HIGH COURT OF PUNJAB & HARYANA

Dabwali Transport Co.

v.

Commissioner of Income-tax

M. M. KUMAR AND AJAY KUMAR MITTAL, JJ.

IT Appeal Nos. 175 and 176 of 2007

October 15, 2007

Section 143 of the Income-tax Act, 1961 - Assessment - Additions to income - Assessment year 2000-01 - Assessee-firm, deriving income from transportation contracts, claimed certain sum as labour expenses - In view of fact that assessee had paid labourers at rates more than market rates, Assessing Officer held that assessee had inflated labour expenses and, consequently, he partially disallowed amount claimed by assessee - Commissioner (Appeals) as well as Tribunal further reduced quantum of disallowance to some extent - Whether in absence of any standard method of chart which might constitute basis to say that norms of computation of labour expenses had been violated, finding of Tribunal, being pure finding of fact, was to be upheld -Held, yes

FACTS

The assessee-firm was deriving income from transportation contracts. In its return of income for the assessment year 2000-01,the assessee claimed certain amount as labour expenses in respect of loading and unloading of wheat bags. In absence of proper records and details of drivers to whom payments were made, and further, in view of fact that the assessee paid the labourers at the rates more than the market rates, the Assessing Officer held that that the assessee had inflated the labour expenses. Consequently, he made partial disallowance of the expenditure claimed by the assessee. On appeal, the Commissioner (Appeals) reduced the addition. On second appeal, the Tribunal further reduced the disallowance to some extent.

On appeal under section 260A:

HELD

The question of expenditure on labour charges was a pure question of fact. In the instant appeal filed under section 260A, the High Court could not reappreciate the evidence to record a conclusion contrary to the one recorded by the Tribunal. There was no standard method or chart available which might constitute the basis to say that the norm had been violated and according to the principles of law, the addition sustained by the Tribunal suffered from an error of law or jurisdiction. There was, thus, no substantial question of law which arose for determination of the High Court. Therefore, the appeals being wholly devoid of merit were to be dismissed. [Para 4]