ITO WD 19(3)(2), MUMBAI V. SYED KAMRUL ISLAM, MUMBAI

ITA 948/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3827 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 10-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A DHYANI
• Assessee Lawyers: VIPUL J SHAH
• Keywords: Opportunity of being heard; Corroborative evidences
• Section: 143(3); 37(1); 194C; 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER / I .T A NO.1115/MUM/2014 ( / ASSESSMENT YEAR : 2006 - 07 SHRI SYED KAMRUL ISLAM, ROOM NO. 217, NOOR ALI MASJID GALI, RAJU NAGAR, BAZAR ROAD, BANDRA (W), MUMBAI - 400 050 / VS. THE ITO 19(3)(2), PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400 012 / I .T A NO. 948/MUM/2014 ( / ASSESSMENT YEAR : 2006 - 07 THE ITO 19(3)(2), PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400 012 / VS. SHRI SYED KAMRUL ISLAM, ROOM NO. 217, NOOR ALI MASJID GALI, RAJU NAGAR, BAZAR ROAD, BANDRA (W), MUMBAI - 400 050 ./ ./ PAN/GIR NO. AFZPS 3205D ( / APPELLANT ) .. ( / RESPONDENT ) / A SSESSEE BY: SHRI VIPUL J. SHAH / DEPARTMENT BY: SHRI R.A. DHYANI / DATE OF HEARING : 03 . 0 2 . 201 6 / DATE OF PRONOUNCEMENT : 24 . 0 2 .201 6 / O R D E R PER C.N. PRASAD, JM : THESE ARE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE AGAINST THE VERY SAME ORDER OF THE LD. CIT(A) - 30 , MUMBAI DATED ITA NO. 1115/M/2014 &948/M/14 2 04.12. 201 3 PERTAINING TO ASSESSMENT YEAR 200 6 - 0 7 . B OTH THESE APPEALS ARE HEARD TOGETHER AND THEY ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 948/M/2014 REVENUES APPEAL 2 . THE ONLY ISSUE IN REVENUES APPEAL IS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 81,88,864/ - MADE U/S. 40 ( A ) (IA) OF THE ACT. 3. BRIEF FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EMBROIDERY & J ARI WORK ON CONTRACT BASIS. THE RETURN OF INCOME WAS FILED O N 31.10.2006 DECLARING TOTAL INCOME AT RS. 8,01,830/ - . THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 12 TH DECEMBER, 2008. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED LABOUR CHARGES OF RS. 1,29,56,796/ - TO ITS PROFIT AND LOSS ACCOUNT AND NO TDS HAS BEEN DEDUCTED BY THE ASSESSEE. SINCE THE ASSESSEE FAILED TO FURNISH IN RESPECT OF TDS MADE U/S. 194C OF THE ACT ON LABOUR CHARGES, THE AO DISALLOWED RS. 81,88,864/ - INVOKING THE PROVISIONS OF S EC. 40(A)(IA) OF THE ACT FOR NON DEDUCTION OF TDS. IN THE ALTERNATIVE THE AO HELD THAT SINCE THE ASSESSEE FAILED TO SUBMIT THE REQUISITE DETAILS AND SUPPORTING EVIDENCES AND NO T DISCHARGED THE ONUS CAST UPON HIM, THE ENTIRE EXPENDITURES CANNOT BE ACCEPTE D AND THEREFORE HE ESTIMATE D THE LABOUR CHARGES TO BE DISALLOWED AT RS. 25,91,359/ - BEING 20% OF RS. 1,29,56,796/ - . HOWEVER, SINCE THE AO ALREADY DISALLOW ED SUCH PAYMENT U/S. 40(A)(IA) OF THE ACT , HE OBSERV ED THAT IF THE ASSESSEE MADE TDS PAYMENT LATER ON AND CLAIMS DEDUCTION U/S. 40(A)(IA) OF THE ACT IN THE SUBSEQUENT YEARS, THE DISALLOWANCE OF LABOUR CHARGES TO ITA NO. 1115/M/2014 &948/M/14 3 THE TUNE OF RS. 25.91 LAKHS MADE U/S. 37(1) OF THE ACT WILL BECOME OPERATIONAL/EFFECTIVE. 4 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND CALLING FOR THE REMAND REPORT HELD THAT THE NATURE OF WORK CARRIED OUT BY THE KARIGARS THROUGH WHICH THE ASSESSEE IS GETTING THE WORK DONE IS NOT CONTRACTUAL AND THEREFORE THE PROVISIONS OF SEC. 40(A)(IA) OF THE ACT HAVE NO APPLICATION. THUS, HE DELETED THE ADDITION U/S. 40(A)(IA) OF THE ACT. HOWEVER, HE SUSTAINED THE DISALLOWANCE @ 20% OF THE ENTIRE LABOUR CHARGES STATING THAT ASSESSEE HAS N OT BEEN ABLE TO ESTABLISH GENUINENESS OF THE ENTIRE PAYMENT BY TAKING NOTE OF THE OBSERVATIONS IN THE REMAND REPORT GIVEN BY THE AO. 5 . THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY SUPPORTS THE ORDERS OF THE LD. CIT(A) IN SO FAR AS THE DELETION OF DISALL OWANCE MADE U/S. 40(A)(IA) IS CONCERNED. IN RESPECT OF THE CONFIRMATION OF DISALLOWANCE TO THE EXTENT OF @20% HE SUBMITS THAT THERE IS NO JUSTIFICATION IN SUSTAINING SUCH DISALLOWANCE WITHOUT APPRECIATING THE FACT THAT DURING THE COURSE OF REMAND PROCEEDI NGS THE ASSESSEE HAS PRODUCED THE DETAILS OF THE PARTIES TO WHOM THE PAYMENTS HAVE BEEN MADE AND THEY SUBMITTED THE IR PAN CARD, DRIVING LICENCE , ADHAR CARD AND CONFIRMATION LETTERS ACCEPTING THE AMOUNTS RECEIVED TOWARDS LABOUR CHARGES. 6 . THE LD. DEPARTMEN TAL REPRESENTATIVE SUPPORTS THE ORDERS OF THE AO. 7 . HEARD BOTH SIDES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE AO WHILE COMPLETING THE ASSESSMENT NOTICED THAT ASSESSEE HAS ITA NO. 1115/M/2014 &948/M/14 4 NOT DEDUCTED TDS ON LABOUR CHARGES AND THEREFORE BY INVOKING PROVISION S OF SEC. 40(A)(IA) OF THE ACT HE DISALLOWED LABOUR CHARGES TO THE EXTENT OF RS. 81,88,864/ - . IN THE ALTERNATIVE, THE AO WAS OF THE VIEW THAT THE ENTIRE EXPENSES CANNOT BE ALLOWED ON THE GROUND THAT THE ASSESSEE FAILED TO SUBMIT THE REQUISITE DETAILS AND SUPPORTING EVIDENCES TO SHOW THAT THE EXPENDITURE WAS INCURRED. THE LD. CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO AND AFTER OBTAINING THE REMAND REPORT AND THE COMMENTS FROM THE ASSESSEE ON REMAND REPORT HELD THAT ASSESSEE IS CARRYING OUT EMBROIDERY AND JARY WORKS THROUGH PERSONS TO WHOM HE HAS MADE LUMP SUM PAYMENT AND IT HAS NOT BEEN DISPUTED THAT THE PAYMENT MADE TO KARIGARS WHO IN TURN DIS TRIBUTED THE AMOUNTS TO WORKERS AS WAGES THEREFORE THE NATURE OF WORK CARRIED OUT BY THE KARIGARS IS NOT CONTRACTUAL. THEREFORE , HE DELETED THE DISALLOWANCE U/S. 40(A)(IA) OF THE ACT OBSERVING AS UNDER: THE SEQUENCE OF EVENTS NARRATED ABOVE SHOW THAT THE APPELLANT HAS BEEN PROVIDED FULL AND ADEQUATE OPPORTUNITY TO ESTABLISH THE BASIS OF CLAIM MADE IN THE RETURN AND COMPLIANCE MADE TO THE PROVISIONS RELATING TO TD S . IN THE SAID BACKGROUND OF THE MATTER, AO'S REPORT DTD.23.07.2013 BECOMES RELEVANT. THE AO HAS REPORTED THAT 3 PERSONS', NAMELY SHRI SHAH A LARN, SHRI SHAIKH TOHIRALI AND SHRI SYED NURUL ISLAM TO WHOM LABOUR CHARGES/WAGES HAD BEEN PAID APPEARED AND PRODUCED THEIR IDENTITY CARDS AND CONFIRMED THAT THEY WERE MAIN 'KARIGARS' AND ACTUALLY RECEIVED THE PAYMENT FOR DISTRIBUTION AMONG THE WORKERS. H OWEVER, BANK ACCOUNT DETAILS, WERE FURNISHED BY TWO OUT OF THE THREE PERSONS ONLY , WHICH TOO WERE INCOMPLETE. THE APPELLANT HOWEVER, STATED THAT EVEN THOUGH THE PAYMENT HAS BEEN MADE IN LUMP SUM TO THE MAIN 'KARIGARS', THE SAME HAS BEEN DISTRIBUTED TO VARI OUS WORKERS AS 'WAGES, AND TDS IS NOT APPLICABLE TO WAGES. I, THEREFORE, FROM THE DETAILS FURNISHED ALONGWITH THE REMAND REPORT FIND THAT THE APPELLANT IS CARRYING OUT EMBROIDERY AND ZARI WORK THROUGH PERSONS TO WHOM HE HAS MADE LUMP SUM PAYMENT. IT HAS NO T BEEN DISPUTED THAT PAYMENT HAS BE E N MADE TO 'KARIGARS'. THESE PAYMENTS ARE IN LIEU OF ITA NO. 1115/M/2014 &948/M/14 5 SERVICES OF 'KARIGARS' TAKEN BY THE APPELLANT. THEREFORE, THE NATURE OF WORK CARRIED OUT BY THE 'KARIGARS', STRICTLY SPEAKING, IS NOT CONTRACTUAL. CONSIDERING THE SAME, I HOLD THAT PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, ARE NOT APPLICABLE TO THESE PAYMENTS. I, THEREFORE, DELETE THE ADDITION OF THE AMOUNT OF RS.81,88,864/ - UNDER THE ABOVE SECTION. HOWEVER, THE AO, IN THE REMAND REPORT HAS GIVEN HIS FINDING THAT THE A PPELLANT HAS NOT BEEN ABLE TO ESTABLISH GENUINENESS OF THE ENTIRE PAYMENT OF RS.1 ,29,56,796/ - DEBITED UNDER THE , ABOVE HEAD. IN VIEW OF THE SAME, I CONFIRM THE DISALLOWANCE @ 20% OF THE ABOVE AMOUNT MADE BY THE AO. THE ADDITION OF RS.25,91 ,359/ - IS, TH EREFORE, UPHELD 8 . ON PERUSAL OF THE LD. CIT(A)S ORDER, THE REMAND REPORT SUBMITTED BY THE AO, FURTHER ENQUIRIES CONDUCTED BY THE LD. CIT(A) , W E DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) IN DELETING THE DISALLOWANCE MADE U/S. 40(A)(IA) OF THE ACT AS THE PAYMENT MADE BY THE ASSESSEE TO KARIGARS IS NOT CONTRACTUAL AND THEREFORE, THE PROVISIONS OF SEC. 194C HAVE NO APPLICATION. THE LD. CIT(A) , HOWEVER , SUSTAINED THE DISALLOWANCE MADE BY THE AO AT 20% OF THE LABOUR CHARGES H OLDING THAT ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THE GENUINENESS OF THE ENTIRE PAYMENT. 9 . THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING THE ORDER OF THE LD. CIT(A) IN PASSING EX - PARTE ORDER BY THE LD. CIT(A) AND ALSO SUSTAINING THE ADHOC DISALLOWA NCE BEING 20% OF TOTAL WAGES PAID TO WORKERS. THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING SUBMITS THAT GROUND NO. 1 OF THE GROUNDS OF APPEAL REGARDING SUFFICIENT OPPORTUNITY IS NOT PRESSED . T HEREFORE THE SAME IS DISMISSED AS NOT PRESSED. 1 0 . IN SO FAR AS THE ADHOC DISALLOWANCE SUSTAINED BY THE LD. CIT(A), THE LD. COUNSEL SUBMITS THAT THE CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE WITHOUT APPRECIATING THE FACT THAT IN THE ITA NO. 1115/M/2014 &948/M/14 6 COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD PR ODUCED THE PARTIES AND THEY HAD SUBMITTED THE PAN, BANK ACCOUNT COPY AND ALSO CONFIRMED THAT THEY HAVE RECEIVED THE LABOUR CHARGES . T HEREFORE HE SUBMITS THAT IT CANNOT BE SAID THAT THE PAYMENT AND INCURRING OF EXPENSES ARE NOT GENUINE. 1 1 . THE LD. DR VEHEMENTLY SUPPORTS THE ORDERS OF THE LOWER AUTHORITIES. 1 2 . WE FIND FROM THE LD. CIT(A)S ORDER THAT IN THE REMAND PROCEEDINGS ON EXAMINING THE PERSONS TO WHOM THE ASSESSEE IS SAID TO HAVE PAID THE LABOUR CHARGES, THE AO HAS STATED IN THE REMAND REPORT OBSERVING AS UNDER: THE PRESENT APPEAL IS AGAINST THE ABOVE DISAL L OWANCES AND ADDITIONS MADE IN T H E ASSESSMENT ORDER. ON AN EARLIER DIRECTION OF THE CIT( A ) VIDE HIS LETTER DATED 13.07.2009, THIS OFFICE VIDE LETTER - NO. I TO - 19(3)(2)/REMAND REPORT / 2010 - 11 DA TED 15.03.2011 HAS SUBMITTED A REMAND REPORT. COPY OF THE SAME IS ENCLOSED FOR REA D Y REFERENCE. THE LEARNED CL T (A) , VIDE HIS LETTER DATED 16.12.2011, HAS AGAIN DIRECTED THE AO TO GIVE ANOTHER OPPORTUNITY OF BEING HEARD TO THE APPEL L ANT AND CAUSE PROPER ENQUIRIES WITH REGARD TO T H E GENUINENESS O F THE LABOUR CHARGES/WAGES PAID TO THE WORKERS. ACCORDINGLY, A LETTER DATED 07.06.2013 WAS SENT TO THE ASSESSEE FIXING AN APPOINTMENT ON 13.06.2013. IN RESPONSE TO THE SAID LETTER, SHRI VIPUL SHAH, CA AND AR OF T HE ASSESSEE ATTENDED AND STATED THAT HE HAS SUBMITTED AL L THE DOCUMENTS BEFORE THE CIT(A) (COPIES OF WHICH WERE GIVEN TO THIS OFFICE VIDE CIT(A)'S AFORESAID LETTER). HE HAS AGREED TO PRODUCE THE ASSESSEE AS WELL AS SOME WORKERS TO WHOM THE ASSESSEE HAS GIV EN LABOUR CHARGES. THE CASE WAS , THEREFORE, ADJOURNED TO 19.06.2013. ON THE APPOINTED DAY, SHRI VIPUL SHAH ALONGWITH THE ASSESSE SHRI SYED KAMRUL ISLAM ATTENDED. THE FOLLOWING PERSONS HAVE ALSO BEEN PRODUCED BEFORE ME ON THE SAID DATE. ITA NO. 1115/M/2014 &948/M/14 7 (1) SHRI SHAH ALAM, S/O. ZUBER ALAM (2) SHRI SHAIKH TOHIR AII AND (3)SHRI SYTED NURUL ISLAM THE ABOVE THREE PERSONS' NAMES APPEAR IN THE ANNEXURE SUBMITTED BY THE ASSESSEE TO WHOM HE HAS CLAIMED TO HAVE PAID LABOUR CHARGE/WAGES. THEY HAVE PRODUCED THEIR ID PROOF VIZ. PAN CARD, D RIVING IICENCE AND ADHAAR CARD (ISSUED BY UNIQUE IDENTIFICATION AUTHORITY OF INDIA). THEY HAVE AGREED BEFORE ME THAT THEY WERE THE MAIN 'KARIGARS' DURING THE RELEVANT PERIOD AND RECEIVED PAYMENTS FROM THE ASSESSEE BY WAY OF EITHER IN CHEQUE OR CASH. AT PRESENT THEY ARE NO T DOING ANY WORK FOR THE ASSESSEE. IN ORDER TO ASCERTAIN WHETHER THEY HAVE ACTUALLY RECEIVED THE PAYMENTS FOR DISTRIBUTION AMONGST THE WORKERS, THEIR PASS BOOKS WERE CALLED FOR EXAMINATION. COPY OF THE BOOKS OF SHA IKH ALAM. MOHAMMED FOR THE PERIOD 1.1.2006 TO 31.12. 2009 MAINTAINED WITH DEVELOPMENT CREDIT BANK, KURLA AND STATEMENT OF ACCOUNT FROM 21.01.2005 TO 02.06.2005 OF SHRI SHAIKH TOHIR AII MAINTAINED WITH BANK OF INDIA HAVE BEEN FURNISHED. (COPY OF THESE DOCUM ENTS ARE ENCLOSED FOR YOUR KIND PERUSAL. NO BANK ACCOUNT WAS PRODUCED IN THE CASE OF SYED NURUL ISLAM . THE BANK ACCOUNTS PRODUCED WERE ALSO PARTIAL. THEY HAVE STATED THAT THE DEPOSITS REF L ECTED IN THE SAID ACCOUNTS ARE THE RECEIPTS FROM THE ASSESSEE BEING LABOUR CHARGES. THESE PAYMENTS WERE RECEIVED BY THEM IN LUMP SUM WHICH WERE TO DISTRIBUTE AMONGST THE WORKERS FOR THE WORK DONE BY THEM. THEY HAVE FURTHER STATED THAT THEY HAVE ALREADY SUBMITTED THE NECESSARY DOCUMENTS BEFORE THE CIT(A) I.E. PAN CAR/DRIVIN G LICENCE AND COPY OF LEDGER ACCOUNT AND CONFIRMATION LETTERS, COPIES OF WHICH WERE ALSO SHOWN TO THIS OFFICE. THE CONFIRMATION LETTERS ARE FOUND TO BE IN A STEREOTYPIC MANNER. WHEN ASKED ABOUT FILI N G OF INDIVIDUAL RETURN THEY HAVE STATED THAT THEY DID NOT FILE ANY RETURN. THEY HAVE FURTHER STATED THAT THE PAYMENT RECEIVED FROM THE ASSESSEE WERE DISTRIBUTED AMONGST THE LABOURERS WHO WERE TEMPORARILY APPOINTED FOR DOING THE JOB (EMBROIDERY/JERRY WORK). WHEN ASKED ABOUT MORE DETAILS ABOUT THESE WORKERS I.E. P RESENT WHEREABOUTS ETC.: SHRI VIPU SHAH, AR OF THE ASSESSEE ST ATED THAT THESE WORKERS HAVE COME FROM OTHER STATES IN SEARCH OF JOBS IS OVER AND ITA NO. 1115/M/2014 &948/M/14 8 SHIFT FROM THERE AS PER THE JOB REQUIREMENTS. HENCE, IDENTITY OF THESE WORKERS ARE NOT FULLY VERIFIABLE. THE ASS ESSEE WAS FURTHER ASKED WHETHER HE HAS DEDUCTED ANY TDS IN COMPLIANCE WITH THE PROVISIONS OF 194C OF THE ACT ON THE PAYMENTS MADE IN LUMP SUM TO KARIGARS, HE HAS STATED THAT NO T A X WERE DEDUCTED AT SOURCE. HE HAD ALSO NOT OBTAINED ANY CERTIFICATE U/S 197 FOR NON DEDUCTION OR LOW DEDUCTION OF TDS FROM THE DEPARTMENT. THE ASSESSEE HAS STATED THE REASON FOR NON DEDUCTION TDS IS THAT THESE PAYMENTS DO NOT FALL UNDER THE CATEGORY OF CON TRACT. THE ASSESSEE DID NOT ENTER INTO ANY CONTRACT AND AS SUCH THERE IS NO CONTRACT AGREEMENT BETWEEN THE ASSESSEE AND THE KARIGARS. FURTHER, THE ASSESSEE HAS STATED THAT EVEN THOUGH THE PAYMENT IS MADE IN LUMP SUM TO THE MAIN KARIGARS, THE SAME IS DISTR IBUTED TO V ARIOUS WORKERS AS WAGES ON WHICH TDS IS NOT APPLICABLE. AT THE TIME OF ASSESSMENT STAGE THE ASSESSEE HAD STATED THAT THE WORKERS ARE ILLITERATE AND IF TDS IS DEDUCTED FROM THE WAGES, THEY WILL NOT DO THE ASSESSEE'S JOB. MOREOVER, MOST OF THE WO RKERS ARE TEMPORARILY ENGAGED FOR GETTING THE WORK DONE, AND THEY SHIFT THEIR PLACE OF STAY FREQUENTLY DEPENDING UPON THEIR JOB, THEIR PRESENT WHEREABOUTS AND PROPER IDENTITY ARE NOT VERIFIABLE. IN THE ASSESSMENT ORDER IT WAS CONCLUDED THAT THE ASSESSEE H A D NOT DEDUCTED TDS UNDER SECTION 194 ON THE LABOUR CHARGES PAID, THE PROVISIONS OF SECTION 40(A)(IA) ARE SQUARELY APPLICABLE AND ACCORDINGLY ADDED THE LABOUR CHARGES PAID TO THE TOTAL INCOME . 1 3 . AS COULD BE SEEN FROM THE REMAND REPORT OF THE AO, THE ASSESSEE PRODUCED THE WORKERS TO WHOM HE HAS PAID LABOUR CHARGES. THEY HAVE PRODUCED THEIR ID PROOF , PAN, DRIVING LICENCE, ADHAR CARD. THEY HAVE STATED THAT THEY ARE THE MAIN K ARIGARS DURING RELEVANT PERIOD AND CONFIRMED THAT THEY HAVE RECEIVED THE PAYME NTS FROM THE ASSESSEE BY WAY OF EITHER IN CASH OR IN CHEQUE. THE WORKERS TWO OF THEM FILED COPY OF BANK BOOKS IN DEVELOPMENT CREDIT BANK, KURLA AND BANK OF INDIA. THEY HAVE ALSO CONFIRMED THAT THE LUMP SUM AMOUNTS RECEIVED FROM THE ASSESSEE ARE DISTRI BUTED AMONG OTHER WORKS AS WAGES. THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT ITA NO. 1115/M/2014 &948/M/14 9 PROVED INCURRING OF EXPENDITURE. T AKING ALL THESE FACTS INTO CONSIDERATION, WE ARE OF THE VIEW THAT THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN COMING TO THE CONCLUSION THAT THE EXPENSES ARE NOT GENUINE. IN THE CIRCUMSTANCES, WE DELETE THE ADHOC DISALLOWANCE MADE BY THE AO AT 20% OF LABOUR CHARGES. 1 4 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH FEBRUARY , 201 6 . SD/ - SD/ - ( RAJESH KUMAR ) ( C.N. PRASAD ) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI ; DATED : 24 TH FEBRUARY , 201 6 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI