The ACIT, Circle-9, Ahmedabad V. M/s. AKP Infrastructure, Ahmedabad

ITA 96/AHD/2006

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67962 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-09-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 09-01-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Keywords: Charitable institution; Additional evidence
• Section: 40A(3); 143(3)

Judgement Text

ITA NO 96/AHD/2006 . A.Y. 2002-0 3 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NO. 96 /AHD/2006 (ASSESSMENT YEAR: 2002-03) THE A.C.I.T, CIRCLE-9, AHMEDABAD (APPELLANT) VS. M/S. A.K.P. INFRASTRUCTURE. 303, SAARTHAK-II, SWASTIK CROSS ROAD, C.G. ROAD, NAVRANGPURA, AHMEDABAD (RESPONDENT) PAN: AAEFA7501Q APPELLANT BY : SHRI O.P. BATHEJA, SR. D.R . RESPONDENT BY : SHRI SAKAR SHARMA, A.R. ( )/ ORDER DATE OF HEARING : 25-09-20 13 DATE OF PRONOUNCEMENT : 22 -11-2013 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-XV, AHMEDABAD DATED 18.10.2005 FOR A.Y. 2002-03. 2. THE FACTS AS CULLED OUT FROM THE ORDER OF LOWER AUTHORITIES ARE AS UNDER. 3. ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF CI VIL CONTRACTOR AND BASICALLY ENGAGED IN THE WORK OF CONSTRUCTION OF ROADS. ASSES SEE FILED ITS RETURN OF INCOME FOR A.Y. 02-03 ON 31.10.2002 DISCLOSING TOTA L INCOME OF RS. 1,61,45,850/-. THE CASE WAS SELECTED FOR SCRUTINY A ND THEREAFTER THE ITA NO 96/AHD/2006 . A.Y. 2002-0 3 2 ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORD ER DATED 31 ST MARCH, 2005 AND THE TOTAL INCOME WAS DETERMINED AT RS. 5,6 9,07,150/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 18.10.2005 GRANTED SUBSTANT IAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A ), THE REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUN DS. 1. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS IN DELETING THE ADDITION MADE ON ACCOUNT OF SEPARATION OF CONTRACT RE CEIPT AMOUNTING TO RS,15,88,880/- IGNORING THE FACTS THAT THE AS SESSEE IS SUBCONTRACTOR AND HAS TO ACCOUNT FOR WHATEVER AMOUNT RECEIVED BY THE MAIN CONTRACTOR. 2. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON F ACTS IN DELETING THE ADDITION OF RS. 4,36,937/- MADE ON ACCOUNT OF DISALLOWANCE O F HIRE CHARGES PAID FOR EARTH MOVING MACHINERY, DISREGARDED THE FACTS THAT SUCH MACHINERY WAS AVAILABLE AT NEAR BY PLACES. 3. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN F ACTS ON DELETING THE ADDITION OF RS.12,050/- MADE ON ACCOUNT OF DISALLOWANCE OF L ABOUR EXPENSES IGNORING THE FACT THAT THE ASSESSEE COULD NOT PRODUCE ANY CO RROBORATIVE EVIDENCE IN SUPPORT OF SELF PREPAID VOUCHERS. 4. THE ID, CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS.22,000/- MADE ON ACCOUNT OF DISALLOWANCE OF R ENT PAID TO VANRAJSINH. PLEASE REGARDED TO FACT THAT OWNERSHIP OF PROPERTY HAS NOT BEEN PROVED. 5. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS, 3,22,778- MADE ON ACCOUNT OF DISALLOWANCE OU T OF OIL AND DIESEL EXPENSES IGNORING THE FACT THAT THE ASSESSEE HAS NO T MAINTAINED ANY LOG BOOK OR HAS SUBMITTED ANY PROOF FOR CONSUMPTION OF DIESE L AND OIL. 6. THE ID, CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 1,30,800/- MADE ON ACCOUNT OF DISALLOWANCE O F PAYMENT MADE TO CONTRACTOR FOR CUTTING OF TREES. PLEASE REGARDED TH E FACT THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE REGARDING GENUINENES S OF TRANSACTIONS. 7. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON F ACTS IN DELETING THE ADDITION OF RS, 14,19,942/- MADE ON ACCOUNT OF DISALLOWANCE OF PAYMENT MADE TO VIJAY CONSTRUCTION OF RS. 7,76,000/-, SHRI SARASWAT I CONSTRUCTION OF RS. 4,31,800/- AND SHRI SINGH BROTHERS OF RS. 2,12,142/ -. THE LD. CIT(A) HAS ALSO ERRED IN ADMITTING ADDITIONAL EVIDENCE IN CONTRAVEN TION OF RULE 46A OF I.T. RULES. 8. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 88,75,337/- MADE ON ACCOUNT OF PAYMENT MADE FOR THE PURCHASE OF MATERIAL AFTER COMPLETION OF WORK IGNORING THE FACT THAT THE ASSESSES FOLLOWS THE MERCANTILE SYSTEM OF ACCOUNT. 9. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 1,57,362/- REGARDING DISALLOWANCE OF PAYMENT MADE TO ADVANCE PETRO CORPORATION, THOUGH NO VALID EVIDENCE WAS PRODUCED FOR THE SAME. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 3 10. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS, 2,10,000/- MADE ON ACCOUNT OF PAYMENT MADE F OR ASPHALT AND CARTING EXPENSES. 11. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 32,900/- FOR BROKERAGE, THE LD. CIT(A) ALSO ERRED IN ENTERTAINING ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULES 46A O F I.T. RULE 1962. 12 THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON F ACTS IN DELETING THE ADDITION OF RS. 15,000/- FOR PAYMENT OF LEGAL EXPENSES. 13. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 49,600/- FOR PAYMENT OF MACHINERY EXPENSES. THE ID. C1T(A) HAS ALSO ERRED IN ENTERTAINING ADDITIONAL EVIDENCE IN CONTRA VENTION OF RULES 46A OF I. T. RULE 1962. 14. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 89,534/- MADE ON ACCOUNT OF DISALLO WANCE OF OIL EXPENSE. THE LD. CIT(A) HAS ALSO ERRED IN ENTERTAINING ADDITIONA L EVIDENCE IN CONTRAVENTION OF RULES 46A OF I.T. RULE 1962. 15. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. L,48,400/- MADE ON ACCOUNT OF DISALLOWANCE O F PIPE CARTING AND PIPE PURCHASE ACCOUNT. 16. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS, 46,000/- MADE ON ACCOUNT OF DISALLO WANCE OF PROFESSIONAL FEES. THE LD, CIT(A) ALSO ERRED IN ENTERTAINING ADD ITIONAL EVIDENCE IN CONTRAVENTION OF RULE 46A OF I. T. RULE 1962. 17. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 1,25,600/- MADE ON ACCOUNT OF PAYMENT OF REN T EXPENSE. 18. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 96,620/- MADE ON ACCOUNT OF DISALLO WANCE OF SAND CARTING AND SAND PURCHASE EXPENSES. THE LD. CIT(A) HAS ERRED I N ENTERTAINING ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULES 46A OF I.T. RULE 1962. 19. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 2,06,218/- MADE ON ACCOUNT OF DISALLOWANCE O F SITE CAMP EXPENSES. THE LD. CIT(A) ALSO ERRED IN ENTERTAINING ADDITIONA L EVIDENCE IN CONTRAVENTION OF RULES 46A OF I.T. RULE 1962. 20. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 10,000/- MADE ON ACCOUNT OF DISALLO WANCE OF SITE EXPENSES. THE ID, CIT(A) ALSO ERRED IN ENTERTAINING ADDITIONA L EVIDENCE IN CONTRAVENTION OF RULES 46A OF I. T. RULE 1962. 21. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 6,52,655/- MADE ON ACCOUNT OF DISAL LOWANCE OF DIESEL EXPENSES. THE LD. CIT(A) HAS ERRED IN ENTERTAINING ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULES 46A OF I. T. RULE 1962. 22. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 38,49,273/- MADE ON ACCOUNT OF DISALLOWANCE OF PURCHASE AND CARTING EXPENSES. THE ID. C1T(A) HAS ERRED IN ENTERTAINING ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULES 46A OF I.T. RULE 1962. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 4 23. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 1,68,200/- MADE ON ACCOUNT OF DISALLOWANCE O F MACHINERY HIRE CHARGES. THE ID. CIT(A) ERRED IN ENTERTAINING ADDIT IONAL EVIDENCE IN CONTRAVENTION OF RULES 46A OF I. T, RULES 1962. 24. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON F ACTS IN DELETING THE ADDITION OF RS. 18,04,206/- MADE ON ACCOUNT OF DISALLOWANCE OF MANUFACTURING EXPENSES, MACHINERY REPAIRS EXPENSES, OIL EXPENSES, SUB CONTRACT EXPENSES AND WATER CHARGES EXPENSES. THE LD. CIT(A) ERRED I N ENTERTAINING ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULES 46A OF I.T. RULE S 1962. 25. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 89,08,193/- MADE ON ACCOUNT OF DISALLOWANCE OF OUT OF DIESEL EXPENSE, AGGREGATE CARTING EXPENSE, MACHINERY HIRE CHARGES & CARTING, ROLLER HIRE CHARGES, JCB HIRE CHARGES, LOADER HIRE CHARGES, EXC AVATOR HIRE CHARGES, DUMPER HIRE CHARGES, GRAVEL CARTING EXPENSE AND LAB OUR EXPENSE. THE LD. CIT(A) ERRED IN ENTERTAINING ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULES 46A OF I.T. RULES 1962. 26. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS, 74,974/- MADE ON ACCOUNT OF DISALLOWANCE OF PAYMENT MADE TO GANESHKUMAR FOR MACHINERY REPAIR WORK. THE ID, CIT( A) ALSO ERRED IN ENTERTAINING ADDITIONAL EVIDENCE IN CONTRAVENTION O F RULES 46A OF I. T, RULES 1962. 27. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 3,32,940/- MADE ON ACCOUNT OF DISALLOWANCE O F PIPE PURCHASE AND ITS TRANSPORTATION. THE LD. CJT(A) ALSO ERRED IN ENTERTAINING ADDITIONAL EVIDENCE IN CONTRAVENTION OF ROADS I. T. RULES 1962 . 28. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 2,44,100/- MADE ON ACCOUNT OF DISALLOWANCE O F RENT THE LD, CIT(A) ALSO ERRED IN ENTERTAINING ADDITIONAL EVIDENCE IN CONTRA VENTION OF RULES 46A OF THE I.T. RULES 1962 . 29. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 53,028/- MADE ON ACCOUNT OF DISALLOWANCE OUT OF TRACTOR RENT . THE LD. C1T(A) ALSO ERRED IN ENTERTAINING ADDITIONAL EVIDEN CE WHICH IS IN CONTRAVENTION OF RULES, 46A OF I. T. RULES 1962 . 30. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 122949/- MADE ON ACCOUNT OF DISALLO WANCE OUT OF TREE CUTTING EXPENSES. THE ID. C.I.T (A) ALSO ERRED IN ENTERTAI NING ADDITIONAL EVIDENCE WHICH IS IN CONTRAVENTION OF RULES. 46A OF I.T. RUL ES 1962. 31. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 85,307/- MADE ON ACCOUNT OF DISALLOWANCE OUT OF WATER TANKER HIRE CHARGES. THE LD. C.I.T (A) ALSO ERRED IN ENTERTAINI NG ADDITIONAL EVIDENCE WHICH IS IN CONTRAVENTION OF RULES, 46A OF I. T. RULES 19 62 . 32. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 4,60,857/- MADE ON ACCOUNT OF DISALLOWANCE OUT OF DIESEL EXPENSES. THE LD. CIT(A) ALSO ERRED IN ENTERTAINING ADDITIONA L EVIDENCE WHICH IS IN CONTRAVENTION OF RULES, 46A OF I.T. RULES 1962. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 5 33 THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS,1,78,088/- MADE ON ACCOUNT OF DISALLOWANCE OU T OF LD.O, EXPENSES. THE ID. C.I.T (A) ALSO ERRED IN ENTERTAINING ADDITI ONAL EVIDENCE WHICH IS IN CONTRAVENTION OF RULES, 46A OF I. T. RULES 1962 . 34. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON F ACTS IN DELETING THE ADDITION OF RS 2,04,000/- BEING CARTING EXPENSES PAID TO SHR I DHIRUBHAI DHORIA. THE ID, C.I.T (A) ALSO ERRED IN ENTERTAINING ADDITIONAL EVI DENCE WHICH IS IN CONTRAVENTION OF RULES, 46A OF I. T. RULES 1962. 35. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS.140160/- BEING TRACTOR HIRE CHARGES. THE ID. C.I.T (A) ALSO ERRED IN ENTERTAINING ADDITIONAL EVIDENCE WHICH IS IN CONTRA VENTION OF RULES, 46A OF I. T. RULES 1962. 36. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS.3,80,000/- BEING LABOUR WELFARE EXPENSE. THE ID. C.I.T (A) ALSO ERRED IN ENTERTAINING ADDITIONAL EVIDENCE WHICH IS IN CONTRA VENTION OF RULES, 46A OF I. T. RULES 1962. 37. THE ID. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 5,33,408/- BEING MACHINERY REPAIRING EXPENSE . THE ID. C.I.T (A) ALSO ERRED IN ENTERTAINING ADDITIONAL EVIDENCE WHICH IS IN CONTRAVENTION OF RULES, 46A OF I. T. RULES 1962. 38. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 40,07,158/- BEING OUT OF VARIOUS EX PENSES AT JAMNAGAR SITE. THE ID, C.I.T (A) ALSO ERRED IN ENTERTAINING ADDITI ONAL EVIDENCE WHICH IS IN CONTRAVENTION OF RULES, 46A OF I. T. RULES 1962. 1 ST GROUND IS WITH RESPECT TO ADDITION MADE OF RS. 15, 88,880/- ON ACCOUNT OF CONTRACT RECEIPTS. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NOTICED THAT THERE WAS VARIATION IN INCOME AS PER THE TDS CERTIFICATES ENC LOSED BY THE ASSESSEE AND THAT SHOWN IN ITS BOOKS OF ACCOUNT, THE DIFFERENCE BEING RS. 15,88,800/-. THE ASSESSEE WAS ASKED TO RECONCILE THE DIFFERENCE. ASS ESSEE INTERALIA SUBMITTED THAT FOR WORK DONE AT BHACHAU SITE THE BANK GUARANT EE OF RS. 4,22,025/- ISSUED TO GOVERNMENT OF GUJARAT WAS ENCASHED BY THE CLIENT. HE FURTHER SUBMITTED THAT THE BALANCE AMOUNT OF RS. 8,76,560/- HAS BEEN KEPT BY M/S A.K. PATEL & CO. CONSTRUCTION PRIVATE LIMITED. THE A.O. DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE, HE ACCORDINGLY MADE AN ADDITION OF RS. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 6 15,88,800/-. ASSESSEE CARRIED THE BEFORE CIT(A),CI T(A) DELETED THE ADDITION BY HOLDING AS UNDER:- 3.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE CAREFULLY AND HAVE ALSO CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THE TRANSACTION BETWEEN M/ S. A. K. PATEL & CO. (CONST.) PVT. LTD. AND THE APPELLANT IS BETWEEN MAI N CONTRACTOR AND SUBCONTRACTOR AND NOT AS BETWEEN PARTNER AND FIRM A S OBSERVED BY THE ASSESSING OFFICER . THE MAIN CONTRACTOR M/S. A. K. PATEL & CO. (CONST.) PVT. LTD. RAISED A BILL OF RS.46,00,900/- ON THE CONCERN ED GOVT. DEPARTMENT OUT OF WHICH A BILL OF RS.43,10,685/- WAS APPROVED BY THE CONCERNED AUTHORITY . SUBSEQUENTLY THE DEPARTMENT MADE A CLAIM FOR RECOVE RY OF RS. 12,98,585/-ON ACCOUNT OF DIFFERENCE IN QUANTITY OF DEBRIS REMOVED BY THE CONTRACTOR. THEREFORE, THE NET WORK DONE DURING THE YEAR IS OF RS.30,12,100/- (RS.43, 10,685/- MINUS RS. 12,98, 585/-). AS THIS WAS A BAC K TO BACK CONTRACT THE NET BILL AMOUNT OF RS.30,12,100/- HAS BEEN SHOWN AS CON TRACT RECEIPT BY THE APPELLANT FIRM. EVEN OTHERWISE THE APPELLANT FIRM C OULD HAVE SHOWN RS.43, 10,685/- AS GROSS CONTRACT RECEIPT AND CLAIMED RS. 12,98.585/- AS EXPENSE. THE END RESULT WOULD HAVE BEEN THE SAME. CONSIDERIN G THESE FACTS, I AM OF THE OPINION THAT THERE IS NO JUSTIFICATION FOR ADDI TION OF RS. 15, 88, 880/- .AND IN ANY CASE , IN FUTURE WHEN THE APPELLANT WILL GET BA CK THE AMOUNT ON SETTLEMENT OF DISPUTE, THE APPELLANT WILL ACCOUNT THE SAME IN SUBSEQUENT YEAR, HENCE THE ADDITION IS DELETED . 5. AGGRIEVED BY THE ORDER OF CIT(A) REVENUE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A .O. THE LD. A.R. ON THE OTHER HAND SUBMITTED THAT A SUB-CONTRACT WAS TAKEN ON BAC K TO BACK BASIS FROM A.K. PATEL & CO. FOR CARTING OF REMOVAL OF DEBRIS F ROM THE EARTH QUAKE AFFECTED AREAS IN KUTCH DISTRICT. AS PER THE TERMS OF SUB-CO NTRACT, ASSESSEE WAS ENTITLED TO RECEIPT ENTIRE AMOUNT PAID BY GOVERNMEN T DEPARTMENT LESS COMMISSION OF PRINCIPAL CONTRACTOR. THE ASSESSEE H AD OFFERED INCOME NET OF DEDUCTION. HE FURTHER SUBMITTED THAT THE FULL BILL OF THE ASSESSEE WAS NOT ADMITTED BUT LESSER VALUE WAS PASSED BY THE GOVERNM ENT DEPARTMENT. HE FURTHER SUBMITTED THAT THE DIFFERENCE BETWEEN THE G ROSS VALUE OF BILL AND THE AMOUNT ACTUALLY OFFERED WAS RECOVERED BY GOVERNMENT DEPARTMENT BY ENCASHING BANK GUARANTEE AND DEDUCTING AMOUNTS DUE TO THE PRINCIPAL CONTRACTOR. HE THEREFORE SUBMITTED THAT THE ASSESS EE HAD DISCLOSED THE CORRECT INCOME AND HE THUS SUPPORTED THE ORDER OF C IT(A). ITA NO 96/AHD/2006 . A.Y. 2002-0 3 7 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE GRANTING RELIEF TO THE ASSES SEE HAS NOTED THAT THE MAIN CONTRACTOR A.K. PATEL AND CO. RAISED THE BILL OF RS . 46,00,900/- ON THE CONCERNED GOVERNMENT DEPARTMENT OUT OF WHICH BILL O F RS. 43,10,685/- WAS APPROVED BY CONCERNED AUTHORITY. SUBSEQUENTLY, THE DEPARTMENT MADE A CLAIM FOR RECOVERY OF RS. 12,98,585/- ON ACCOUNT OF DIFFERENCE IN QUANTITY OF DEBRIES REMOVED BY THE CONTRACTOR. HE FURTHER NOTE D THAT THE ASSESSEE HAS CONSIDERED THE NET AS ITS INCOME. BEFORE US, THE LD . D.R. COULD NOT CONTROVERT THE FINDINGS OF CIT(A) NOR COULD BRING ANY CONTRARY MATERIAL ON RECORD. IN VIEW OF THESE FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A). THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 2 IS WITH RESPECT TO HIRE CHARGES OF RS. 4,36,937/-. 8. A.O. NOTICED THAT FOR REMOVAL OF DEBRIS, ASSESSE E HAD USED MACHINERIES LIKE EXCAVATORS, LOADER, DUMPER ETC. HE ALSO NOTICED THA T SOME OF THESE MACHINERIES WERE TAKEN ON HIRE FROM OUTSIDE PARTIES FROM FAR FLUNG PLACES LIKE SURAT THOUGH AS PER THE A.O, THE MACHINERIES WERE AVAILABLE AT NEARBY PLACES LIKE JAMNAGAR, MEHSANA ETC. THE ASSESSEE WA S THEREFORE ASKED TO JUSTIFY THE EXPENSES. THE EXPLANATION AND JUSTIFICA TION SUBMITTED BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE ASSESSING OFFICER. HE THEREAFTER CONSIDERED THE TOTAL EXCAVATOR CHARGES OF RS. 13,27 ,970/- PAID TO VARIOUS PARTIES AS NOT SATISFACTORILY EXPLAINED AND THEREAF TER HE DISALLOWED 20% OF THE SAME AMOUNTING TO RS. 4,36,937/- AND ADDED TO THE I NCOME. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CI T(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 5.2 1 HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHOR ISED REPRESENTATIVE CAREFULLY . THE ASSESSING OFFICER IN HIS REMAND REP ORT HAS REPORTED THAT THE APPELLANT HAS NOT PRODUCED VOUCHERS AND NECESSA RY EVIDENCES IN SUPPORT OF THE EXPENSES CLAIMED AND HENCE , THE DIS ALLOWANCES MADE BY ITA NO 96/AHD/2006 . A.Y. 2002-0 3 8 THE ASSESSING OFFICER ARE GENUINE AND MADE AFTER DU E VERIFICATION OF BOOKS OF ACCOUNTS. IT IS FOUND THAT THE TENDER FOR THIS PARTICULAR WORK WAS FOR 45 DAYS AND 130210 MT OF DEBRIS WAS LIFTED. FOR DOING THE SAID WORK THE APPELLANT HAD NO EXCAVATORS. THE APPELLANT HAD ONE LOADER, ONE DOZER AND 5 DUMPERS. SO THE APPELLANT HAD TO HIRE 5 EXCAV ATORS, 34 DUMPERS , 5 SETS OF MACHINERIES , 5 EXCAVATORS WORK ED FOR 45 DAYS .THE AUTHORISED REPRESENTATIVE HAS FURNISHED A WORKING A S PER PAGE 10 OF THE PAPER BOOK SHOWING THAT ONE SET OF MACHINERY CAN LI FT 600 MT PER DAY AND 5 SETS OF MACHINERIES IN 45 DAYS COULD HAVE LIF TED 135000 MT WHICH IS CLOSE TO THE ACTUAL AMOUNT OF DEBRIS LIFTED BY T HE APPELLANT OF 130210 MT .THE AUTHORISED REPRESENTATIVE HAS FILED COPIES OF ACCOUNTS OF INDIVIDUAL PARTIES SHOWING THE PAYMENTS MADE AS PER PAGES 13 TO 25 OF THE PAPER BOOK .THE MAJORITY OF PAYMENTS HAVE BEEN MADE BY CHEQUES AND THE OUTSTANDING PAYMENTS HAVE BEEN MADE IN THE SUBSEQUENT YEARS . CONSIDERING THESE FACTS AND THE JUSTIFICATION GIV EN BY THE AUTHORISED REPRESENTATIVE FOR WORKING BY 5 SETS OF MACHINERIES WITHOUT WHICH THE DEBRIS OF SO MUCH QUANTITY COULD NOT HAVE BEEN REMO VED, I AM OF THE OPINION THAT THERE IS NO JUSTIFICATION FOR DISALLOW ANCE OF ADHOC 20 % OF SUCH EXPENSES I.E. OF RS.4,36,937/-, HENCE THE DISA LLOWANCE MADE BY THE ASSESSING OFFICER IS DELETED. 9. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US. 10. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND THE LD. A.R. SUBMITTED THAT THE DISALLOWANCE MADE BY THE A. O. IS ON THE BASIS OF SUSPICION, PRESUMPTION AND ON ESTIMATE BASIS. HE F URTHER SUBMITTED THAT NO DEFECT HAS BEEN POINTED OUT BY THE A.O. HE THUS SUP PORTED THE ORDER OF CIT(A). 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS MADE BY TH E ASSESSEE HAS NOTED THAT THE MACHINERIES WAS NECESSARY FOR REMOVING THA T THE DEBRIES. HE HAS ALSO NOTED THAT THE MAJORITY OF THE PAYMENTS HAVE B EEN MADE BY CHEQUES AND THE OUTSTANDING PAYMENTS HAVE BEEN MADE IN SUBSEQUE NT YEARS. HE HAS THEREAFTER GIVEN A FINDING THAT THERE WAS NO JUSTIF ICATION FOR DISALLOWANCE OF AD- HOC 20% OF THE EXPENSES. BEFORE US, THE REVENUE COU LD NOT CONTROVERT THE FINDINGS OF CIT(A) NOR COULD BRING ANY CONTRARY MAT ERIAL ON RECORD. IN VIEW OF ITA NO 96/AHD/2006 . A.Y. 2002-0 3 9 THESE FACTS, WE FIND NO REASON TO INTERFERE WITH TH E ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 3 IS WITH RESPECT TO DISALLOWANCE OF LAB OUR EXPENSES OF RS. 12,050/- 12. A.O. NOTICED THAT ASSESSEE HAD PAID RS. 12,050/ - TO BASANI H. NARANBHAI FOR CONSTRUCTION OF PLATFORM FOR WEIGHBRIDGE. THE ASSES SEE WAS ASKED TO FURNISH THE EXPLANATION WITH RESPECT TO THE AFORESAID EXPEN SES. THE EXPLANATION SUBMITTED BY THE ASSESSEE WAS NOT FOUND SATISFACTOR Y BY THE A.O, HE ACCORDINGLY DISALLOWED THE SAME. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) DELETED T HE ADDITION BY HOLDING AS UNDER:- 6.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE CAREFULLY. THE EXPENDITURE HAS BEEN INCURRED IN CAS H FOR CONSTRUCTION OF TEMPORARY WEIGHBRIDGE ROOM, THE DETAILS OF EXPENDIT URE HAVE BEEN FILED AT PAGES 26 AND 27 OF THE PAPER BOOK .AS THE EXPENDITU RE HAD TO BE INCURRED BY THE APPELLANT FOR CONSTRUCTION OF TEMPORARY WEIGHBR IDGE ROOM, THE INCURRING OF THE SAID EXPENDITURE CAN NOT BE DOUBTED . ACCORDIN GLY THE DISALLOWANCE IS DELETED . 13. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. 14. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. THE LD. A.R. ON THE OTHER HAND SUBMITTED THAT THE AMOUNT WAS SPENT ON CONSTRU CTION OF TEMPORARY PLATFORM FOR WEIGHBRIDGE AT THE PROJECT SITE. HE F URTHER SUBMITTED THAT THE EXPENDITURE WAS FOR THE PURPOSE OF BUSINESS. HE THU S SUPPORTED THE ORDER OF CIT(A). 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) HAD HELD THAT THE EXPENDITURE INCU RRED FOR THE CONSTRUCTION OF TEMPORARY WEIGHBRIDGE CANNOT BE DOUBTED. BEFORE US THE REVENUE COULD NOT ITA NO 96/AHD/2006 . A.Y. 2002-0 3 10 CONTROVERT THE FINDINGS OF CIT(A). WE THEREFORE FIN D NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS GROUND OF REVENUE IS DISMISSED. GROUND NO. 4 IS WITH RESPECT TO ADDITION OF RS. 22, 000/- BEING RENT PAID FOR ROOM FOR WEIGHBRIDGE. 16. A.O. NOTICED THAT ASSESSEE HAD PAID RS. 22,000/ - TO SHRI BANRAJ SINGH. ASSESSEE WAS ASKED TO SUBMIT VERIFICATION FOR THE E XPENSE. ASSESSEE INTERALIA SUBMITTED THAT ASSESSEE HAD TAKEN ROOM ON RENT FOR HIS LABOURERS, SUPERVISORS, DRIVERS WHO WERE WORKING AT THE SITE F OR A SHORT PERIOD OF 2 TO 3 MONTHS, THE AMOUNT WAS PAID WAS WITH RESPECT TO REN T. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O. AS HE WAS OF THE VIEW THAT THE ASSESSEE HAS NOT PROVED THE GENUINENESS OF EXPENSES BY ESTABLISHING OWNERSHIP OF THE PROPERTY FOR WHICH THE RENT WAS PA ID. HE ACCORDINGLY DISALLOWED AMOUNT OF RS. 22,000/- AND ADDED TO THE INCOME. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFOR E CIT(A), CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 7. 2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HAVE BEEN CONSIDERED CAREFULLY . IT IS SEEN THAT THE APPELLANT HAS TO TA KE SPACE AND OPEN SITE ON RENT NEAR THE SITE AT BACCHAU FOR 45 DAYS TILL THE WORK WAS GOING ON. THE DETAILS OF THE EXPENDITURE HAVE BEEN FILED AT PAGES 28 AND 29 OF THE PAPER BOOK. AS THE EXPENDITURE HAS BEEN INCURRED AT THE SITE BY THE AP PELLANT, THERE IS NO JUSTIFICATION FOR ANY DISALLOWANCE , ACCORDINGLY TH E DISALLOWANCE IS DELETED . 17. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. 18. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND THE LD. A.R. SUBMITTED THAT THE AMOUNT WAS SPENT ON RENT PA ID FOR ROOM RETAINED FOR STAY OF STAFF AT THE PROJECT SITE. HE THUS SUPPORT ED THE ORDER OF CIT(A). 19. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE HAS NOTED THAT ITA NO 96/AHD/2006 . A.Y. 2002-0 3 11 ASSESSEE HAD TAKEN SPACE AND OPEN SITE ON RENT FOR 45 DAYS. AFTER CONSIDERING THE DETAILS OF EXPENDITURE HE HAS HELD THAT THE EXPENDITURE WAS INCURRED AT SITE BY THE ASSESSEE. THE AFORESAID FI NDINGS OF CIT(A) COULD NOT BE CONTROVERTED BY REVENUE, WE THEREFORE FIND NO RE ASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 5 IS WITH RESPECT TO DISALLOWANCE OF OIL AND DIESEL EXPENSES. 20. A.O NOTICED THAT ASSESSEE HAS CLAIMED OIL AND D IESEL EXPENSES OF RS. 16,30,894/-. THE ASSESSEE WAS ASKED TO ESTABLISH TH E USE OF MACHINERY AND ALSO PRODUCE THE LOG BOOKS OF THE VEHICLE, THE PRO OF OF ACTUAL CONSUMPTION OF OIL AND DIESEL BY THE VEHICLES. IN THE ABSENCE OF LOG BOOKS AND PROOF OF ACTUAL CONSUMPTION, A.O DISALLOWED 20% OF EXPENSES AMOUNTI NG TO RS. 3,22,778/- AND ADDED IT TO THE INCOME. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A), CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 8.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY. THE AUTHORISED REPRESENTATIVE HAS FILED A WORKING ON THE BASIS OF TONS OF DEBRIS REMOVED, NUMBER OF MACH INERIES USED , TRIPS MADE AND KILOMETERS RUN BY THE MACHINERIES ACCORDING TO WHICH THE APPELLANT HAS CONSUMED 92,000 LITRES OF DIESEL .FOR RUNNING OF 5 EXCAVATORS , 39 DUMPERS , ONE LOADER , TWO DOZERS , ONE WATER STORAGE TANKER AND ONE DIESEL STORAGE TANKER AT PAGES 30 AND 31 OF THE PAPER BOOK . THE A PPELLANT HAS SHOWN PURCHASES OF 92,567 LITRES OF DIESEL FROM KAILASH A UTO, THE DETAILS OF WHICH HAVE BEEN FILED AT PAGES 32 TO 45 OF THE PAPER BOOK . PAYMENTS TO KAILASH AUTO SERVICE HAVE BEEN MADE DURING THE YEAR BY CHEQ UES AND ONLY AMOUNT OF RS.2,52,512/- WAS OUTSTANDING AT THE YEAR END OU T OF TOTAL BILLS RAISED BY THE SAID PARTY OF RS. 18,34,519/-. COPIES OF BILLS ISSUED BY THE SAID PARTY HAVE BEEN FILED AT PAGES 37 TO 45 OF THE PAPER BOOK. CON SIDERING THE ABOVE FACTS AND THE DETAILS FILED AND ALSO JUSTIFICATION FOR CO NSUMPTION OF 92000 LITRES OF DIESEL, I DO NOT FIND ANY JUSTIFICATION FOR ANY DIS ALLOWANCE OUT OF DIESEL EXPENSES, ACCORDINGLY THE DISALLOWANCE IS DELETED. 21. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 12 22. BEFORE US THE LD. D.R. RELIED ON THE ORDER OF A .O. THE LD. A.R. ON THE OTHER HAND SUBMITTED THAT ASSESSEE HAD FILED ALL THE DETA ILS FOR THE EXPENSES INCURRED AND THE DISALLOWANCE HAS BEEN MADE BY A.O. ON AN ESTIMATE BASIS. HE FURTHER SUBMITTED THAT THE EXPENSES WERE INCURRE D FOR THE PURPOSE OF BUSINESS AND IN THE ABSENCE OF ANY DEFECT POINTED O UT BY THE A.O, NO DISALLOWANCE CAN BE MADE. HE THUS SUPPORTED THE OR DER OF A.O. 23. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE AND THE DETAILS SUBMITTED BY THE ASSESSEE HAS NOTED THAT THE JUSTIF ICATION OF CONSUMPTION OF DIESEL SUBMITTED BY THE ASSESSEE NEEDS TO BE ACCEPT ED IN VIEW OF THE FACT THAT THE DIESEL WAS USED FOR RUNNING OF EXCAVATOR, DUMPERS, LOADERS ETC. BEFORE US, THE REVENUE COULD NOT CONTROVERT THE FIN DINGS OF CIT(A). WE THEREFORE FIND NO REASON TO INTERFERE WITH THE ORDE R OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 6 IS WITH RESPECT TO DISALLOWANCE OF RS. 1,30,800/- MADE TO CONTRACTOR FOR CUTTING OF TREES. 24. A.O NOTICED THAT ASSESSEE HAS PAID RS. 1,30,800 /- TO KANUBHAI KHIMJIBHAI FOR TREE CUTTING AND MISCELLANEOUS LABOUR WORK AT RIL S ITE, GANDHINAGAR. THE ASSESSEE WAS ASKED TO ESTABLISH THE IDENTITY OF SHR I KANUBHAI AND HIS CAPACITY TO EXECUTE THE WORK AND THE GENUINENESS OF TRANSACTION. THE ASSESSEE WAS ALSO ASKED TO PRODUCE KANUBHAI, SHRI K ANUBHAI APPEARED BEFORE THE A.O AND SUBMITTED THAT HE HAD EMPLOYED L ABOURERS FOR COMPLETING THE WORK AND HAD ALSO RECEIVED PAYMENT FROM THE ASS ESSEE IN THE FORM OF WEEKLY WITHDRAWAL AT THE RATE OF RS. 200 PER LABOUR IN CASH. HE FURTHER SUBMITTED THAT HE HAS NEITHER MAINTAINED THE BOOKS OF ACCOUNTS NOR FILED HIS RETURN OF INCOME. HE FURTHER EXPRRESSED HIS INABIL ITY TO PRODUCE ANY PROOF REGARDING THE HIRING OF LABOUR OF PAYMENT MADE TO T HEM. A.O. NOTED THAT THE STATEMENT MADE BY KANUBHAI DID NOT MATCH ENTRIES MA DE BY THE ASSESSEE IN ITA NO 96/AHD/2006 . A.Y. 2002-0 3 13 ITS BOOKS OF ACCOUNT. HE FURTHER NOTED THAT THE PAY MENTS SHOWN BY THE ASSESSEE THERE WERE NO CORRESPONDING ENTRIES APPEAR ING IN THE PASS BOOK OF SHRI KANUBHAI. HE THUS CONCLUDED THAT THE GENUINEN ESS OF TRANSACTION WAS NOT ESTABLISHED AND ACCORDINGLY CONSIDERED THE AMOU NT PAID TO SHRI KANUBHAI AS NON GENUINE. AGGRIEVED BY THE ORDER OF A.O, ASSE SSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE DELETED THE ADDITION MADE BY THE A.O. BY HOLDING AS UNDER:- 9.3 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY. THE APPELLANT HAD UNDERTAKEN THE CONSTRU CTION OF ROADS IN CAMPUS OF RELIANCE INDUSTRIES INSTITUTE OF INFORMATION & T ECHNOLOGY AND HAD ENGAGED LABOUR CONTRACTOR KANUBHAI FOR 2 MONTHS. IT IS NOT ICED THAT THE APPELLANT HAS SHOWN NET PROFIT OF RS. 16.08 LAKHS ON CONTRACT REC EIPT OF RS.39.41 LAKHS WHICH WORKS OUT TO GP OF 40.80 % AND IF DISALLOWANC E MADE BY THE ASSESSING OFFICER IS TAKEN INTO ACCOUNT , THE GP WOULD WORK O UT TO STILL HIGHER PERCENTAGE .AS WORK OF CUTTING TREES HAS BEEN DONE BY THE LABO UR CONTRACTOR AND THE AUTHORISED REPRESENTATIVE HAS FILED AT PAGES 48 TO 57 OF THE PAPER BOOK ,COPY OF ACCOUNT OF THE LABOUR CONTRACTOR , AFFIDAV IT FROM THE SAID PERSON , COPY OF BILL RAISED BY HIM AND THE COPY OF BANK PASS BOO K OF THE PARTY WITH BANK OF BARODA AND MAJOR AMOUNT HAS BEEN PAID DURING THE YE AR ITSELF EXCEPT AN AMOUNT OF RS. 10,966/- , I AM OF THE OPINION THAT T HERE IS NO JUSTIFICATION FOR ANY DISALLOWANCE , ACCORDINGLY THE DISALLOWANCE IS DELETED . 25. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. 26. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. THE LD. A.R. ON THE OTHER HAND SUBMITTED THAT SHRI KANUBHAI APPEARED BEFORE T HE A.O AND HAVE CONFIRMED THE WORK DONE BY HIM AND ALSO THE RECEIPT OF PAYMENT FROM THE ASSESSEE. HE THUS SUPPORTED THE ORDER OF CIT(A). 27. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. CIT(A) WHILE DELETE THE ADDITION HAS NOTED THAT THE ASSESSEE HAD ENGAGED LABOUR CONTRACTOR KANUBHAI FOR 2 MONTHS. BEFORE CIT (A) THE COPY OF HIS PASS BOOK AND AFFIDAVIT AS WELL AS MEASUREMENT SHEET OF WORK DONE BY KANUBHAI WAS SUBMITTED. CIT(A) HAS FURTHER NOTED THAT THE M AJOR AMOUNT OF EXPENSES HAS BEEN PAID BY THE ASSESSEE DURING THE YEAR. BEF ORE US, THE REVENUE COULD NOT CONTROVERT THE FINDINGS OF CIT(A) NOR COU LD BRING ANY CONTRARY ITA NO 96/AHD/2006 . A.Y. 2002-0 3 14 MATERIAL ON RECORD. IN VIEW OF THESE FACTS WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 7 IS WITH RESPECT TO DISALLOWANCE OF RS. 14,19,942/- MADE TO THREE PARTIES. 28. A.O. NOTICED THAT ASSESSEE HAS CLAIMED TO HAVE MADE PAYMENT OF RS. 7,76,000/- TO VIJAY CONSTRUCTION RS. 4,31,800/- TO SARASWATI CONSTRUCTION AND RS. 2,12,142/- TO SINGH BROTHERS. THE ASSESSEE WAS ASKED TO PRODUCE THE THREE PARTIES TO WHOM IT HAD CLAIMED TO HAVE MADE T HE PAYMENTS. SINCE THE ASSESSEE COULD NOT PRODUCE THE PARTIES. A.O. CONCLU DED THAT ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF TRANSACTION BY E STABLISHING THE IDENTITY OF THE PERSON, THEIR CAPACITY AS TO RENDER SERVICES AN D ALSO THE GENUINENESS OF TRANSACTION. HE ACCORDINGLY HELD THE AGGREGATE AMOU NT OF RS. 14,19,942/- AS NON GENUINE EXPENSES AND ACCORDINGLY DISALLOWED THE SAME. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFOR E CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE DE LETED THE ADDITION BY HOLDING AS UNDER:- 10.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTAT IVE HAVE BEEN CONSIDERED CAREFULLY. THE AUTHORIZED REPRESENTATIVE HAS FILED A SUMMARY OF QUANTITY OF WORK DONE AS PER BILLS OF CONTRTACTEE A T PAGES 46 AND 47 OF THE PAPER BOOK AND HAS ARRIVED AT DETAILS OF MAJOR ITEM S CONSUMED AT GANDHINAGAR SITE LIKE WBM (WET BASED MACADAM), GSB( GRANULAR SUB BASE), BITUMINOUS WORK AND HAS WORKED OUT QUANTITY OF AGGR EGATE PURCHASE AS 2326.800 MT, ASPHALT OF 447 TONS AND G.S.B. PURCHAS ED OF 2333.300 TONS. THE AGGREGATE HAS BEEN PURCHASED FROM KODIYAR TRADE RS, ASPHALT HAS BEEN PURCHASED FROM SARASWATI CONSTRUCTION AND G.S.B. HA S BEEN PURCHASED FROM SINGH BROTHERS. PAYMENT TO VIJAY CONSTRUCTION HAS B EEN MADE FOR MIXING AND LABOUR. THE AUTHORIZED REPRESENTATIVE HAS FILED CO PIES OF ACCOUNTS OF THE THREE PARTIES AT PAGES 58 TO 76 OF THE PAPER BOOK. COPIES OF ACKNOWLEDGEMENT OF RETURN OF INCOME OF THE PARTIES SRI VIJAY CONSTRUCTION AND SARASWATI CONSTRUCTION CO. HAVE BEEN FILED BY T HE AUTHORIZED REPRESENTATIVE. COPIES OF BILLS RAISED BY SARASWATI CONSTRUCTION CO. AND SINGH BROTHERS HAVE BEEN FILED AT PAGES 72 AND 77 I N THE PAPER BOOK. IN VIEW OF THE ABOVE FACTS, AS THE IDENTITY OF THE PERSONS HAS BEEN PROVED, TWO PARTIES ARE ASSESSED TO TAX, PAYMENTS HAVE BEEN MADE BY CHE QUES TO THEM AND THE APPELLANT HAS SHOWN GP OF 40.80% AS STATED ABOVE, I HOLD THAT THERE IS NO ITA NO 96/AHD/2006 . A.Y. 2002-0 3 15 JUSTIFICATION FOR DISALLOWANCE OF THE PAYMENTS MADE TO THEM. THEREFORE, THE DISALLOWANCE OF RS. 14,19,942/- IS DELETED. 29. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. 30. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. BEFORE CIT(A) ASSESSEE FILED THE COPIES OF THE RETURN, CONFIRMATION OF ACC OUNTS COPIES OF BILLS RAISED SHOWING THE DETAILS OF QUANTITY OF WORK DONE. CIT( A) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE NOTED THAT THE IDE NTITY OF THE PERSONS HAS BEEN PROVED. HE HAS FURTHER NOTED THAT THE TWO PAR TIES NAMELY VIJAY CONSTRUCTION AND SARASWATI CONSTRUCTION ARE ASSESSE D TO TAX, THE PAYMENTS HAVE BEEN MADE BY CHEQUES. AFTER CONSIDERING THE SU BMISSIONS AND THE DETAILS SUBMITTED HE HAS NOTED THAT THERE WAS NO JU STIFICATION FOR DISALLOWANCE OF PAYMENTS MADE TO THEM. BEFORE US, THE REVENUE CO ULD NOT CONTROVERT THE FINDINGS OF CIT(A) AND THEREFORE WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 8 IS WITH RESPECT TO ADDITION OF RS. 88, 75,337/-. 31. A.O. NOTICED THAT ASSESSEE WAS EXECUTING ROAD C ONSTRUCTION AT PIPLI SITE. THE ASSESSEE WAS ASKED TO JUSTIFY PURCHASE OF ASPHALT, LABOUR EXPENSES AND OTHER EXPENSES. THE ASSESSEE WAS ASKED TO ESTABLIS H THE IDENTITY OF THE PERSON, THE CAPACITY OF THE PERSON TO RENDER SERVIC ES AND THE GENUINENESS OF TRANSACTION. ASSESSING OFFICER NOTED THAT ASSESSEE HAD COMPLETED THE WORK OF DHOLERA ROAD ON 30.06.2001 AND ASSESSEE WAS NOT REQUIRED TO INCUR ANY EXPENDITURE AFTER THAT DATE IN RELATION TO THE AFOR ESAID WORK. ON PERUSING THE DETAILS SUBMITTED BY THE ASSESSEE, A.O. NOTICED THA T ASSESSEE HAD INCURRED EXPENDITURE AFTER 30.06.2001, THE DETAILS OF WHICH ARE LISTED AT PAGE 9 OF HIS ORDER. THE TOTAL OF SUCH EXPENSES AMOUNTED TO RS. 8 9,85,337/-. HE ACCORDINGLY DISALLOWED THE SAME. AGGRIEVED BY THE O RDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONS IDERING THE SUBMISSIONS OF ITA NO 96/AHD/2006 . A.Y. 2002-0 3 16 THE ASSESSEE AND THE REMAND REPORT FROM THE A.O. GR ANTED SUBSTANTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER:- 11.3 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE ROAD CONSTRUCTION WORK W AS CARRIED OUT AT THE SITE FOR WHICH THE FINAL BILL WAS RECEIVED ON 30.6. 2001 . AS PER PAGE 86 OF THE PAPER BOOK, THE AUTHORISED REPRESENTATIVE HAS WORKE D OUT DETAILS OF MAJOR ITEMS CONSUMED AT PIPLI SITE ON THE BASIS OF DIFFER ENCE IN QUANTITIES REPORTED IN FIRST R.A. BILL NO. 10 AND LAST R.A. BILL NO. 14 AND HAS ARRIVED AT QUANTITIES OF EARTHWORK , GSB, WBM, PRIME COAT, PCC, BM AND MSS . ACCORDING TO THE WORKING OF THE AUTHORISED REPRESENTATIVE GSB OF 224 61 MT HAVE BEEN USED , DIESEL OIL OF 100565 LITRES , AGGREGATE OF 24698 MT , MIX SEAL OF 92035 SQ.M HAVE BEEN CONSUMED IN THE WORK AT THIS SITE WHICH M ORE OR LESS TALLIED WITH PURCHASES OF MATERIALS . ON THE BASIS OF MEASUREMEN T OF WORK DONE, THE AUTHORISED REPRESENTATIVE HAS WORKED OUT THE ACTUAL LABOUR WORK DONE AND SHOWED THAT TO THE EXTENT CLAIMED THE LABOUR CONTRA CTORS HAVE BEEN ENGAGED AND THE MATERIALS WERE PURCHASED. THE AUTHORISED RE PRESENTATIVE HAS FILED LEDGER ACCOUNTS OF THE PARTIES AND BANK STATEMENTS OF THE APPELLANT AS PER PAGES 86 TO 155 OF THE PAPER BOOK . THE ACCOUNT COP Y OF N.K.PARMAR , WHICH IS THE FIRST ITEM OF RS.11,00,160/- OUT OF RS.89,85 ,337/- WRONGLY REPORTED AS N.K.PATEL BY THE ASSESSING OFFICER FOR LABOUR EXPEN SES HAS BEEN FILED AT PAGE 128 OF THE PAPER BOOK .FROM THE ACCOUNT COPY IT IS SEEN THAT THE SAID PARTY HAS BEEN PAID RS.9,50,000/- BY CHEQUE BY 26.6.01 AN D HAS BEEN PAID RS.3,00,000/- ON 23.8.2001 AND RS.5,00,000/- ON 25. 9.2001 AND HE HAS RAISED TWO BILLS, BILL DATED 30.6.2001 FOR RS.6,74, 183/- AND BILL DATED 30.9.2001 FOR RS.11,00,610/-, TOTAL OF RS.17,74,793 /- , COPIES OF BILLS RAISED BY HIM OF RS.6,74,183/-FOR PAVER AND BITUMINOUS MACADA M WORK FOR 15957 TONS AND OF RS.L 1,00,610/- FOR 91718 SQ.MT. OF MSS (MIX ED SEAL WORK ) @ RS.L27- PER SQ. MT. HAVE BEEN FILED AT PAGES 131, 133 OF IH E PAPER BOOK . IT IS FOUND THAT SOME BILLS HAVE BEEN RAISED BY THE PARTIES AFT ER THE WORK WAS OVER . THE BILLS FOR CARTING EXPENSES HAVE BEEN RAISED ON 30.6 . 2001 . FOR MOST OF THE PARTIES SUBSTANTIAL PAYMENTS HAVE BEEN MADE PRIOR T O 30.6. 2001 . FOR EXAMPLE BILL OF RS.12,88,000/- HAS BEEN RAISED BY B ARAD PRATAPSINH ON 30.6.2001 , BUT PAYMENT OF RS.7,50,000/- HAS BEEN M ADE BY CHEQUE TO HIM BY 25.6.2001 AND RS.5,00,000/- HAS BEEN PAID TO HIM ON 25.9.2001 AND AT THE YEAR END THE OUTSTANDING AMOUNT PAYABLE WAS ONLY OF RS.24,862/- AS CAN BE SEEN FROM PAGE 99 OF THE PAPER BOOK . IN RESPECT OF BARAD NAVALSINH BILL FOR CARTING OF AGGREGATE OF RS. 19.77,600/- HAS BEEN RAISED ON 30.6.2001 , BUT AS CAN BE SEEN FROM COPY OF ACCOUNT FILED AT PAGE 100 OF THE PAPER BOOK . PAYMENTS OF RS.7.50,000/- HAVE BEEN MADE TO HIM BY 25.6.2001 AND RS. 12.00.000/- HAS BEEN PAID BY 27.9.2001 AND THE BALA NCE AMOUNT OUTSTANDING AT THE YEAR END WAS ONLY OF RS.7,428/-. BILLS OF VA RIOUS PARTIES FOR CARTING EXPENSES HAVE BEEN FILED AT PAGES 106 TO 118 OF THE PAPER BOOK .FOR THE PARTIES WHO HAVE DONE THE CARTING WORK LIKE RAMSING H MANSINGH,KANUBHAI GANDABHAI PATEL, PRAVINSINH MADARSINH, TAPOVAN CONS TRUCTION ,JAGDISH FATEHSING ,BARAD PRATAPSINH , BARAD NAVALSINH, SAMJ I NANJI, SATYAM ITA NO 96/AHD/2006 . A.Y. 2002-0 3 17 CONSTRUCTION, THE ACCOUNT COPIES HAVE BEEN FILED AT PAGES 94 TO 102 OF THE PAPER BOOK FROM WHICH IT IS SEEN THAT THEY HAVE RAI SED BILLS BEFORE 30.6.2001 AND SUBSTANTIAL AMOUNTS HAVE BEEN PAID TO THEM DURI NG THE YEAR ITSELF. SIMILARLY SUBSTANTIAL PAYMENTS HAVE BEEN MADE TO SI DDHI CONSTRUCTION , CHAMUNDA QUARRY , RAMANLAL BROTHERS DURING THE YEAR ITSELF AS PER THE ACCOUNT COPIES FILED AT PAGES 103 TO 105 OF THE PAP ER BOOK .AS REGARDS PURCHASE OF AGGREGATE FROM SHREE JADAV QUARRY , THE COPY OF ACCOUNT AND COPY OF BILL RAISED BY THE PARTY HAVE BEEN FILED AT PAGES 119 TO 121 OF THE PAPER BOOK . THE AGGREGATE OF 5060 BRASS EQUIVALENT TO 20240 MT HAVE BEEN PURCHASED FROM THIS PARTY AND THE AUTHORISED REPRES ENTATIVE HAS WORKED OUT THE QUANTITY OF AGGREGATE CONSUMED AT THE SITE AS 2 4698 MT ON THE BASIS OF FIGURES REPORTED IN R.A. BILLS . HENCE THE PURCHASE OF AGGREGATE OF 20240 MT FORM THIS PARTY HAS BEEN JUSTIFIED BY THE AUTHORISE D REPRESENTATIVE .THE COPIES OF BILLS OF MANUBHAI BODHABHAI ,CHETAN PARMA R HAVE BEEN FILED BY THE AUTHORISED REPRESENTATIVE AT PAGES 124 TO 126 AND 132 OF THE PAPER BOOK . THE GP IN RESPECT OF THIS PIPLI SITE IS OF RS.67.44 LAKHS WHICH WORKS OUT TO 23.11 % ON CONTRACT RECEIPTS OF RS.2.91 CRORES . TH EREFORE, IF THE ADDITION OF RS.89,85,337/- MADE BY THE ASSESSING OFFICER IS TAK EN INTO ACCOUNT THE G. P. WOULD COME TO RS. 1.57 CRORES ON RECEIPTS OF RS. 2. 91 CRORES WHICH WOULD WORK OUT TO G.P. OF 54% WHICH WOULD BE AN ABSURD RE SULT. COPIES OF BANK STATEMENTS HAVE BEEN FILED TO SHOW THAT THE PAYMENT S HAVE BEEN MADE TO THE PARTIES .PAYMENTS TO N.K.PARMAR AND CHETAN SARDARSI NH HAVE BEEN MADE FULLY BY CHEQUES DURING THE YEAR EXCEPT AN AMOUNT O F RS. 1,890/- FOR N.K.PARMAR AS PER PAGES 128 TO 130 OF THE PAPER BOO K . SIMILARLY PAYMENTS TO MANUBHAI GODHABHAI HAVE BEEN MADE BY CHEQUES EXC EPT RS. 10,000/- WHICH HAS NOT BEEN PAID TILL 31.3.2004 , HENCE RS. 10,000/- IS DISALLOWED. PAYMENTS TO SHREE JADAV QUARRY HAVE BEEN MADE BY CH EQUES EXCEPT RS. 1,00,000/- IN CASH PAID IN SUBSEQUENT YEAR ,HENCE R S. 1,00,000/- IS DISALLOWED. PAYMENTS TO RAMSING MANSING, KANUBHAI G ANDABHAI, PRAVINSINH MADARSINH, TAPOVAN CONSTRUCTION, JAGDISH FATEHSING, BARAD PRATAPSINH, BARAD NAVALSINH ,SAMJIBHAI NANJIBHAI ,S ATYAM CONSTRUCTION , CHAMUNDA QUARRY AND RAMANLAL BROTHERS HAVE BEEN MAD E BY CHEQUES AS CAN BE SEEN FROM COPIES OF ACCOUNTS FILED BY THE AU THORISED REPRESENTATIVE AT PAGES 94 TO 105 OF THE PAPER BOOK. IN VIEW OF SU BSTANTIAL G.P. SHOWN IN RESPECT OF THIS SITE, SUBSTANTIAL PAYMENTS HAVING B EEN MADE TO THE PARTIES AND THE JUSTIFICATION SUBMITTED BY THE AUTHORISED R EPRESENTATIVE FOR MAKING PURCHASES AND INCURRING EXPENSES, I DO NOT FIND ANY JUSTIFICATION FOR THE DISALLOWANCE OF THE ENTIRE AMOUNT OF RS. 89,85,337/ - EXCEPT THE AMOUNT OF RS. 1,10,000/- BEING CASH PAYMENT AS ABOVE. ACCORDI NGLY THE DISALLOWANCE OF RS. 88,75,337/- IS DELETED AND DISALLOWANCE OF RS. 1,10,000/- IS SUSTAINED. 32. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 18 33. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. THE LD. A.R. ON THE OTHER HAND SUBMITTED THAT FOR MOST OF THE EXPENSES INCURR ED PRIOR TO 30.06.2001, THE BILLS WERE RAISED BY THE SUPPLIER /CONTRACTOR A FTER 30.06.2001. HE FURTHER SUBMITTED THAT THE EXPENSES WERE INCURRED FOR THE E XECUTION OF WORK AND FURTHER SUBMITTED THAT THE INCOME FROM THE AFORESAI D WORK HAS BEEN OFFERED FOR TAX AND HAS ALSO BEEN ASSESSED. HE THUS SUPPOR TED THE ORDER OF CIT(A). 34. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS HAS NOTED THAT SOME OF THE PARTIES HAVE RAISED THE BILL AFTER 30.06.2001 BUT MOST OF T HE PAYMENTS HAVE BEEN MADE PRIOR TO 30.06.2001. HE FURTHER NOTED THAT THE G.P. IN RESPECT OF PIPLI SITE WORKED OUT TO 23.11% OF THE CONTRACT RECEIPTS AND IF THAT ADDITION OF RS. 89,95,337/- MADE BY THE ASSESSING OFFICER IS TAKEN INTO ACCOUNT THE GP WOULD WORK OUT TO AN ABSURD FIGURE OF 54%. CIT(A) A FTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE RESTRICTED THE DIS ALLOWANCE ONLY TO THE EXTENT OF RS. 1,10,000/-. BEFORE US, THE REVENUE CO ULD NOT CONTROVERT THE FINDINGS OF CIT(A) NOR COULD BRING ANY CONTRARY MAT ERIAL ON RECORD. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 9 IS WITH RESPECT TO DISALLOWANCE OF PAY MENT OF RS. 1,57,362/-. 35. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A. O NOTICED THAT ASSESSEE HAS DEBITED EXPENSES AGGREGATING TO RS. 1,57,362/- IN THE NAME OF ADVANCE PETRO CORPORATION. SINCE THE ASSESSEE COULD NOT PRO DUCE THE BILLS. THE A.O DID NOT ALLOW THE EXPENSES AND DISALLOWED THE SAME. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPO RT FROM A.O. DELETED THE ADDITION. 36. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 19 37. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND THE LD. A.R. SUBMITTED THAT AFTER CONSIDERING THE COPIES OF BILLS SUBMITTED BY THE ASSESSEE AND THE REMAND REPORT FROM A.O. CIT(A) HAS HELD THAT THE EXPENSES WAS INCURRED FOR THE PURPOSE OF BUSINESS A ND THUS DELETED THE ADDITION. HE THUS SUPPORTED THE ORDER OF CIT(A). 38. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FI NDINGS OF CIT(A) BY BRINGING ANY CONTRARY MATERIAL ON RECORD. WE THEREFORE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A). THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 10 IS WITH RESPECT TO DISALLOWANCE OF RS . 2,10,000/- FOR ASPHALT AND CARTING EXPENSES. 39. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AS SESSING OFFICER WAS ASKED TO PRODUCE THE BILLS FOR ASPHALT CARTING. SINCE TH E ASSESSEE COULD NOT PRODUCE THE BILLS, ASSESSING OFFICER DISALLOWED RS. 2,10,00 0/-. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITIO N BY HOLDING AS UNDER:- 13.3 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE AUTHORISED REPRESENTATIV E HAS FILED COPIES OF ACCOUNTS OF M/S RAJSHREE ROADLINES AND ALPESH GOSAL IA AT PAGES 165 AND 166 OF THE PAPER BOOK . THE AFFIDAVIT OF ALPESH AND COPY OF BILL RAISED BY ALPESH HAVE BEEN FILED AS PER PAGE 167 OF THE PAPER BOOK. IT IS ALSO FOUND THAT CARTING EXPENSES FOR ASPHALT HAVE BEEN PAID IN FULL TO RAJSHREE ROADLINES DURING THE YEAR BY CHEQUE AND TDS HAS BEEN MADE .IN VIEW OF THE ABOVE FACTS , PAYMENTS HAVING BEEN MADE TO RAJSHREE ROADL INES AND THE AFFIDAVIT FROM ALPESH , I DO NOT FIND ANY JUSTIFICATION FOR A NY DISALLOWANCE , ACCORDINGLY THE DISALLOWANCE OF RS.2,10.000/- IS DELETED. 40. BEFORE US, LEARNED D.R. RELIED ON THE ORDER OF A.O. ON OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). ITA NO 96/AHD/2006 . A.Y. 2002-0 3 20 41. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE ADDITION HAS NO TED THAT THE CARTING EXPENSES WERE PAID BY CHEQUE AND TDS WAS ALSO DEDUC TED. HE THEREFORE HELD THAT THERE WAS NO JUSTIFICATION FOR ANY DISALL OWANCE. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FINDINGS OF CIT(A) AN D THEREFORE WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND TH US THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 11 IS WITH RESPECT TO DISALLOWANCE OF 32 ,900/- FOR BROKERAGE. 42. A.O. NOTICED THAT ASSESSEE HAD DEBITED 32,900/- AS BROKERAGE EXPENSES. THE ASSESSEE WAS ASKED TO JUSTIFY THE EXPENSES WITH REFERENCE TO THE BUSINESS ACTIVITY AND ALSO PRODUCE NECESSARY EVIDEN CE. IN THE ABSENCE OF EVIDENCE OF PAYMENT, A.O DISALLOWED THE SAME. AGGRI EVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT (A) DELETED THE ADDITION BY HOLDING AS UNDER:- 14. 2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE AUTHORISED REPRESENTATIV E HAS FILED COPY OF ACCOUNT OF THE BROKER AND COPIES OF VOUCHERS SHOWIN G PAYMENT TO HIM AS PER PAGES 172 TO 182 OF THE PAPER BOOK .THE BROKERAGE H AS BEEN PAID FOR TAKING LAND FOR CAMP SITE ON RENT . IN VIEW OF THE ABOVE F ACTS , PAYMENTS HAVING BEEN MADE TO THE PARTY, I DO NOT FIND ANY JUSTIFICATION FOR ANY DISALLOWANCE, ACCORDINGLY THE DISALLOWANCE OF RS.32,900/- IS DELETED . 43. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 44. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE ADDITION HAS NO TED THAT THE BROKERAGE WAS PAID FOR TAKING LAND FOR CAMP SITE ON RENT. HE ALS O NOTED THAT THE PAYMENT HAS BEEN MADE TO THE PARTY AND THUS THERE WAS NO REASON FOR DISALLOWANCE. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FI NDINGS OF CIT(A) AND ITA NO 96/AHD/2006 . A.Y. 2002-0 3 21 THEREFORE WE FIND NO REASON TO INTERFERE WITH THE O RDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 12 IS WITH RESPECT TO DISALLOWANCE OF LE GAL EXPENSES OF RS. 15,000/-. 45. A.O NOTICED THAT ASSESSEE HAS INCURRED RS. 3,01 ,860/- AS LEGAL EXPENSES. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF TH E SAME. SINCE THE ASSESSEE COULD NOT FURNISH THE PROOF OF PAYMENT OF RS. 35,000/- PAID TO ADVOCATES NOR COULD FILE CONFIRMATION LETTER, A.O. DISALLOWED THE PAYMENT OF RS. 35,000/-. AGGRIEVED BY THE ORDER OF A.O, ASSESS EE CARRIED THE MATTER BEFORE CIT(A). CIT(A) GRANTED PARTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER:- 16.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE AUTHORISED REPRESENTATIV E HAS FILED COPY OF RECEIPT ISSUED BY PRAVIN PATEL FOR PAYMENT OF RS.15,000/- O N 6.12.2001 AT PAGE 187 OF THE PAPER BOOK AND COPY OF SELF MADE VOUCHER FOR PAYMENT TO VIJAY PATEL AT PAGE 188 OF THE PAPER BOOK . HOWEVER THE AUTHORISED REPRESENTATIVE HAS NOT SUBMITTED PAN AND CONFIRMATION FROM ADVOCATE VIJAY PATEL , IT IS FOUND THAT CASH OF RS.20,000/- HAS BEEN PAID TO HIM ON SELF MA DE VOUCHER AND NO RECEIPT HAS BEEN FURNISHED. THEREFORE, DISALLOWANCE OF PAYMENT OF RS. 20,000/- MADE TO VIJAY PATEL IS CONFIRMED AND THE D ISALLOWANCE OF RS.15,000/- IS DELETED . THEREFORE, THE APPELLANT GETS PART REL IEF OF RS.15,000/-. 46. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. ON OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 47. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) HAS NOTED THAT ASSESSEE HAD PRODUC ED COPIES OF RECEIPT FOR PAYMENT OF RS. 15,000/- PAID TO MR. PRAVEEN PATEL S INCE THE ASSESSEE COULD NOT PRODUCE THE DETAILS LIKE PAN NUMBERS AND CONFIR MATION PAID TO ADVOCATE VIJAY PATEL AMOUNT TO RS. 20,000/- IN CASH, HE DISA LLOWED THE SAME. BEFORE US THE REVENUE COULD NOT CONTROVERT THE FINDINGS OF CI T(A) AND THEREFORE WE FIND ITA NO 96/AHD/2006 . A.Y. 2002-0 3 22 NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 13 IS WITH RESPECT TO DISALLOWANCE OF RS . 49,600/- PAYMENT OF MACHINERY EXPENSES. 48. A.O. NOTICED THAT ASSESSEE HAS DEBITED RS. 10,4 9,733/- TOWARDS MACHINE REPARING EXPENSES. THE ASSESSEE WAS ASKED TO PRODUC E AND JUSTIFY THE EXPENSES SINCE THE ASSESSEE COULD NOT PRODUCE ANY E VIDENCE IN SUPPORT OF THE CASH PAYMENT FOR RS. 62,000/- PAID FOR SPARE PA RTS, A.O. DISALLOWED THE SAME. AGGRIEVED BY THE ORDER OF A.O. ASSESSEE CARRI ED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE GRANTED PARTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: - 17.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATI VE HAVE BEEN CONSIDERED CAREFULLY. THE AUTHORISED REPRESENTATIV E HAS FURNISHED COPIES OF BILLS AT PAGES 189, 190 OF THE PAPER BOOK , HOWEVER AS CASH PAYMENTS HAVE BEEN MADE, THE DISALLOWANCE OF 20% OF RS. 62,000/- I.E. RS. 12,400/- IS SUSTAINED AS DISALLOWANCE U/S. 40A(3) OF THE I.T. ACT. THE APPELLANT GETS PART RELIEF OF RS. 49,600/ - IN THIS GROUND. 49. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US THE LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 50. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) AFTER CONSIDERING THE MATERIAL SUB MISSIONS OF THE ASSESSEE GRANTED PARTIAL RELIEF TO THE ASSESSEE. BEFORE US T HE LD. D.R. COULD NOT CONTROVERT THE FINDINGS OF CIT(A) AND THEREFORE WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF RE VENUE IS DISMISSED. GROUND NO. 14 IS WITH RESPECT TO DISALLOWANCE OF OI L EXPENSES. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 23 51. A.O. NOTICED THAT ASSESSEE HAS INCURRED OIL EXP ENSES OF RS. 1,02,965/. SINCE THE ASSESSEE COULD NOT PRODUCE THE VOUCHERS OR ANY SUPPORTING FOR THE PAYMENTS, A.O. DISALLOWED THE ENTIRE EXPENSES. AGGR IEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT (A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE GRANTED SUBSTANTIAL REL IEF TO THE ASSESSEE BY HOLDING AS UNDER:- 18.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDEREDCAREFULLY. THE AUTHORISED REPRESENTATIVE HAS FURNISHED COPY OF ACCOUNT OF OIL EXPENSES AT PAGE 191 OF THE PAPER BO OK AND COPIES OF BILLS FOR OIL PURCHASE AT PAGES 194 TO 206 OF THE PAPER BOOK . IT IS FOUND FROM THE SAID DETAILS THAT PURCHASE FROM CASTROL INDIA LTD. WAS O F RS.89,534/- AND PAYMENT HAS BEEN MADE TO THE SAID PARTY BY CHEQUE . THE OTH ER PURCHASES ARE OF LUBRICANTS, TRANSMISSION OIL ETC. FROM OTHER PARTIE S FOR WHICH COPIES OF BILLS HAVE BEEN FURNISHED , BUT PAYMENTS HAVE BEEN MADE I N CASH TO THESE PARTIES IN ABSENCE OF PROPER VERIFICATION DISALLOWANCE OF CASH PAYMENTS IS CONFIRMED I.E. DISALLOWANCE OF RS. 13,000/- IS SUSTAINED OUT OF DISALLOWANCE OF RS. 1,02,965/-. 52. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE IS NOW IN APPEAL BEFORE US. BEFORE US THE LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 53. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS NOTED THAT THE PAYMENTS WERE MADE TO THE PARTY BY CHEQUE FOR PURCHASE OF LUBRICANTS, TRANSMISSION OIL ETC. WHERE THE PAYMENT S OF RS. 13,000 WHICH WERE MADE IN CASH HE HAS DISALLOWED THE SAME. BEFOR E US THE REVENUE COULD NOT CONTROVERT THE FINDINGS OF CIT(A) AND THEREFORE WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GR OUND OF REVENUE IS DISMISSED. GROUND NO. 15 ON ACCOUNT OF DISALLOWANCE OF PIPE CA RTING AND PIPE PURCHASE EXPENSE AMOUNTING TO RS. 1,48,400/-. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 24 54. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AS SESSEE WAS ASKED TO MATCH PIPE CARTING AND PIPE PURCHASE EXPENSES AND JUSTIFY THE EXPENSES BY SHOWING THE INCOME IN RESPECTIVE BILLS. SINCE THE A SSESSEE COULD NOT JUSTIFY OR SUBMIT THE DETAILS AS REQUIRED BY THE A.O., A.O. DI SALLOWED RS. 1,48,400/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED TH E MATTER BEFORE CIT(A), CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE AND THE REMAND REPORT DELETED THE ADDITION BY HOLDING AS UNDER: 19.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHORISE D REPRESENTATIVE CAREFULLY AND HAVE ALSO GONE THROUGH THE DETAILS FILED BY THE AUTHORISED REPRESENTATIVE. I HAVE ALSO CONSIDERED THE OBSERVAT IONS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND THE REMAND REPORT THE AUTHORISED REPRESENTATIVE HAS FURNISHED A WO RKING FOR MAJOR ITEMS CONSUMED ON THE BASIS OF R.A. BILL AT PAGE 168 OF T HE PAPER BOOK . AS PER THE SAID WORKING PIPES OF 273.634 CUM HAVE BEEN CONSUME D , FOR WHICH THE APPELLANT HAS PURCHASED 328.325 CUBIC METRES OF PI PES FROM LAKSHMI ENTERPRISE, GANESH CEMENT PIPE AND HAMSA INT ERNATIONAL . DETAILS OF PIPE CARTING HAVE BEEN FILED HILL WISE AT PAGE 170 OF THE PAPER BOOK .CONSUMPTION OF PIPES HAS BEEN TALLIED. THE AUTHO RISED REPRESENTATIVE HAS JUSTIFIED THE EXPENSES. THEREFORE, THE DISALLOWANCE OF RS. 1,48,400/- MADE BY THE ASSESSING OFFICER IS HELD TO BE NOT JUSTIFIED A ND THE SAME IS DELETED. 55. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 56. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT FROM THE A.O. HAS NOTED THAT THE CONS UMPTION OF PIPES HAVE BEEN TALLIED AND THE DETAILS OF PIPE CARTING EXPENS ES WERE FILED BILL WISE. BEFORE US, THE REVENUE COULD NOT CONTROVERT THE FIN DINGS OF CIT(A) AND THEREFORE WE FIND NO REASON TO INTERFERE WITH THE O RDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 16 IS WITH RESPECT TO DISALLOWANCE OF PR OFESSIONAL FEES AMOUNTING TO RS. 46,000/-. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 25 57. A.O. NOTICED THAT ASSESSEE HAD DEBITED RS. 91,7 50/- AS PROFESSIONAL FEES BEING AMOUNT PAID TO VARIOUS PARTIES. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS ALONG WITH THE COPY OF THE ACCOUNTS. SINCE THE ASSESSEE COULD NOT FURNISH THE FULL DETAILS, A.O. DISALLOWED RS. 91,75 0/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE GRANTED PARTIA L RELIEF TO THE ASSESSEE BY HOLDING AS UNDER:- 20.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE PAYMENTS HAVE BEEN MADE TO T.D. PATEL WHO IS AN ENGINEER FOR VALUATION OF PLANT AND MACHINERY AND V ALUATION REPORT FOR AGRICULTURAL AND NON AGRICULTURAL LAND . BILLS RAIS ED BY HIM HAVE BEEN FILED AT PAGES 217 TO 218 OF THE PAPER BOOK . THE CONSULTATI ON FEES REPORTED BY THE ASSESSING OFFICER OF RS. 30,750/-ARE ACTUALLY RS. 1 5,750/- WHICH ARE DOCUMENTATION CHARGES AND CONSULTATION FEES FOR WHI CH NO DETAILS HAVE BEEN FILED . THE PAYMENTS HAVE BEEN MADE TO JOSEPH & CO. FOR ELECTRICITY CONNECTION IN TAMILNADU AND FOR OBTAINING CLEARANCE FOR TWO PLOTS ETC. AND THE PAYMENTS HAVE BEEN MADE IN CASH AND THE AUTHORISED REPRESENTATIVE HAS FURNISHED ONLY SELF MADE VOUCHERS. THEREFORE, THE GENUINENESS OF PAYMENTS MADE TO JOSEPH AND CO. OF RS. 30,000/- AND MISCELLA NEOUS FEES OF RS. 15,750/- IS NOT PROVED, THEREFORE, THE DISALLOWANCE OF RS. 45,750/-. THUS RELIEF ALLOWED IS OF RS. 46,000/- 58. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 59. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE CIT(A) DELETED THE ADDITION TO THE EXTENT THE ASSESSEE COU LD NOT FURNISH THE DETAILS. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FI NDINGS OF THE CIT(A), AND THEREFORE WE FIND NO REASON TO INTERFERE WITH THE O RDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 17 IS WITH RESPECT TO ADDITION OF RS. 1, 25,600/- ON ACCOUNT OF PAYMENT OF RENT EXPENSES. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 26 60. A.O NOTICED THAT ASSESSEE HAD MADE PAYMENT OF R ENT AMOUNTING TO RS. 1,25,600/- AND THE SAME WAS DISALLOWED BY THE A.O. ON ACCOUNT OF FAILURE ON THE PART OF ASSESSEE TO ADDUCE NECESSARY EVIDENCE T O ESTABLISH THE GENUINENESS OF TRANSACTION. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 21. 2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE DETAILS HAVE BEEN FILED AS PER PAGES 219 TO 238 OF THE PAPER BOOK. THE COPIES OF LEASE AGREEMENT HAVE BEEN FILED AT THE TIME OF APPEAL HEARING WHICH COULD NOT BE FILED BY THE APPE LLANT AT THE LIME OF ASSESSMENT PROCEEDINGS DUE TO SHORT TIME AVAILABLE. LEASE AGREEMENT HAS BEEN MADE WITH A. LAWRENCE FOR RENT OF HOUSE IN TAM ILNADU @ RS.3,500/- P.M. AND AGREEMENT HAS BEEN MADE WITH ARIFA BEGUM A ND OTHERS @ RS. 15,000/- P.M. FOR LAND OF 9.73 ACRES IN THIRUVALLUR DISTRICT IN TAMILNADU FOR CONSTRUCTION OF OFFICE BUILDING AND TO OPERATE A HO T MIX PLANT . IN VIEW OF THE ABOVE FACTS , PAYMENTS HAVING BEEN MADE TO THE PART IES AS PER LEASE AGREEMENTS , I DO NOT FIND ANY JUSTIFICATION FOR AN Y DISALLOWANCE , ACCORDINGLY THE DISALLOWANCE OF RENT OF RS. 1.25.600/- IS DELETED . 61. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 62. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) AFTER PERUSING THE COPIES OF LEASE AGREEMENTS FILED BY THE ASSESSEE HAS GIVEN A FINDING THAT THE PAYMENTS WERE MADE TO THE PARTIES AS PER THE LEASE AGREEMENTS AND WAS USED FOR CONSTRUCT ION OF OFFICE BUILDING AND TO OPERATE A HOT MIX PLANT FOR BUSINESS AND THEREFO RE THERE WAS NO JUSTIFICATION FOR DISALLOWANCE. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FINDINGS OF THE CIT(A), AND THEREFORE WE FIND NO REASON TO INTE RFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 18 IS WITH RESPECT TO DISALLOWANCE OF SA ND CARTING EXPENSES AND SAND PURCHASE EXPENSES AMOUNTING TO RS. 96,620/-. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 27 63. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE WAS ASKED TO MATCH SAND CARTING AND SAND PURCHASE EXPENSES AND J USTIFY THE EXPENDITURE WITH REFERENCE TO THE CAPACITY OF THE PERSONS WHO H AD CLAIMED TO HAVE RENDERED SUCH SERVICES. IN THE ABSENCE OF DETAILS B Y THE ASSESSEE, ASSESSING OFFICER DISALLOWED SAND PURCHASE EXPENSES OF RS. 55 ,532/- AND SAND CARTING EXPENSES OF RS. 41,088/-, THE AGGREGATE DISALLOWANC E BEING RS. 96,620/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED TH E MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 23.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE AUTHORISED REPRESENTATIV E HAS FILED ACCOUNT COPY OF SAND PURCHASE AND CARTING AT PAGE 244 OF THE PAP ER BOOK ,AS PER THE WORKING OF MATERIALS CONSUMED SUBMITTED BY THE AUTH ORISED REPRESENTATIVE AT PAGE 169 OF THE PAPER BOOK SAND OF 471.24 MT WAS PURCHASED AND 340.407 MT WAS CONSUMED THE PAYMENTS HAVE BEEN MADE TO THE PARTY BY CHEQUES AND THE OUTSTANDING AMOUNT AT THE YEAR END IS ONLY OF RS.20,734/- .THE DETAILS OF CARTING OF SAND MADE BY THE PARTY H AVE BEEN FURNISHED VEHICLE WISE AT PAGES 249 TO 251 OF THE PAPER BOOK . IN VIE W OF THE ABOVE FACTS , PAYMENTS HAVING BEEN MADE TO THE PARTY AND CONSIDER ING THE REQUIREMENT OF SAND JUSTIFIED BY THE AUTHORISED REPRESENTATIVE , I DO NOT FIND ANY JUSTIFICATION FOR ANY DISALLOWANCE , ACCORDINGLY THE DISALLOWANCE OF RS.96.620/- IS DELETED . 64. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 65. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. CIT(A) WHILE DELETING THE ADDITION HAS NOTED THAT A SSESSEE HAD SUBMITTED DETAILS AND WORKING OF THE MATERIAL CONSUMED. ASSES SEE HAD ALSO FILED PROCESSING VEHICLE WISE DETAILS. HE HAS FURTHER NOT ED THAT THE PAYMENTS HAVE BEEN MADE BY CHEQUES AND FURTHER HELD THE REQUIREME NT OF SAND TO BE JUSTIFIED. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FI NDINGS OF THE CIT(A), AND THEREFORE WE FIND NO REASON TO INTERFER E WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 28 GROUND NO. 19 IS WITH RESPECT TO DISALLOWANCE OF SI TE CAMP EXPENSES AMOUNTING TO RS. 2,06,218/-. 66. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A. O. NOTICED THAT ASSESSEE HAS INCURRED SITE CAMP EXPENSES. THE ASSESSEE WAS A SKED TO PRODUCE THE VOUCHERS WITH RESPECT TO PAYMENTS MADE TO RADHA ELE CTRICALS, A. KRISHNANAN, AND SELVAM. IN THE ABSENCE OF DETAILS SUBMITTED BY THE ASSESSEE, ASSESSING OFFICER DISALLOWED THE AGGREGATE PAYMENT OF RS. 2,4 6,018/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE C IT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER:- 24.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTAT IVE HAVE BEEN CONSIDERED CAREFULLY . THE AUTHORISED REPRESENTATIV E HAS FURNISHED DETAILS AS PER PAGES 255 TO 276 OF THE PAPER BOOK . COPY OF BI LL RAISED BY SELVAM FOR RS.55,000/- HAS BEEN FILED AT PAGE 275 AND COPY OF BILL RAISED BY A. KRISHNAN FOR RS.L,66183/- HAS BEEN FILED AT PAGES 262 TO 264 OF THE PAPER BOOK . COPY OF ACCOUNT OF RAJ ELECTRIC HAS BEEN FILED AT PAGES 269,270 OF THE PAPER BOOK . PAYMENTS TO RAJ ELECTRIC HAVE BEEN MADE BY CHEQUES AND THE OUTSTANDING AMOUNT AT THE YEAR END IS ONLY RS. 1,064/- .AS PER THE LEDGER ACCOUNT OF SITE CAMP EXPENSES AS PER PAGES 255 TO 258 OF THE PAPER BOOK , THE TOTAL EXPENSES ARE OF RS. 15,93,688/- OUT OF WHICH AN AMO UNT OF RS. 11,95,238/- HAS BEEN SHOWN AS PREPAID EXPENSES , AS THE PROJECT WAS FOR 24 MONTHS EXPENDITURE FOR 6 MONTHS OF RS.3,98,450/- HAVE BEEN CLAIMED IN THIS YEAR AND THE BALANCE HAS BEEN SHOWN AS PREPAID . CONSIDERING THE FACT THAT FULL AND COMPLETE VOUCHERS HAVE NOT BEEN FURNISHED BY THE AP PELLANT , DISALLOWANCE OF 10% OF SITE EXPENSES I.E. 10% OF RS.3,98,450/- I.E. RS. 39,800 /- IS SUSTAINED OUT OF THE DISALLOWANCE OF RS.2,46,018/-AND THE BAL ANCE AMOUNT OF RS.2,06,218/- IS DELETED 67. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 68. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND PERUSING THE COPIES OF THE BILLS, ACCOUNTS, LEDGER EXPENSES ETC. GRANTED ITA NO 96/AHD/2006 . A.Y. 2002-0 3 29 SUBSTANTIAL RELIEF TO THE ASSESSEE. FURTHER IN THE ABSENCE OF COMPLETE VOUCHERS, HE RESTRICTED THE DISALLOWANCE TO 10% OF THE SITE EXPENSES. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FINDINGS OF THE CIT(A), AND THEREFORE WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CI T(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 20 IS WITH RESPECT TO DISALLOWANCE OF SI TE EXPENSES AMOUNTING TO RS. 10,000/-. 69. A.O. NOTICED THAT ASSESSEE HAD PAID RS. 10,000/ - TO MAA DURGA CHARITABLE TRUST AND THE SAME WAS CLAIMED AS AN EXPENDITURE. T HE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O , SO AS TO QUALIFY FOR DEDUCTION AND HENCE DISALLOWED THE EXPENDITURE. AGG RIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CI T(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE EXPENDITURE BY HOLDING AS UNDER:- 25.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . IT IS FOUND FROM THE RECEIPT ISSUED BY MAHAMAYA MANDIR SABHA , COPY OF WHICH HAS BEEN FILED AT PAGE 277 OF THE PAPER BOOK , THAT THE SAME HAS BEEN PAID BY THE APPELLANT FOR ADVERTISEMENT IN SOUVENIR . THIS BEING AN ALLOWABLE EXPENDITURE , THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE SAME . 70. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 71. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE ADDITION HAS NO TED THAT THE AMOUNT WAS PAID AS ADVERTISEMENT IN SOUVENIR AND FOR WHICH THE RECEIPT WAS ISSUED BY MAHAMAYA MANDIR SABHA. HE ACCORDINGLY HELD THE EXPE NDITURE TO BE ALLOWABLE EXPENDITURE. BEFORE US, THE LD. D.R. COUL D NOT CONTROVERT THE FINDINGS OF THE CIT(A), AND THEREFORE WE FIND NO RE ASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 30 GROUND NO. 21 TO 24 ARE WITH RESPECT TO DISALLOWAN CE OF 20% OF EXPENDITURE OF VARIOUS EXPENSES OF RADHANPUR SITE. 72. SINCE THE A.O. HAS DISALLOWED THE EXPENSES FOR IDENTICAL REASON, ALL THE FIVE GROUNDS ARE CONSIDERED TOGETHER. 73. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AS SESSING OFFICER NOTICED THAT ASSESSEE HAD INCURRED DIESEL EXPENSES OF RS. 32,63, 277/-. THE ASSESSEE WAS ASKED TO JUSTIFY THE EXPENSES WITH RESPECT TO T HE WORK DONE AND VEHICLES DEPLOYED. THE A.O. ALSO NOTICED THAT ASSESSEE HAD C LAIMED PURCHASES AND CARTING EXPENSES OF ASPHALT AGGREGATING TO RS. 2,13 ,84,850. HE FURTHER NOTICED THAT ASSESSEE HAD ALSO CLAIMED MACHINE HIRE CHARGES WITH RESPECT TO DUMPER HIRING AND JCB HIRING THE AMOUNT OF HIRING C HARGES BEING RS. 8,41,000/-. HE FURTHER NOTICED THAT ASSESSEE HAD AL SO CLAIMED OTHER MANUFACTURING EXPENSES AGGREGATING TO RS. 95,98,068 /- COMPRISING OF LDO EXPENSES, MACHINERY REPAIR, OIL EXPENSES, SUB-CONTR ACT EXPENSES AND WATER CHARGES EXPENSES. THE ASSESSEE WAS ASKED TO JUSTIFY THE EXPENSES. IN THE ABSENCE OF JUSTIFICATION TO THE SATISFACTION OF THE A.O, ASSESSING OFFICER DISALLOWED THE 20% OF EACH OF THESE EXPENSES AND AD DED TO THE INCOME. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) DELETED THE ADDITION BY HOLDING AS UNDER:- 26.3 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATI VE HAVE BEEN CONSIDERED CAREFULLY . THE AUTHORISED REPRESENTATIV E HAS WORKED OUT DETAILS OF MAJOR ITEMS CONSUMED AT RADHANPUR SITE O N THE BASIS OF FINAL R. A BILL AS SUBMITTED IN PAGES 279 TO 285 OF THE P APER BOOK. THE AUTHORISED REPRESENTATIVE HAS SUBMITTED THE PARTY W ISE DETAILS OF PURCHASE OF AGGREGATE .CEMENT, PARTY WISE PAYMENTS OF AGGREGATE CARTING , ASPHALT CARTING .GRAVEL CARTING AND LDO P URCHASE AND DIESCL PURCHASE IN THESE PAGES . THE AUTHORISED REPRESENTA TIVE HAS JUSTIFIED MACHINERY REQUIREMENT AT RADHANPUR SITE FOR PAYMENT OF MACHINERY HIRE CHARGES AS PER PAGES 286 AND 287 OF THE PAPER BOOK . THE MACHINERY HIRE CHARGES HAVE BEEN PAID TO M/S. SHREE VIJAY CONSTRUCTION WHOSE PAN AND COPY OF RETURN OF INCOME FILED HAVE BEEN FILED AT PAGE 60 OF THE PAPER BOOK .THE PARTIES TO WHOM MACHINERY HIRE ITA NO 96/AHD/2006 . A.Y. 2002-0 3 31 CHARGES HAVE BEEN PAID ARE THE SAME PARTIES WHO WER E PAID FOR BACHHAU SITE AS DISCUSSED IN EARLIER PARA. THE AUTH ORISED REPRESENTATIVE HAS FILED DETAILS OF SUBCONTRACT EXP ENSES AT PAGES 288, 289 OF THE PAPER BOOK . DETAILS OF OIL EXPENSES WITH COPIES OF BILLS AT PAGES 290 TO 320 OF THE PAPER BOOK, DETAILS OF WATE R TANKER CHARGES ALONG WITH COPIES OF BILLS AT PAGES. 321 TO 329 AND DETAILS OF MACHINERY REPAIRS AS PER PAGES 329 OF THE PAPER BOOK . IT IS ALSO FOUND THAT G.P. IN RESPECT OF THIS SITE IS OF RS. 1,35,63,916/- ON TOT AL CONTRACT RECEIPT OF RS.6,16,14,527/- WHICH WORKS OUT TO G.P. OF 22% . I F THE DISALLOWANCE OF RS.71,29,438/- IS TAKEN INTO ACCOUNT THE G.P. WOULD WORKOUT TO RS.2,06,93,354/-WHICH WORK OUT TO G.P. OF 33.58% WH ICH WOULD BE AN ABSURD RESULT . IN VIEW OF THE ABOVE FACTS , PAYMEN TS HAVING BEEN MADE TO THE PARTIES AND G.P. SHOWN BEING REASONABLE , I DO NOT FIND ANY JUSTIFICATION FOR ANY DISALLOWANCE , ACCORDINGLY TH E DISALLOWANCE OF RS.6,52.655/-IS DELETED . 27.2 FOR THE REASONS DISCUSSED IN PARA 26.3 DISALLO WANCE OF RS.42,76,970/- IS HELD TO BE NOT JUSTIFIED , HOWEVER CONSIDERING THE FACT THAT THE APPELLANT HAS NOT PRODUCED ALL THE BI LLS FOR PURCHASE OF MATERIALS AND BILLS FOR CARTING EXPENSES , I SUSTAI N DISALLOWANCE TO THE TUNE OF 10% OF DISALLOWANCE MADE BY THE ASSESSING O FFICER I.E. RS.4,27,697/- WHICH WORKS OUT TO 2% OF THE TOTAL EX PENSES . THE APPELLANT GETS RELIEF OF RS.3 8,49,273/- IN THIS GROUND. 28.2 FOR THE REASONS DISCUSSED IN PARA 26.3 DISALLO WANCE OF RS. 1,68,200/- IS HELD TO BE NOT JUSTIFIED, HENCE THE S AME IS DELETED. 29.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATI VE HAVE BEEN CONSIDERED CAREFULLY. FOR THE REASONS GIVEN IN PRE VIOUS PARA, DISALLOWANCE OF 20% OF EXPENSES IS HELD TO BE NOT J USTIFIED, HOWEVER CONSIDERING THE FACT THAT THE APPELLANT HAS MADE CE RTAIN CASH PAYMENTS IN MACHINERY REPAIRS, I SUSTAIN DISALLOWAN CE OF 5% OF MACHINERY REPAIRS OF RS. 23,08,142/- I.E. RS. 1,15, 407/- OUT OF THE DISALLOWANCE OF RS. 19,19,613/-. THE APPELLANT GETS RELIEF OF RS. 18,04,206/- IN THIS GROUND. 74. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 75. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT HAS DELETED THE ADDITION. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FINDINGS OF THE CIT(A), AND THEREFOR E WE FIND NO REASON TO ITA NO 96/AHD/2006 . A.Y. 2002-0 3 32 INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GR OUND OF REVENUE IS DISMISSED. GROUND NO. 25 TO 31 ARE WITH RESPECT TO VARIOUS EXPENSES WITH RESPECT TO MEHASANA SITE. 76. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A. O. NOTICED THAT ASSESSEE HAS INCURRED FOLLOWING EXPENSES AT MEHASANA SITE. EXPENDITURE AMOUNT 20% DISALLOWANCE MADE BY A.O. DIESEL EXPENSES 1,13,79,730/- 22,75,946/- CARTING EXPENSES 1,48,54,832/- 29,70,966/- MACHINERY HIRE CHARGES 32,04,212/- 6,40,842/- DUMPER HIRE CHARGES TO K.R. JADEJA 4,69,473/- GRAVEL CARTING EXPENSES 1,63,85,824/- 32,77,165/- LABOUR EXPENSES 88,70,664/- 17,74,133/- PAYMENT TO GANESH KUMAR 74,974/- PIPE PURCHASE AND TRANSPORTATION 16,64,703/- RENT 2,44,100/- ROYALTY 5,49,140/- TRACTOR RENT 2,65,140/- 53,028/- TREE CUTTING 13,4,949/- WATER TANKER CHARGES 4,25,186/- 85,037/- 77. THE ASSESSEE WAS ASKED TO JUSTIFY THE EXPENDITU RE IN THE ABSENCE OF JUSTIFICATION TO THE SATISFACTION OF THE A.O. A.O. WORKED OUT THE DISALLOWANCE AGGREGATE DISALLOWANCE TO RS. 1,28,82,693/-. AGGRIE VED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) A FTER CONSIDERING THE ITA NO 96/AHD/2006 . A.Y. 2002-0 3 33 SUBMISSIONS OF THE ASSESSEE GRANTED SUBSTANTIAL REL IEF TO THE ASSESSEE BY HOLDING AS UNDER:- 31.8 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE,TOTAL RECEIPTS FROM THIS SITE ARE OF RS.9,11,61,109/- AND G.P. SHOWN BY THE APPELLANT IS RS.98,12,236/- W HICH IS 10.76% . THE WORK HAS BEEN TAKEN ON SUBCONTRACT FROM L&T. THE AU THORISED REPRESENTATIVE HAS FURNISHED A WORKING OF CONSUMPTI ON OF MAJOR ITEMS OF MATERIALS AS PER PAGES 372,373 OF THE PAPER BOOK ON THE BASIS OF DIFFERENCE OF FIGURES OF MATERIALS CONSUMED AS PER FIRST RA BI LL NO. 10 AND LAST BILL R.A.NO. 22. FOR AGGREGATE CARTING THE AUTHORISED RE PRESENTATIVE HAS FILED PARTY WISE DETAILS WITH QUANTITY AND RATE AS PER PA GE 374. THE TOTAL CONSUMPTION OF AGGREGATE IS OF 111033 TONS FOR WHIC H THE APPELLANT HAS PURCHASED 83667 TONS DURING THE YEAR AS THERE WAS O PENING STOCK OF 18198 TONS , THUS THE APPELLANT HAS DONE CARTING OF 83549 .903 TONS AS PER THE DETAILS SUBMITTED AT PAGE374 WHICH TALLY WITH FIGURE OF PUR CHASE OF 83667 TONS WORKED OUT AS PER PAGE 373 OF THE PAPER BOOK . THE FIGURE OF REQUIREMENT OF PIPE HAS BEEN SHOWN AS 976 METRES FOR WHICH THE APP ELLANT HAS PURCHASED 974 METRES DETAILS OF WHICH HAVE BEEN FILED AT PAGE 375 OF THE PAPER BOOK .SIMILARLY DETAILS OF PIPE CARTING AND -GRAVEL CART ING PARTY WISE AND BILL WISE HAVE BEEN FILED AT PAGES 376, 377 , DETAILS OF DIES EL PURCHASES HAVE BEEN FILED AT PAGE 378 , DETAILS OF LABOUR CHARGES OF RS .88,70,664/- PARTY WISE HAVE BEEN FILED AT PAGES 379 TO 382 , DETAILS OF MACHINE RY HIRE CHARGES WITH JUSTIFICATION FOR REQUIREMENT HAVE BEEN FILED AT PA GES 383 TO 386 OF THE PAPER BOOK . AS PER THE WORKING MADE BY THE AUTHORISED RE PRESENTATIVE AT PAGE 373 FOR REQUIREMENT OF DIESEL, THE REQUIREMENT IS O F 560156 LITRES AND PARTY WISE DETAILS SUBMITTED BY THE AUTHORISED REPRESENTA TIVE AT PAGE 378 OF THE PAPER BOOK SHOW PURCHASE OF 560270 LITRES OF DIESEL AND THE FIGURES ALMOST TALLY. FOR MACHINERY REQUIREMENT ,THE AUTHORISED RE PRESENTATIVE HAS TAKEN THE BASIS OF WORK EXECUTED IN QUANTITY TERMS LIKE E ARTH WORK OF 344535 CUM, GSB(GRANULAR SUB BASE ) OF 84152 CUM . WMM (WET MIX ED MACADAM ) AS PER PAGE 383 OF THE PAPER BOOK AND HAS ARRIVED AT TOTAL REQUIREMENT OF MACHINERY ,FOR EXAMPLE TOTAL REQUIREMENT OF MACHINERY FOR EAR THWORK WAS FOR 690 DAYS OR 6900 HOURS AS PER PAGE 384 , OUT OF WHICH OWN EXCAV ATOR WAS FOR 5814 HOURS AND HIRED EXCAVATORS WERE USED FOR 1086 HOURS . SIM ILAR SUCH WORKING WAS FILED FOR DUMPERS, TRACTORS, ROLLER, JCB ,LOADER ET C. AND DETAILS OF ACTUAL HIRE OF MACHINERIES PARTY WISE AND HOURS USED HAVE BEEN FILED AT PAGES 385. 386 OF THE PAPER BOOK. THE COPY OF ACCOUNT OF K.R. JADEJA . CO PIES OF BILLS RAISED BY HIM HAVE BEEN FILED AT PAGES 387 TO 415 OF THE PAPE R BOOK. REGARDING GRAVEL PURCHASE OR GSB AS PER THE WORKING OF THE AUTHORISED REPRESENTA TIVE AT PAGES 372 AND 373 , THE CONSUMPTION IS OF 166976.12 1 MT FOR WHICH THERE WAS OPENING STOCK OF 14826 MT AND PURCHASES WERE MA DE OF 107650 MT FOR CARTING OF WHICH PARTY WISE DETAILS HAVE BEEN FILED AT PAGE 377 OF THE PAPER BOOK . FOR LABOUR WORK FOR EARTH WORK OF 344535 CUM THE DETAILS OF SUBCONTRACT WORK PARTY WISE HAVE BEEN FILED AT PAGE 382 OF THE PAPER BOOK . THE AUTHORISED REPRESENTATIVE HAS FILED JUSTIFICATI ON FOR VARIOUS EXPENSES AT ITA NO 96/AHD/2006 . A.Y. 2002-0 3 34 THE TIME OF APPEAL HEARING WHICH WERE FORWARDED TO THE ASSESSING OFFICER ON 27.5.2005 AND THE ASSESSING OFFICER HAD TIME TILL 3 .10.2005 TO EXAMINE THE SAME THOROUGHLY AND HAS SUBMITTED A REPORT DATED 3. 10.2005 WHICH HAS BEEN CONSIDERED BY ME . IN VIEW OF THE ABOVE FACTS AND S UBSTANTIAL G.P. SHOWN BY THE APPELLANT AS SUBCONTRACTOR, I DO NOT FIND JUSTI FICATION FOR THE AD-HOC DISALLOWANCE @ 20% OUT OF THE VARIOUS EXPENSES AS H AS BEEN MADE BY THE ASSESSING OFFICER . HOWEVER ON CONSIDERATION OF THE DETAILS AND CASH PAYMENTS MADE FOR LABOUR EXPENSES AND CASH PAYMENTS MADE TO K.R. JADEJA FOR DUMPER HIRE CHARGES, I SUSTAIN DISALLOWANCE OF 2 % OF LABOUR EXPENSES OF RS.88,70,664/- I.E. RS.L,77,413/- AND 10% OF PAYMEN TS MADE TO K.R..JADEJA OF RS.4,69,433/- I.E. RS.,46,943/-. THUS DISALLOWAN CE IS SUSTAINED TO THE EXTENT OF RS.L ,77,413/- AND RS.46,493/- I.E.RS.2,2 3,906/- AND THE BALANCE DISALLOWANCES OUT OF DIESEL EXPENSES , AGGREGATE CA RTING EXPENSES, MACHINERY HIRE CHARGES, DUMPER HIRE CHARGES, GRAVEL CARTING EXPENSES AND LABOUR EXPENSES ARE DELETED. 78. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 79. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND REMAND REPORT BY A WELL REASONED ORDER HAS GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. BEFORE US, THE LD. D.R. COULD NOT CONTROV ERT THE FINDINGS OF THE CIT(A), AND THEREFORE WE FIND NO REASON TO INTERFER E WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 32 AND 33 ARE WITH RESPECT TO DISALLOWAN CE OF DIESEL EXPENSES AND LDO EXPENSES AT DHARAMPUR SITE. 80. A.O. NOTICED THAT ASSESSEE HAD INCURRED DIESEL EXPENSES AMOUNTING TO RS. 23,04,285/- AND LDO EXPENSES OF RS. 8,90,440/-. THE ASSESSEE WAS ASKED TO JUSTIFY THE EXPENSES WITH RESPECT TO LDO. THE AS SESSEE WAS ALSO ASKED TO JUSTIFY THE PURCHASE WITH REFERENCE TO THE CONSUMPT ION AND THE STORAGE FACILITY. THE SUBMISSIONS OF THE ASSESSEE WAS NOT FOUND ACCEP TABLE TO THE A.O, HE ACCORDINGLY DISALLOWED 20% OF DIESEL EXPENSES AND L DO EXPENSES (20% OF ITA NO 96/AHD/2006 . A.Y. 2002-0 3 35 DIESEL EXPENSES OF RS. 4,60,857/- AND DISALLOWANCE OF 20% OF LDO EXPENSES AMOUNTING TO RS. 1,78,088. AGGRIEVED BY THE ORDER O F A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 40.2 I HAVE CONSIDERED THE SUBMISSIONS AND THE DETAILS F ILED BY THE AUTHORISED REPRESENTATIVE CAREFULLY . AS PER THE WO RKING OF DETAILS OF MAJOR MATERIALS CONSUMED SUBMITTED BY THE AUTHORISED REPR ESENTATIVE AT PAGE 490 OF THE PAPER BOOK THE LDO OF 106158 LITRES WERE REQ UIRED FOR WHICH PURCHASES WERE MADE TO THE TUNE OF 54000 LITRES AND BALANCE D IESEL WAS USED . IT HAS BEEN STATED BY THE AUTHORISED REPRESENTATIVE THAT L DO WAS USED IN ASPHALT PLANT . THE PURCHASE OF 54000 LITRES OF LDO HAS BEE N MADE FROM BRIJ CHEMICAL AS PER DETAILS FILED AT PAGE 493 OF THE PA PER BOOK ,COPIES OF BILLS HAVE BEEN FILED AT PAGES 497 TO 501 OF THE PAPER BO OK. IN VIEW OF THE ABOVE FACTS, SUBSTANTIAL G.P. SHOWN BY THE APPELLANT IN R ESPECT OF THIS SITE AND JUSTIFICATION SUBMITTED BY THE AUTHORISED REPRESENT ATIVE, I DO NOT FIND ANY JUSTIFICATION FOR THE ADHOC DISALLOWANCE OF 20% MAD E BY THE ASSESSING OFFICER. ACCORDINGLY THE DISALLOWANCE OF RS. 1,78,0 88/- IS DELETE D. 81. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 82. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FI NDINGS OF THE CIT(A), AND THEREFORE WE FIND NO REASON TO INTERFERE WITH THE O RDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 34 IS WITH RESPECT TO ADDITION OF RS. 2, 04,000/- MADE ON ACCOUNT OF CARTING EXPENSES. 83. A.O. NOTICED THAT ASSESSEE HAD PAID RS. 2,04,00 0/- TO DHIRUBHAI DODIA FOR CARTING OF SAND. THE ASSESSEE WAS ASKED TO JUSTIFY THE EXPENDITURE AND FURNISH PROOF OF CAPACITY OF DHIRUBHAI TO RENDER SU CH SERVICES. SINCE THE ASSESSEE COULD NOT SUBSTANTIATE THE EXPENSES, A.O. DISALLOWED THE SAME. AGGRIEVED BY THE ORDER OF A.O. ASSESSEE CARRIED THE MATTER BEFORE CIT(A). ITA NO 96/AHD/2006 . A.Y. 2002-0 3 36 CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 42.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE AUTHORISED REPRESENTATIV E HAS FILED COPY OF ACCOUNT OF DHIRUBHAI DODIYA AT PAGE 508 OF THE PAPE R BOOK . THE BILL HAS BEEN RAISED BY THE PARTY FOR SAND CARTING ON 15.6. 2001 . THIS PARTY HAS ALSO DONE AGGREGATE CARTING FOR WHICH BILLS HAVE BEEN RA ISED ON 30.4.2001 AND 31.5.2001 .PAYMENTS HAVE BEEN MADE BY CHEQUES TO TH E TUNE OF RS.34,52,604/- TO THIS PARTY FOR COMBINED CARTING A ND THE OUTSTANDING AMOUNT AT THE YEAR END IS ONLY OF RS.11,000/- .COPY OF BIL L 'RAISED BY THE PARTY HAS BEEN FILED AT PAGE 510 AND COPY OF RETURN OF INCOME FILED BY THE PARTY HAS BEEN FILED AT PAGES 512 TO 515 OF THE PAPER BOOK . IN VIEW OF THE ABOVE FACTS, SUBSTANTIAL G.P. SHOWN BY THE APPELLANT IN RESPECT OF THIS SITE AND JUSTIFICATION SUBMITTED BY THE AUTHORISED REPRESENTATIVE , I DO N OT FIND ANY JUSTIFICATION FOR THE DISALLOWANCE MADE BY THE ASSESSING OFFICER .ACC ORDINGLY THE DISALLOWANCE OF RS.2,04,000/- IS DELETED 84. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 85. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. CIT(A) WHILE DELETING THE ADDITION HAS NOTED THAT T HE PARTY HAD RAISED BILLS FOR THE CARTING OF SAND DONE BY IT AND THE PAYMENTS WER E MADE BY CHEQUES. ASSESSEE HAD ALSO FILED THE COPY OF RETURN OF THE P ARTY. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS GIV EN A FINDING THAT THERE WAS NO JUSTIFICATION FOR DISALLOWANCE OF EXPENDITUR E. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FINDINGS OF THE CIT(A), AN D THEREFORE WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND TH US THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 35 IS WITH RESPECT TO DISALLOWANCE OF TR ACTOR HIRE CHARGES OF RS. 1,40,160/-. 86. A.O. NOTICED THAT ASSESSEE HAD PAID TRACTOR HIR E CHARGES AMOUNTING TO RS. 1,84,836/- TO VARIOUS PARTIES. THE ASSESSEE WAS AS KED TO SUBMIT ITA NO 96/AHD/2006 . A.Y. 2002-0 3 37 CONFIRMATIONS OF THE PERSONS AND THEIR CAPACITY TO RENDER THE SERVICES. IN THE ABSENCE OF VERIFIABLE EVIDENCE AND FAILURE ON THE P ART OF ASSESSEE TO ESTABLISH THE CAPACITY OF THE PERSONS TO RENDER SER VICES. A.O. DISALLOWED THE AMOUNT OF TRACTOR HIRE CHARGES AMOUNTING TO RS. 1,8 9,836/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE C IT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE GRANTED PARTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER:- 43.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE AUTHORISED REPRESENTATIV E HAS SUBMITTED ONLY SELF MADE VOUCHERS FOR PAYMENT OF TRACTOR HIRE CHARGES AND ACCOUNT COPIES AT PAGES 516 TO 528 OF THE PAPER BOO K .IT IS FOUND THAT PAYMENT HAS BEEN MADE TO RAKESHBHAI PATEL, GOVINDBH AI PATEL AND SHREE VIJAY CONSTRUCTION . PAYMENT TO SHREE VIJAY C ONSTRUCTION HAS BEEN MADE BY CHEQUES AND THIS PARTY IS ASSESSED TO TAX AS DISCUSSED IN EARLIER PARAS IN THIS ORDER . OUT OF PAYMENTS MA DE TO RAKESHBHAI PATEL AND GOVINDBHAI PATEL RS.25,000/- EACH I.E. RS .50,000/- HAS BEEN PAID BY CHEQUES .OUT OF TOTAL PAYMENTS OF RS.1,84,8 36/-RS.90,160/- HAS BEEN CLAIMED AS PAYMENT TO SHREE VIJAY CONST, W HICH HAS BEEN PAID BY CHEQUE . HENCE OUT OF THE DISALLOWANCE OF R S. 1,84,836/- DEDUCTION IS ALLOWED FOR RS.90,160/- PAID TO SHREE VIJAY CONST, AND RS.50,000/- PAID BY CHEQUES TO THE OTHER TWO PERSON S AND FOR THE BALANCE AMOUNT OF RS.44,676/- DISALLOWANCE IS SUSTA INED . 87. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 88. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. CIT(A) WITH RESPECT TO PAYMENT TO VIJAY CONSTRUCTIO N HAS NOTED THAT THE PAYMENT WAS MADE BY CHEQUES AND THE PARTY WAS ASSES SED TO TAX. HE HAS FURTHER NOTED THAT OUT OF THE TOTAL PAYMENTS RS. 90 ,160/- WAS PAID TO SHRI VIJAY CONSTRUCTION. HE HAS FURTHER NOTED THAT RS. 50,000 /- WAS PAID BY CHEQUE TO TWO OTHER PERSONS. AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, CIT(A) HAS UPHELD THE DISALLOWANCE TO THE EXTENT OF RS. 44 ,676/-. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FINDINGS OF THE CIT(A ), AND THEREFORE WE FIND NO ITA NO 96/AHD/2006 . A.Y. 2002-0 3 38 REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND TH US THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 36 IS WITH RESPECT TO DISALLOWANCE OF LA BOUR WELFARE EXPENSES OF RS. 3,80,000/-. 89. A.O. NOTICED THAT ASSESSEE HAD DEBITED RS. 3,80 ,000/- AS LABOUR WELFARE EXPENSES. IT WAS SUBMITTED BY THE ASSESSEE THAT IT REPRESENTED COMPENSATION PAID ON THE DATE OF SHRI VIRUBHAI DRIV ER WHO WAS WORKING AT DHARAMPUR SITE AS A DRIVER AND HAD MET WITH AN ACCI DENT. THE ASSESSEE WAS ASKED TO SUBMIT NECESSARY EVIDENCE AND PROOF WITH E VIDENCE THAT THE EXPENDITURE WAS INCURRED FOR PAYING COMPENSATION. T HE SUBMISSIONS MADE BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O ., HE ACCORDINGLY DISALLOWED THE SAME. AGGRIEVED BY THE ORDER OF A.O. , ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 45.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE NECESSARY DETAILS HAVE B EEN FILED BY THE AUTHORISED REPRESENTATIVE AT PAGES 529 TO 538 OF TH E PAPER BOOK .THE AMOUNT HAS BEEN PAID BY CHEQUE FOR COMPENSATION ON DEATH OF DRIVER AS PER CLAIM FILED BEFORE RAJKOT DISTRICT MOTOR ACCIDENT T RIBUNAL AND ON OUT OF COURT SETTLEMENT . AS THE EXPENDITURE HAS BEEN INCURRED I N THE COURSE OF BUSINESS , THE SAME IS HELD ALLOWABLE AND THE DISALLOWANCE IS DELETED. 90. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 91. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE ADDITION HAS HE LD THAT THE AMOUNT WAS PAID BY CHEQUE FOR COMPENSATION AS PER THE CLAIM FILED B EFORE RAJKOT DISTRICT MOTOR ACCIDENT TRIBUNAL AND WAS ON ACCOUNT OF OUT OF COUR T SETTLEMENT. HE HAS FURTHER HELD THAT THE EXPENDITURE WAS INCURRED IN T HE COURSE OF BUSINESS. ITA NO 96/AHD/2006 . A.Y. 2002-0 3 39 BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FI NDINGS OF THE CIT(A), AND THEREFORE WE FIND NO REASON TO INTERFERE WITH THE O RDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 37 IS WITH RESPECT TO DISALLOWANCE OF MA CHINERY REPAIRING EXPENSES OF RS. 5,33,408. 92. A.O. NOTICED THAT ASSESSEE HAD PAID AMOUNT TO V ARIOUS PARTIES LISTED ON IN PARA 15 ON PAGE 21 OF THE ORDER. IT WAS SUBMITTED THAT THE EXPENSES REPRESENTED EXPENDITURE INCURRED ON MACHINERY REPAI RS. THE ASSESSEE WAS ASKED TO PRODUCE THE BILLS FOR VERIFICATION, SINCE THE ASSESSEE COULD NOT PRODUCE THE BILLS. A.O. DISALLOWED THE AGGREGATE AM OUNT OF RS. 5,33,408 AND ADDED TO THE INCOME. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE BY DELETED THE ADDITION BY HOLDING AS UNDE R:- 46.2 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . THE COPIES OF BILLS HAVE BEE N FURNISHED AT THE TIME OF APPEAL HEARING AS PER PAGES 539 TO 582 OF THE PAPER BOOK . IN VIEW OF THE ABOVE FACTS AND SUBSTANTIAL G.P. SHOWN BY THE APPEL LANT IN RESPECT OF THIS SITE AND COPIES OF BILLS SUBMITTED BY THE AUTHORISED REP RESENTATIVE , I DO NOT FIND ANY JUSTIFICATION FOR THE DISALLOWANCE MADE BY THE ASSESSING OFFICER . ACCORDINGLY THE DISALLOWANCE IS DELETED 93. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 94. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. CIT(A) WHILE DELETING THE ADDITION AS NOTED THAT TH E COPIES OF THE BILLS WERE PRODUCED BEFORE HIM DURING THE COURSE OF APPELLATE PROCEEDINGS. AFTER PERUSING THE BILLS, HE DID NOT FIND ANY JUSTIFICATI ON FOR MAKING THE DISALLOWANCE. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FI NDINGS OF THE CIT(A), AND ITA NO 96/AHD/2006 . A.Y. 2002-0 3 40 THEREFORE WE FIND NO REASON TO INTERFERE WITH THE O RDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. GROUND NO. 38 IS WITH RESPECT TO DISALLOWANCE OF VA RIOUS EXPENSES AMOUNTING TO RS. 40,07,158/-. 95. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A. O. NOTICED THAT FOR THE JAMNAGAR SITE WHERE THE ASSESSEE WAS WORKING ON MAI NTENANCE AND CONSTRUCTION OF ROADS IN THE CAMPUS OF RELIANCE PET RO CHEMICALS. IT HAD INCURRED VARIOUS EXPENSES LIKE DIESEL OIL, LDO, PIP E PURCHASE TRANSPORTATION, MACHINERY CHARE CHARGES, OIL EXPENSES, SUB CONTRACT EXPENSES, LEFT CARTING EXPENSES AND SITE CANTEEN EXPENSES THE AGGREGATE E XPENSES BEING RS. 2,07,49,659/-. THE LIST OF EXPENSES HAS ALSO BEEN TABULATED PARA 7 ON PAGE 23 OF THE A.OS ORDER. A.O. DISALLOWED THE SAME FOR WANT OF JUSTIFICATION OF EXPENSES AND FAILURE ON THE PART OF ASSESSEE TO PRO VE THE GENUINENESS OF TRANSACTION, ESTABLISHING THE IDENTITY OF PERSONS, THEIR CAPACITY TO RENDER SERVICES AND ACTUAL USE OF MATERIAL OR SERVICE ACTI VITY FOR THE BUSINESS OF THE ASSESSEE. HE ACCORDINGLY DISALLOWED 20% OF THE SAME AMOUNTING TO RS. 41,49,932/-. AGGRIEVED BY THE ORDER OF A.O., ASSES SEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE BY HOLD ING AS UNDER:- 50.3 THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE HA VE BEEN CONSIDERED CAREFULLY . ACCORDING TO THE AUTHORISED REPRESENTATIVE THE NATURE OF WORK INCLUDED LOAD MAINTENANCE , MINOR RE PAIRS TO CIVIL WORK , PETTY MAINTENANCE WORK , MACHINERY REPAIRS ETC. FOR EACH TYPE OF WORK A SEPARATE WORK ORDER WAS ISSUED BY RELIANCE REFINE RY PROJECT , JAMNAGAR . TOTAL WORK ORDERS ISSUED WERE MORE THAN 50 . ONE WORK ORDER WAS OF RS. 1.75 CRORES PERTAINING TO GOKUL GR AM PROJECT OUT OF TOTAL CONTRACT OF RS.3.46 CRORES . THE APPELLANT HA S SHOWN SEPARATELY THE WORK DONE RELATED TO THIS PROJECT . FOR OTHER S MALL WORKS IT WAS DIFFICULT TO MAINTAIN QUANTITY DETAILS AS THE SAME HAVE BEEN GIVEN ON ADHOC BASIS TO THE SUBCONTRACTORS . AS PER THE DETA ILS SUBMITTED BY THE AUTHORISED REPRESENTATIVE DIESEL OF 208150 LITRES W ERE PURCHASED OUT OF WHICH 205893 LITRES WERE CONSUMED . DETAILS OF D IESEL PURCHASE OF 208150 LITRES WORTH RS.40,71,696/- BILL WISE AND DA TE WISE HAVE BEEN FILED AT PAGES 594 & 595 OF THE PAPER BOOK . DETAIL S OF LDO PURCHASE ITA NO 96/AHD/2006 . A.Y. 2002-0 3 41 OF 136000 LITRES WORTH OF RS.1851100/- HAVE BEEN FI LED AT PAGE 590 OF THE PAPER BOOK . THE AUTHORISED REPRESENTATIVE HAS GIVEN A WORKING OF REQUIREMENT OF LDO ON THE BASIS OF TOTAL WORK EX ECUTED OF 7935 CUM AS BEING OF 133308 LITRES WHICH TALLIES WITH AC TUAL CONSUMPTION OF LDO .THE DETAILS OF PURCHASE OF LDO ALONGWILH COPIE S OF BILLS HAVE BEEN FILED AT PAGES 604 TO 622 OF THE PAPER BOOK . THE AUTHORISED REPRESENTATIVE HAS FURNISHED DETAILS OF STONE CARTI NG OF RS.16,43,467/- DATEWISE . BILLWISE AND WITH DETAILS OF QUANTITY PU RCHASED AND THE PARTY FROM WHICH PURCHASES HAVE BEEN MADE AT PAGES 591 TO 593 OF THE PAPER BOOK .DETAILS OF SUBCONTRACT EXPENSES OF RS.9 0.82.804/- HAVE BEEN FILED BY THE AUTHORISED REPRESENTATIVE AT PAGE 596 OF THE PAPER BOOK FOR WORK OF GOKUL GRAM YOJNA .DETAILS OF MACHI NERY HIRE CHARGES OF RS.29,53,553/- HAVE BEEN FILED AT PAGES 599 TO 6 01 OF THE PAPER BOOK GIVING DETAILS BILL WISE , DATE WISE AND WITH NAME OF PARTY FROM WHOM HIRED WITH NO. OL HOURS OR DAYS HIRED AND THE RATE OF HIRE CHARGE .DETAILS OF PIPE PURCHASE OF RS.34,950/- WITH COPY OF BILL HAVE BEEN FILED AT PAGES 602 AND 603 OF THE PAPER BOOK .DETAI LS OF OIL EXPENSES OF RS.3,92,380/- WITH COPIES OF BILLS HAVE BEEN FIL ED AT PAGES 623 TO 667 OF THE PAPER BOOK . THE BILLS OF PURCHASE OF OI L AND LDO FILED BY THE AUTHORISED REPRESENTATIVE SHOW THAT BILLS HAVE BEEN RAISED IN THE NAME OF THE APPELLANT ONLY . THE AUTHORISED REPRESE NTATIVE HAS FILED DETAILS OF SITE CANTEEN EXPENSES AT PAGES 668 TO 73 6 OF THE PAPER BOOK . IN VIEW OF THE ABOVE FACTS AND JUSTIFICATION AND DETAILS OF EXPENSES SUBMITTED BY THE AUTHORISED REPRESENTATIVE , 1 DO NOT FIND ANY JUSTIFICATION FOR THE ADHOC DISALLOWANCE OF 20% MADE BY THE ASSESSING OFFICER OUT OF THESE EXPENSES EXCEPT FOR DISALLOWANCE OUT OF SITE CANTEEN EXPENSES OF RS.7,13,869/- FOR WHICH VO UCHERS HAVE NOT BEEN PRODUCED .THUS DISALLOWANCE OF RS.41,49,932/- MADE BY THE ASSESSING OFFICER IS REDUCED TO RS. 1,42,774/- RELA TING TO 20% OF SITE EXPENSES OF RS. 7,13,869/-. THUS THE APPELLANT GETS RELIEF OF RS. 40,07,158/- . 96. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 97. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) BY HIS WELL REASONED ORDER HAS GRA NTED SUBSTANTIAL RELIEF TO THE ASSESSEE AND UPHELD THE DISALLOWANCE TO THE EXT ENT OF RS. 1,42,774/-. BEFORE US, THE LD. D.R. COULD NOT CONTROVERT THE FI NDINGS OF THE CIT(A), AND ITA NO 96/AHD/2006 . A.Y. 2002-0 3 42 THEREFORE WE FIND NO REASON TO INTERFERE WITH THE O RDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 98. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISS ED. ORDER PRONOUNCED IN OPEN COURT ON 22 - 11 - 2013. SD/- SD- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHM EDABAD