Shri Chandrabhan Ramachal Pandey, Ahmedabad V. The ACIT.,Circle-2(1), Baroda

CO 104/AHD/2011

• Counselvise Citation: [2014] 123 COUNSELVISE.COM (IT) 0126 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-12-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 20-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 68; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI N. S. SAINI, ACCOUNTANT MEMBER. ITA. NO. 1243/AHD/2011 (ASSESSMENT YEAR:2007-08) THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-2(1), 2 ND FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA A PPELLANT VS. SHRI CHANDRABHAN RAMACHAL PANDEY, PROP: OF M/S. SHAKTI ENTERPRISE, 807, DWARKESH COMPLEX, R.C. DUTT ROAD, ALKAPURI, BARODA. RESPONDENT & C. O. NO. 104/AHD/2011 (ASSESSMENT YEAR:2007-08) SHRI CHANDRABHAN RAMACHAL PANDEY REPRESENTED B SMT. INDRAMATI C. PANDEY, WIDOW & LEGAL HEIR OF THE DECEASED PROP: OF M/S. SHAKTI ENTERPRISE, 807, DWARKESH COMPLEX, R.C. DUTT ROAD, ALKAPURI, BARODA. APPELLANT I.T.A. NO.1243/AHD/11 & C.O. NO.104/AHD/11 FOR A.Y. 07-08 (ACIT VS. SHRI CHANDRABHAN RAMACHAL PANDEY) PAGE 2 VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-2(1), 2 ND FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA RESPONDENT PAN: AEYPP9644P / BY REVENUE :SHRI ROOP CHAND, SR. D.R. / BY ASSESSEE : SHRI B. R. POPAT, A.R. /DATE OF HEARING :22.12.2014 !' /DATE OF PRONOUNCEMENT : 22.12.2014 ORDER PER BENCH SINCE, BOTH THESE REVENUES APPEAL AND ASSESSEES C ROSS OBJECTION ARE ARISING OUT FROM THE SAME ORDER OF CI T(A)-II, BARODA, DATED 20.01.2011 FOR A.Y. 2007-08, SO THEY ARE BEING DISPOSED OF BY COMMON ORDER FOR SAKE OF CONVENIENCE . 2. IN ITA NO. 1243/AHD/2011, REVENUE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ID.CIT(APPEALS) HAS ERRED IN DELETING T HE ADDITION OF RS. 1,18,23,546/- MADE ON ACCOUNT OF DISALLOWANC E OF LABOUR EXPENSES BY INVOKING SECTION 37 AND ALSO ALTERNATIVELY UNDER SECTION 40(A)(IA) OF THE ACT, I N ADOPTING THE NET PROFIT @ 15% OF THE GROSS RECEIPT AND THERE BY I.T.A. NO.1243/AHD/11 & C.O. NO.104/AHD/11 FOR A.Y. 07-08 (ACIT VS. SHRI CHANDRABHAN RAMACHAL PANDEY) PAGE 3 ALLOWING A RELIEF TO THE ASSESSEE OF RS.95,30,077/- WITHOUT ANY JUSTIFICATION EVEN THOUGH THE ID.CIT(APPEALS) A CCEPTED THAT : (I) THE CONTENTION OF THE ASSESSEE THAT THE LABOURE RS WERE NOT PAID FOR MORE THAN A YEAR OUTSTANDING LIABILITY WAS PAID IN NEXT TWO YEARS WAS AGAINST HUMAN PROBABILIT Y AND MISLEADING. THE DOCUMENTS FILED BY THE ASSESSEE IN SUPPORT OF PAYMENT DOES NOT CARRY ANY CREDIBILIT Y PRIMARILY BECAUSE THEY WERE NOT PRODUCED BEFORE THE AO DESPITE SEVERAL OPPORTUNITIES AND SECONDLY THEY LACK SANCTITY BECAUSE IT IS NOT POSSIBLE TO BELIEVE THAT THE LABOUR HAS WORKED FOR FREE FOR ONE YEAR AND THE N WAITED FOR PAYMENT FOR ANOTHER TWO YEARS. (II) THE AMOUNT WAS NOT PAID TO THE LABOURERS FOR THE WHOLE YEAR WITH AN UNDERSTANDING WITH THE GROUP LEADERS THAT PAYMENT WILL BE MADE ONLY AFTER REALIZATION FROM THE GOVERNMENT. APART FROM THE FAC T THAT SUCH CONTENTION WAS NOT SUPPORTED BY ANY EVIDENCE WHATSOEVER, IT SHOWS IF THE CONTENTION IS ACCEPTED THAT THE ASSESSEE WAS NOT DEALING WITH LABOURS DIRECTLY, AND IN THAT CASE THE AMOUNT WHICH HAS TO BE CONSIDERED FOR THE PURPOSE OF TDS IS THE AMOUNT WHICH IS TO BE PAID THROUGH A PARTICULAR GRO UP LEADER WHO HAS APPARENTLY ACTED AS SUB-CONTRACTOR F OR SUPPLY OF LABOURS. UNDER THE CIRCUMSTANCES, THE PROVISIONS OF SECTION 40(A)(IA) WILL BE FULLY APPLI CABLE. (III) IT IS NOT A CASE WHERE NORMAL PROFIT RATE WOU LD BE APPLIED . 2.1 AT THE OUTSET OF HEARING, LD. AUTHORIZED REPRES ENTATIVE POINTED OUT THAT THIS APPEAL HAS BEEN FILED BY REVE NUE AGAINST DECEASED PERSON IN SPITE OF THE FACT THAT REVENUE W ERE AWARE OF THE FACTS, TO SUBSTANTIATE THE SAME LD. AUTHORIZED REPRESENTATIVE PLACED ON RECORD LETTER DATED MARCH 05, 2011 I.T.A. NO.1243/AHD/11 & C.O. NO.104/AHD/11 FOR A.Y. 07-08 (ACIT VS. SHRI CHANDRABHAN RAMACHAL PANDEY) PAGE 4 ADDRESSED TO CONCERN ASSISTANT COMMISSIONER OF INCO ME TAX FOR GIVING EFFECT TO THE ORDER OF CIT(A), BARODA FO R A.Y. 2007-08 THROUGH LEGAL HEIRS IN SPITE OF THE FACT APPEAL HAS BEEN FILED IN THE NAME OF DECEASED PERSON. FINDING FORCE IN THE CONTENTION OF ASSESSEE, WE ARE OF THE VIEW THAT APPEAL IS NOT MAINTAINABLE IN THE NAME OF DECEASED PERSON. SO, WE DISMISS THE SAME. IN THE INTEREST OF JUSTICE, REVENUE IS AT LIBERTY TO F ILE ITS APPEAL THROUGH LEGAL HEIRS AS PER LAW WITHIN REASONABLE TI ME. SINCE, WE ARE DISMISSING THE APPEAL ON PRELIMINARY ISSUE, SO WE ARE REFRAINING TO COMMENT ON THE MERIT OF THE ISSUE AT HAND. 3. IN C.O. NO. 104/AHD/2011, ASSESSEE HAS FILED THE C.O. ON FOLLOWING GROUNDS: THE LEARNED CIT(A) HAS ERRED IN: 1. PARTLY CONFIRMING THE ADDITION OF RS.1,18,23,546 /- ORIGINALLY MADE BY THE AO IN RESPECT OF LABOUR EXPE NSES, BY INVOKING SECTION 37 READ WITH SECTION 40(A)(IA) OF THE ACT. CONSIDERING THE FACTS OF THE CASE AND THE LEGAL POS ITION, HE OUGHT TO HAVE DELETED THE ENTIRE ADDITION. 2. CONFIRMING THE ADDITION OF RS.8,20,000/- UNDER SECTION 68 OF THE ACT, IN RESPECT OF THE AMOUNT DEP OSITED IN THE BANK ACCOUNT OF THE HUF, WHICH IS ALTOGETHER A DIFFERENT ENTITY, ASSESSABLE TO TAX SEPARATELY AND HAVING IND EPENDENT SOURCE OF INCOME. CONSIDERING THE FACTS OF THE CAS E AND THE LEGAL POSITION, HE OUGHT TO HAVE DELETED THE ENTIRE ADDITION. 4. CROSS OBJECTION FILED BY ASSESSEE IS ARISING OUT FROM THE ORDER OF SAME CIT(A). AS DISCUSSED ABOVE, REVENUE S APPEAL IS DISMISSED AS NOT MAINTAINABLE, SO ASSESSEE MAY EXER CISE THE I.T.A. NO.1243/AHD/11 & C.O. NO.104/AHD/11 FOR A.Y. 07-08 (ACIT VS. SHRI CHANDRABHAN RAMACHAL PANDEY) PAGE 5 SAME WHEN APPROPRIATE SITUATION AROSE FOR THIS, IN CASE REVENUE FILES THE APPEAL WITHIN REASONABLY TIME AS INDICATED ABOVE. SO, APPEAL OF REVENUE AS WELL AS CROSS OBJE CTION OF ASSESSEE ARE DISMISSED AS INDICATED ABOVE. 5. IN RESULT, REVENUES APPEAL AS WELL AS ASSESSEE S CROSS OBJECTION IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF DECEMBER, 2014. SD/- SD/- (N. S. SAINI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA # # # # %& %& %& %& '&' '&' '&' '&' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. ,, - / CONCERNED CIT 4. -- / CIT (A) 5. &12 %, , / DR, ITAT, AHMEDABAD 6. 256 78 / GUARD FILE. BY ORDER / # , 9/ , , ;