE AO HAS STATED IN PARA 3.7.2 THAT THE EXISTENCE OF LABOUR RAMESHBHAI RUPABHAI, DILIPBHAI DEVJIBHAI AND LAXMAN BHAI BHURABHAI COULD NOT BE PROVED BY THE ASSESSEE. IT IS SEEN THAT CASH PAYMENTS TO LABOUR TOTALLING T O RS.11,50,254 HAVE NOT BEEN DISPUTED BY THE APPELLANT, THOUGH IT WAS STATED THAT ALL PAYMENTS WERE GENUINE BUT THE OBJECTIONS OF THE AO SUMMARIZED ABOVE COULD NOT BE ANSWERED EVEN DURING THE APPELLATE PROCEEDINGS. THE ABOVE THREE PERSONS WER E PAID BY BEARER CHEQUES DRAWN BY SOMEONE ELSE WHICH AMOUNT T O CASH PAYMENT ONLY. DILIPBHAI HAS BEEN INFORMED PAID CAS H PAYMENTS TOTALLING ABOVE RS.50,000 AND ALSO RS.45,425 BY ACC OUNT PAYEE CHEUQES, BUT THEN WHY SHOULD NOT THE APPELLANT BE I N A POSITION TO FURNISH THE ADDRESS OF THIS PERSON AT LEAST. DESPITE OPPORTUNITIES ADDRESSES OF PERSONS WERE NOT FURNISHED TO WHOM LABOUR PAYMENTS TOTALLING TO RS.11,50,254 (LIS TS ENCLOSED WITH THE ASSESSMENT ORDER) HAD BEEN MADE DURING THE YEAR ON THE PRETEXT THAT LABOUR KEEP CHANGING. IN THIS BACKGRO UND THE DISALLOWANCE MADE BY THE AO OF CASH LABOUR PAYMENTS NOT PROVED OUT OF RS.91,27,625 LABOUR EXPENSES CLAIMED BY THE APPELLANT IS UPHELD. ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 19 - 14.2. FROM THE ABOVE FINDING OF THE LD.CIT(A), IT I S EVIDENT THAT THE LD.CIT(A) HAS NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE. THEREFORE, THE GROUND IS RESTORED TO THE FILE OF LD.CIT(A) TO PASS A SPECIFIC FINDING ON THE SUBMISSIONS MADE BY THE ASSESSEE. THUS, GRO UND NOS.3.1 TO 3.3 OF ASSESSEES APPEAL ARE ALLOWED FOR STATISTICAL PURPO SES. 15. GROUND NOS. 4 & 5 ARE AGAINST CONFIRMING THE A DHOC DISALLOWANCE(S) OF RS.5,000/- OUT OF MACHINE REPAIR EXPENSES AND R S.20,000/- OUT OF SUPERVISION CHARGES RESPECTIVELY. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW WERE NOT JUSTI FIED IN MAKING THE DISALLOWANCES AND ADDING THE SAME TO THE INCOME OF THE ASSESSEE. HE SUBMITTED THAT THE DISALLOWANCES HAVE BEEN MADE ONL Y ON THE BASIS OF CONJECTURES AND SURMISES. 15.1. ON THE CONTRARY, SR.DR SUBMITTED THAT THE VOU CHERS WERE SUBMITTED COULD NOT BE VERIFIED THAT THE VOUCHERS A RE SELF-MADE. 16. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AUTHORITIES BELOW HAVE DISALLOWED THE EXPENDITURE ON THE BASIS THAT VOUCHERS ARE SELF-MADE AND UNVERIFIABLE. HOWEVER, THERE IS NO FINDING FROM BOTH THE AUTHORITIES AS TO WHAT EFFORT S WERE MADE FOR VERIFYING THE SAME AND WHETHER THE PAYMENTS MADE TO THE PERSONS WERE ITA NO.2648/AHD/2011 (BY REVEN UE) AND ITA NO.2490/AHD/2011 (BY ASSESSEE) ITO/ADDL.CIT VS. M/S.BUILDCON ENGINEERS ASST.YEAR 2008-09 - 20 - CALLED FOR EXAMINATION IS NOT CLEAR FROM THE ORDER. THEREFORE, WE HEREBY DIRECT THE AO TO DELETE BOTH THE DISALLOWANCES. TH US, GROUND NOS.4 & 5 OF ASSESSEES APPEAL ARE ALLOWED. 15. IN THE RESULT, REVENUES APPEAL IS DISMISSED, W HEREAS ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 21 ST DAY OF AUGUST, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 21/ 08 /2015 /(..$ , %.$../ T.C. NAIR, SR. PS !'#$%$&' / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012 3 / CONCERNED CIT 4. 3 ( ) / THE CIT(A)-XV, AHMEDABAD 5. 4%5 $12 , ( 12 + , 0 / DR, ITAT, AHMEDABAD 6. 578 9& / GUARD FILE. / BY ORDER, #4 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD