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5. On appeal, in the impugned order the Learned Commissioner of Income Tax(Appeals) restricted the disallowance of Rs.3,47,256/- for which no supporting evidence was made ITA No.969 & 3315/AHD/2007 available and granted relief of Rs.10,31,076/- after considering the reason recorded in the impugned order. The reasoning given by the Learned Commissioner of Income Tax(Appeals) is contained in page-4, which reads as under :-

"I have considered the submissions and have gone through the copies of registers filed before me. At the outset, it is important to see that during the last 10 years the percentage of wages to turnover has been from 2.59% to 5% depending on the total turnover. It is seen that in accounting year 2000-01, this percentage was 5% on a turnover of Rs.3.08 crores, in the year 2001-02 the percentage dropped to 4.82% on a turnover of Rs.3.29 crores whereas in the year under consideration the percentage is 3.64% on a turnover of 5.28 crores which shows that in spite of a huge increase in turnover the wages have actually decreased compared to the last two years. The A.O. has basically doubted the genuineness of two registers which are register no. 4 & register no. 5. The register No. 4 contains the account of wages paid, leave salary paid and stipend paid whereas the register no. 5 in respect of salary paid to regular staff adding upto Rs.2,77,350/-. Even if it is assumed that these two registers were not prepared regularly during the course of year and were written in one go as due to the reason that these were destroyed as claimed by the appellant, it is a fact that professional tax has been deducted regularly through out the year on wages paid totaling Rs.5,51,135/- and duly deposited in the Govt. Treasury for which the evidence is available with the appellant. Therefore, I have no doubt in my mind that any prudent businessman would not claim a bogus deduction if he has deducted and paid professional tax on such wages. In view of this, despite the defects enumerated by the A.O. there is no doubt about the genuineness of such payment having been made,. However, regarding wages from which professional tax has not been deducted adding upto Rs.3,47,256/-, there could be no corroborative evidence regarding the genuineness of such claim since neither the workers have been produced for verification nor any positive evidence is available for payment being made. Thus the A.O.'s action in disallowing the said amount of Rs.3,47,256/- is in order. Further, the wages register no. 4 also records leave salary paid to permanent employers from which PF has also been deducted. This payment would obviously be made only to permanent workers and evidence of PF having been deposited has also been furnished by the appellant. I therefore, find no justification of disallowance of appellant's claim on this account which adds up to Rs.1,12,767/-. Further, the same register also contains details of stipend totaling Rs.20,556/- paid to the students of ITIs regarding genuineness of which there could be no doubt. Further, it is seen that salary register no. 5 is in respect of salary paid to permanent employees totaling Rs.2,77350/- which obviously is genuine since statutory deductions have been made from the amount evidence for which has been furnished by the appellant. In view of this, I am of the considered view that the disallowance of the claim of the appellant cannot be doubted except for payment of Rs.3,47,256/- for which no corroborative evidence is available. Therefore, the disallowance is directed to be restricted to this amount only".