MANSINGH GIRIRAJSINGH RAJPUT,VADODRA V. THE INCOME TAX OFFICER, WARD 3(1)(5), VADODARA, BARODA

ITA 1915/AHD/2024

AI Insights

The case involves Mansingh Girirajsingh Rajput, an individual contractor, who appealed against the order of the Commissioner of Income Tax (Appeals) confirming a 10% disallowance on labor charges amounting to Rs.20,88,220 for the Assessment Year 2017-18. The Assessing Officer initially made this disallowance during the assessment proceedings, citing non-production of all vouchers and estimating the disallowance. The CIT(A) upheld this decision, leading to the current appeal. The tribunal heard arguments from both sides, with the assessee's representative arguing that detailed records were provided and that a similar issue in the subsequent assessment year did not result in any addition. The tribunal decided to reduce the disallowance to 6% to resolve the dispute.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23316 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 250

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No.1915/Ahd/2024 Assessment Year: 2017-18 Mansingh Girirajsingh Rajput, 6, Aakruti Bunglows, Beside Sona Nagar, Nava Bazar, Karjan,Vadodara-391240 [PAN: ATCP3597G] Vs The Income Tax Officer, Ward-3(1)(5), Vadodara. (Appellant) .. (Respondent) Assessee Represented by : Shri Chetan Agarwal, AR. Revenue Represented by : Shri Ravindra, Sr. D.R. Date of hearing : 19.02.2025 Date of pronouncement : 07.03.2025 आदेश/ORDER PER : DR. BRR KUMAR, VICE PRESIDENT: Delay Condoned This appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as \"CIT(A)\" for short) dated 26.04.2023 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as \"the Act\" for short], for Assessment Year (AY) 2017-18. 2. The assessee has raised the following grounds of appeal: “Learned AO CIT(A) erred in law as well as on facts in upholding an addition of Rs.20,88,220/- being disallowance of 10 percent of I.T.A No. 1915/Ahd/2024 A.Y. 2017-18 Page No 2 labor/wage expenses debited in profit and loss account on conjecture and surmises.” 3. The brief facts of the case are that the assessee is an individual, who is engaged/worked as a contractor for the year under consideration. The return of income for the year under consideration was filed on 20.08.2017 declaring total income of Rs.8,34,910/-. During the course of assessment proceedings, the Assessing Officer made two additions on account of (i) disallowance towards excess PF of Rs.4,55,435/- and (ii) disallowance of Rs. 20,88,230/- being 10% of the total labour charges debited in profit & loss account of the assessee. 4. Aggrieved by the aforesaid additions made by the Assessing Officer, the assessee filed appeal before the ld. CIT(A) who deleted the addition of Rs.4,55,435/-, but confirmed the addition of Rs.20,88,220/- being disallowance of 10% of labour charges of Rs.2,08,82,197/-, debited in profit and loss account of the assessee. 5. Aggrieved by the order of the Ld. CIT(A) confirming the addition of Rs.20,88,220/-, the assessee is now in appeal before the Tribunal. 6. Before us, Ld. AR submitted that the assessee has submitted the detailed labour register mentioning all the details before the Assessing Officer during the assessment proceedings, but he did not consider the same and made the disallowance on estimation basis. He further submitted that AY 2018-19 was also scrutinized on the same reason which was finalized without any addition. The Ld. AR therefore urged I.T.A No. 1915/Ahd/2024 A.Y. 2017-18 Page No 3 that the addition of Rs.20,88,230/- made by the Assessing Officer towards disallowance of labour charges be deleted. 7. The Ld. DR, on the other hand, relied on the orders of the authorities below. 8. Rebutting the stands of the Revenue, the Ld. AR submitted that, in order to end up the protracted litigation, the disallowance @ 6% would be agreeable provided that the same cannot be treated as a precedent for reopening of the case for the earlier years or for determination of the profit for the subsequent years. 9. Heard both the parties and perused the material available on record. We find that the Assessing Officer had disallowed Rs.20,88,220/- being 10% of the total labour charges debited in Profit & Loss account of the assessee. The sole reason for disallowance was that all the vouchers were not produced before the Assessing Officer and disallowance was made on estimation basis. Keeping in view the entire facts and the profits declared by the assessee, we hold that disallowance be restricted to 6% instead of 10%. 10. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 07.03.2025 Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR.B.R.R. KUMAR) JUDICIAL MEMBER VICE PRESIDENT Ahmedabad : Dated 07.03.2025 I.T.A No. 1915/Ahd/2024 A.Y. 2017-18 Page No 4 आदेश क\u0006 \u0007\bत ल\fप अ\u000fे\fषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, TRUE COPY उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "