Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER PER R.S. SYAL, VP : This appeal by the assessee arises out of the order dated 26-11-2018 passed by the CIT(A)-1, Kolhapur in relation to the assessment year 2011-12. 2. The first issue is against the confirmation of disallowance of labour charges at 7.38%. 3. Briefly stated, the facts of the case are that the assessee is engaged in manufacture of finished casting. It claimed deduction of Labour charges (Others) at Rs.4,71,821/- and Labour charges (Job work) at Rs.99,05,059/-. During the course of assessment proceedings, the Assessing Officer (AO) observed that most of the expenses were supported by self-made vouchers and hence were not verifiable. He took note of the fact that for the A.Y. 2008-09, the disallowance out of Labour charges was made at Rs.7.38% for similar reasons, which got confirmed in the first appeal. Considering the entire facts, the AO made disallowance for a sum of Rs.10,37,688/- at 10%. The ld. CIT(A) reduced the disallowance to 7.38%. Aggrieved thereby, the assessee has come up in appeal before the Tribunal.
We have heard the ld. DR and gone through the relevant material on record. There is no appearance from the side of the assessee despite notice. As such we are proceeding to dispose of the appeal ex parte qua the assessee. It is seen that the disallowance out of Labour charges was sustained for the A.Y. 2008-09 at 7.38%. A categorical finding has been recorded that the assessee accepted such an order and did not agitate it in further appeal before the Tribunal. Admittedly, the expenses under the head Labour Charges, both - ‘Others’ and ‘Job work’, were not properly supported by vouchers. Considering the entirety of the facts and circumstances of the instant case, we are satisfied that the disallowance sustained by the ld. CIT(A) at 7.38% is just and fair. We, therefore, uphold the impugned order on this score.
The other ground is about the ad hoc disallowance of Rs.2,67,160/- made by the AO out of various expenses. The AO observed that the assessee incurred certain expenses, like, Telephone, Travelling, Factory expenses, Machine maintenance, Petrol expenses, Vehicle repair etc., which were not properly supported by vouchers. Taking a cue from the A.Yrs. 2005-06, 2006-07 and 2008-09, the AO made disallowance at 10% of such expenses at Rs.2,67,160/-. The ld. CIT(A) sustained the disallowance.
Having heard the ld. DR and gone through the relevant material on record, it is observed that the expenses incurred by the assessee under the respective heads, taken note of by the AO at last page of his order, were either not supported by proper vouchers or had personal element. Considering the fact that the disallowance has been sustained at 10% in the earlier years, we approve the view taken by the ld. CIT(A).
The only other ground which survives in this appeal is against the invocation of provisions of section 145(3) of the Act.
In view of the fact that the expenses were not properly vouched and were made on the basis of self-prepared vouchers, we are satisfied that the AO was justified in invoking the provisions of section 145(3) of the Act. This ground fails.
In the result, the appeal is dismissed. Order pronounced in the Open Court on 20th April, 2022.