ACIT, CIRCLE - 25, KOLKATA, KOLKATA vs. SRI WAKIL AHMED, KOLKATA

This appeal filed by the Revenue against the order dated 30.05.2017 passed by CIT(A)-7, Kolkata u/s 143(3) of the Income Tax Act, 1961 (in short “Act”) for AY 2013-14.

The only issue is to be decided as to whether the CIT(A) is justified in deleting the addition made on account of wages & labour charges in the facts and circumstances of the case.

Heard both parties and perused the material available on record. It is noted from the assessment record that the AO compared the expenditure incurred on account of wages and labour charges with that of A.Y. 2012-13 and held the expenditure claimed for the year under consideration is highly inflated and exaggerated and for non-furnishing of proof, the AO disallowed 50% of said claim expenditure. The CIT(A) while deleting the said addition observed that in the absence of comparable cases, the addition made by the AO is not justified. Before us, Ld.AR submitted that in earlier year and subsequent year, the Revenue accepted net profit @ 8% and accordingly prayed to adopt the same for the year under consideration. We find force in the arguments of Ld.AR and, therefore, the order of CIT(A) is set aside and we direct the AO to adopt the net profit rate @ 8% and pass order accordingly. Therefore, we deem it proper to remand the matter to the file of AO for his fresh consideration. Thus, grounds raised by the Revenue are allowed for statistical purposes.

In the result, the appeal of the Revenue is allowed for statistical purposes.