On appeal, the Tribunal observed that the AO did not doubt the genuineness of the expense but disallowed the claim for want of original bills and vouchers. Further, it observed that the payments were made to labourers at work sites mainly in the remote areas. The Tribunal also observed that, there was increase in turnover and investments in fixed assets of the company, whereas the wage expenses were one third of the wage expenses of the earlier assessment years. On the aforesaid basis, the Tribunal concluded that the expenses were incurred in the course of business operation of the assessee. However, as proper bills and vouchers were not maintained, the disallowance was restricted to 10 per cent of the claim. (ITA No. 133/Cuttack/2017) (AY. 2012-13)
Anil Contractors P. Ltd. v. DCIT (2018) 63 ITR 4(SN) (Cuttack) ( Trib)
S. 37(1): Business expenditure –Compelled to make cash payments to labourers at work sites in remote areas, genuineness of expenditure could not be doubted. However, where no proper documentation or bills or vouchers were maintained, disallowance was to be restricted to 10 percent of the total claim .