What did the Tribunal hold?

The Tribunal restricted the disallowance on labour charges to 5% of the total claimed amount. It also deleted the addition made on account of low drawings, considering the family's average monthly drawings to be adequate.

The assessee, a labour contractor, challenged a disallowance of Rs. 2,66,700 made by the AO on labour charges supported by self-made vouchers. The assessee also contested an addition of Rs. 1,00,000 made on account of low drawings.

What were the issues?

Whether disallowance on labour charges supported by self-made vouchers is justified and if addition on account of low drawings is sustainable.

Late Kartick Chandra Ghosh… vs DCIT | ITAT Kolkata 2018

Income Tax Appellate Tribunal, BENCH ‘SMC’ KOLKATA

Before: Hon’ble Shri J.Sudhakar Reddy, AM]

This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax-(A)-14, Kolkata dated 22.02.2018 passed u/s 250 of the Income Tax Act, 1961 (the ‘Act ‘) relating to A.Y. 2012-13.

The assessee is a labour contractor. A disallowance of Rs.2,66,700/- was made on adhoc basis @10% by the AO, on the ground that these labour charges were supported by self made vouchers . This is challenged by the assessee.

After hearing rival contentions, I am of the considered opinion that the interest of justice would be served if the disallowance is restricted to 5% of the total labour charges of Rs.26,67,000/- claimed by the assessee. In the result disallowance is restricted to Rs.1,33,350/-. This ground of appeal is allowed in part.

4. The second issue is against the addition of Rs.1,00,000/- made on the ground of low drawings. The assessee had submitted that his wife and son have separate Late Kartick Chandra Ghosh (L/h Purnoima Ghosh) A.Y.2012-13 2 drawings. The total drawings of the family were Rs.3,25,000/-. The AO was of the view that this is insufficient. In my view an average monthly drawing of Rs.27,000/- for the family is adequate. Hence I delete the addition made on account of low drawings. Hence this ground of the assessee is allowed in part.

In the result the appeal of the assessee is allowed in part.

Order pronounced in the Court on 12.09.2018.

LATE KARTICK CHANDRA GHOSH, REPRESENTED BY LEGAL HEIR PURNIMA GHOSH,HOWRAH vs. DCIT, CIRCLE - 48, KOLKATA, KOLKATA

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

Recent GST High Court judgments