M/s. Vijay Bahadur Singh & Sons Pvt. Ltd., V. ACIT Circle, SATNA

CO 4/JAB/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9853 (ITAT-JABALPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 19-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK SHUKLA
• Assessee Lawyers: A P SHRIVASTAVA
• Keywords: Additional evidence; Corroborative evidences
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER ITA NO.22/JAB/2013 ASSESSMENT YEAR: 2008-09 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S. VIJAY BAHADUR SINGH & SONS CIRCLE-SATNA, SATNA. PVT. LTD., SINGRAULI COLLIE RY, SIDHI (M.P.) (PAN: AABCV 7108 C) C.O. NO.04/JAB/2013 (IN ITA NO.22/JAB/2013) ASSESSMENT YEAR: 2008-09 M/S. VIJAY BAHADUR SINGH & SONS VS. ASSTT. COMMISS IONER OF INCOME TAX, PVT. LTD., SINGRAULI COLLIERY, CIRCLE-SATNA, SATN A. SIDHI (M.P.) (PAN: AABCV 7108 C) (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI ABHISHEK SHUKLA, D.R. ASSESSEE BY : SHRI A.P. SHRIVASTAVA DATE OF HEARING : 22.09.2014 DATE OF PRONOUNCEMENT : 26.09.2014 ORDER PER PRAMOD KUMAR, ACCOUNTANT MEMBER: BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CA LLED INTO QUESTION CORRECTNESS OF LEARNED COMMISSIONER OF INCOME TAX ( APPEALS)S ORDER DATED 31 ST 2 ITA NO.22/JAB/2013 & C.O. NO.04/JAB/2013 A.Y. 2008-09 AUGUST 2012, IN THE MATTER OF ASSESSMENT U/S. 143(3 ) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2008-09, ON THE FOLLOWING G ROUNDS :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACTS AND IN LAW :- (I) IN DELETING THE ADDITION OF RS.56,76,147/- MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) OF THE I.T. ACT. (II) IN NOT CONSIDERING THE FACT THAT THE ASSESSEE HAS PAID RS.64,755/- ON ACCOUNT OF TDS ON 27/01/2011 AFTER T HE FILING OF RETURN U/S 139. (III) IN RESTRICTING THE ADDITION OF RS.3,00,353/- MADE OUT OF DIESEL & LUBRICANTS, SALARY & WAGES AND SITE OFFICE & MAIN TENANCE EXPENSES BEING 10% OF THE TOTAL EXPENSES OF RS.15,0 1,170/- CLAIMED UNDER THESE HEADS. (IV) IN ADMITTING THE ADDITIONAL EVIDENCE UNDER RUL E 46A IN VIOLATION OF REQUIREMENTS THEREOF. 2. THAT THE APPELLANT RESERVES THE RIGHT TO AMEND/A LTER ANY OF THE GROUNDS OF APPEAL/ADD OTHER GROUNDS OF APPEAL AT TH E TIME OF HEARING. 2. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION, CHA LLENGING THIS LEARNED COMMISSIONER OF INCOME TAX (APPEALS)S ORDER, BUT A S THE C.O. IS NOT PRESSED BEFORE US, IT IS DISMISSED IN LIMINE. 3 ITA NO.22/JAB/2013 & C.O. NO.04/JAB/2013 A.Y. 2008-09 3. COMING BACK TO THE APPEAL FILED BY THE ASSESSING OFFICER, SO FAR AS GROUND NOS.1(I), 1(II) AND 1(IV) ARE CONCERNED WHICH WE WILL TAKE UP TOGETHER, RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE IS ENGA GED IN CARRYING ON BUSINESS AS A CONTRACTOR. DURING THE COURSE OF SCRUTINY ASSESSME NT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT WHILE THE ASSESSEE HAS MADE PA YMENTS TO SUB-CONTRACTORS AGGREGATING TO RS.9,27,51,071/- AS PER PROFIT AND L OSS ACCOUNT, THE AGGREGATE OF PAYMENTS, ON WHICH TAXES HAVE BEEN DEDUCTED AT SOUR CE AS PER TDS RETURNS, COMES TO ONLY RS.8,70,74,924/-. IT WAS ON THIS BASIS THA T THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT PAYMENTS AGGREGATING TO RS.56,7 6,147/-(I.E. RS.9,27,51,071/- MINUS RS.8,70,74,924/-) HAVE BEEN MADE TO SUB-CONTR ACTORS WITHOUT DEDUCTING TAX AT SOURCE FROM THE SAME. THE ASSESSEES EXPLANATIO N WAS THAT THESE AMOUNTS HAVE NOT BEEN INCLUDED IN THE TDS RETURNS, BUT THIS EXPL ANATION WAS REJECTED ON THE GROUND THAT THE ASSESSEE HAS NOT REVISED THE TDS RE TURNS. ACCORDINGLY, A DISALLOWANCE OF RS.56,76,147/- WAS MADE U/S 40(A)(I A) OF THE ACT. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CO MMISSIONER OF INCOME TAX (APPEALS) WHO DELETED THIS DISALLOWANCE BY OBSERVIN G AS FOLLOWS :- DECISION I CONSIDERED THE SUBMISSION MADE BY THE LD. AR CAREFULLY. THE COUNSEL OF THE APPELLANT COULD NOT EXPLAIN THE ERROR IN THE TDS RETURN NOR COULD HE FILE ANY EVIDENCE SUGGE STING ITS REVISION TO RECTIFY THE MISTAKE. FROM THE FAILURE OF THE AP PELLANT TO CLARIFY AND RECONCILE THE DIFFERENCE IN PAYMENTS MADE TO SUB-CO NTRACTORS AT THE 4 ITA NO.22/JAB/2013 & C.O. NO.04/JAB/2013 A.Y. 2008-09 ASSESSMENT STAGE, THE ASSESSING OFFICER MADE AN INF ERENCE OF PAYMENT OF RS.56,76,147/- MADE TO THE SUB-CONTRACTORS WITHO UT DEDUCTION OF TAX AT SOURCE. HOWEVER, THE LD. AR SUBMITTED ADDIT IONAL EVIDENCE OF DEDUCTION OF TAX AT SOURCE ON SUCH PAYMENTS AND ITS DEPOSIT TO THE CREDIT OF THE CENTRAL GOVERNMENT A/C BEFORE FILING THE RETURN, REVISION OF TDS RETURN IN FORM NO.26Q, LEDGER ACCOUNT OF PAY MENT TO SUB- CONTRACTORS AND LEDGER ACCOUNT OF TDS PAYABLE TO SUB- CONTRACTORS AT THE APPELLATE STAGE ALONG WITH APPL ICATION IN FORM NO.46A WHICH WERE FORWARDED TO THE ASSESSING OFFICE R FOR HIS VERIFICATION AND COMMENT ON 27-08-2012. THE ASSESS ING OFFICER VERIFIED THE SAME AND SUBMITTED HIS REPORT ON 30-08 -2012 BY COMMENTING THAT THE PROVISIONAL QUARTERLY TDS RETUR N IN FORM NO.26Q FOR ALL THE FOUR QUARTERS OF THE FINANCIAL Y EAR 2007-08 RELEVANT TO THE ASSTT. YR. 2008-09 REVEAL DEDUCTION OF TAX AT SOURCE OF RS.9,88,950/- FOR PAYMENT OF RS.8,70,74,924/- TO TH E SUB-CONTRACTORS. IN ADDITION TO THAT, THE STATEMENT OF TDS U/S 200(3 ) ALONG WITH FORM NO.27A AND COPY OF THE CHALLAN REVEALS THAT TAX OF RS.64,755/- INCLUDING INTEREST WAS DEDUCTED AT SOURCE ON PAYMEN T OF RS.56,76,147/- AND CREDITED TO THE CENTRAL GOVERNME NT A/C ON 11-04- 2008. ON THE FACTS AND IN THE GIVEN CIRCUMSTANCES OF THE CASE, I FIND THAT THE APPELLANT DEDUCTED TAX AT SOURCE ON PAYMEN T OF RS.56,76,147/- MADE TO THE SUB-CONTRACTORS IN MARCH 2008 AND DEPOSITED THE SAME TO THE CREDIT OF CENTRAL GOVERNM ENT A/C BEFORE FILING THE RETURN FOR THE YEAR UNDER CONSIDERATION AND HENCE, ADDITION MADE TO THE RETURNED INCOME ON THIS SCORE BY INVOKI NG PROVISION U/S 40(A)(IA) OF THE ACT IS NOT SUSTAINABLE. THE GROUND OF APPEAL IS ALLOWED. 4. THE ASSESSING OFFICER IS AGGRIEVED OF THE RELIEF SO GRANTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AND IS IN APPE AL BEFORE US. 5 ITA NO.22/JAB/2013 & C.O. NO.04/JAB/2013 A.Y. 2008-09 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE A PPLICABLE LEGAL POSITION. 6. WE FIND THAT SO FAR AS TAX DEDUCTIONS AT SOURCE FROM PAYMENTS OF RS.56,76,147/-, WHICH ARE IN DISPUTE, ARE CONCERNED , THESE DEDUCTIONS WERE DULY MADE BY THE ASSESSEE AND TAXES WERE DEPOSITED ON 11 .04.2008. THE DEPOSITS WERE MADE AFTER THE END OF RELEVANT PREVIOUS YEAR THOUGH BEFORE FILING OF THE RELEVANT INCOME TAX RETURN, NECESSARY EVIDENCE FOR COMPLIANC E HAVE BEEN EXAMINED BY THE ASSESSING OFFICER HIMSELF IN REMAND PROCEEDINGS AND HE HAS ACCEPTED CORRECTNESS OF THE SAME. IN THESE CIRCUMSTANCES, THERE IS NO J USTIFICATION FOR THE GRIEVANCE BEING RAISED NOW BY THE ASSESSING OFFICER. AS FOR THE ADDITIONAL EVIDENCE, BY WAY OF DEPOSITING THE TDS ON 11.04.2008, EVEN IF IT CAN BE TERMED AS AN ADDITIONAL EVIDENCE, THE ASSESSING OFFICER HAD ADEQUATE OPPORT UNITY TO MAKE HIS SUBMISSIONS IN THIS RESPECT AND HE HAS NOT EVEN DOUBTED CORRECT NESS OF THESE EVIDENCES. IN VIEW OF THESE DISCUSSIONS AS ALSO BEARING IN MIND ENTIRE TY OF THE CASE, WE DO NOT SEE ANY REASONS TO INTERFERE IN THE CONCLUSIONS ARRIVED AT BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON THESE ISSUES. WE APPROVE A ND CONFIRM HIS FINDINGS, AND, CONSEQUENTLY DECLINE TO INTERFERE IN THE MATTER. 6 ITA NO.22/JAB/2013 & C.O. NO.04/JAB/2013 A.Y. 2008-09 7. GROUND NO.1(I), 1(II) AND 1(IV) ARE DISMISSED. 8. AS FAR GROUND NO.1(III) IS CONCERNED, WE NEED TO TAKE NOTE OF ONLY A FEW MATERIAL FACTS. DURING THE COURSE OF SCRUTINY ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER DISALLOWED 20% OF EXPENSES UNDER THE HEAD DIESEL AND LUBRICANTS, SALARY & WAGES AND SITE OFFICE AND CAMP MAINTENANCE EXPENSES ON THE GROUND THAT RELEVANT SUPPORTING EVIDENCES CO ULD NOT BE PRODUCED. AGGRIEVED, ASSESSEE CARRIED THE MATER IN APPEAL BEF ORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHO RESTRICTED THE DISALLOW ANCE TO 10% OF EXPENSES, I.E. RS.1,50,170/-. WHILE DOING SO, LEARNED COMMISSIONE R OF INCOME TAX (APPEALS) OBSERVED AS FOLLOWS :- DECISION I CONSIDERED THE SUBMISSION MADE BY THE LD. AR C AREFULLY. THE BURDEN IS ON THE ASSESSEE TO PROVE THAT THE EXPENSES WERE LAI D OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. [RELIED ON ASSAM PESTICIDES & AGRO CHEMICALS VS. CIT (GAU.) 227 ITR 846, GOODLAS NEROLAC PAINTS LTD. VS. CIT (B OM) 137 ITR 58]. EVEN THOUGH THERE IS NO ADVERSE REMARK BY THE AUDITORS, STILL D ISALLOWANCE CAN BE MADE. [RELIED ON GOODYEAR INDIA LTD. VS. ITO (ITAT, DEL) 66 TTJ 164] . THE ADVERSE FINDING OF THE ASSESSING OFFICER INCORPORATED IN HIS ORDER OF ASSE SSMENT RELATING TO THE FULL ADMISSIBILITY OF THE EXPENSES BOOKED UNDER DIFFEREN T HEADS HAS NOT BEEN REFUTED BY ADDUCING THE PROPER BILLS AND VOUCHERS IN ANY PROCE EDINGS UNDER THE ACT. THAT APART, THE APPELLANT HAS DISCLOSED NP AT 0.87 PERCENT OF T HE TURNOVER AGAINST NP OF 5.55% DISCLOSED IN THE IMMEDIATELY PRECEDING PREVIOUS YEA R RELEVANT TO THE ASST. YR. 2007-08 7 ITA NO.22/JAB/2013 & C.O. NO.04/JAB/2013 A.Y. 2008-09 AND THUS, THERE IS STEEP FALL IN NP. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, THE CLAIM FOR FULL ADMISSIBILITY OF SUCH EXPENSES B EING NOT ESTABLISHED, THE AO IS JUSTIFIED IN DISALLOWING THE EXPENSES IN PART. HOW EVER, IN VIEW OF THE TURNOVER AND OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT DISALLOWANCE AT 20% OF SUCH EXPENSES IS AT HIGHER SIDE AND RELYING ON RATIO OF THE CASES IN LALCHAND LAXMILAL VS. ITO (1977) 3 TTJ (JAB) 350, 352, RATAN LAL KAJUDMAL VS. ITO 10 TTJ (JP) 43, ETC., THE ESTIMATED ADDITION IS REDUCED TO 10% OF SUCH EX PENSES AS REASONABLE. THE APPELLANT GETS A RELIEF OF RS.1,50,170/-. 9. NOW THE ASSESSING OFFICER IS AGGRIEVED OF THE RE LIEF SO GRANTED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND IS IN APPEAL BEFORE US. 10. HAVING HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD, WE SEE NO REASONS TO INTERFERE IN THE ORDER OF THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ASPECT EITHER. WE HAVE NOTED THA T THERE ARE NO SPECIFIC DEFECTS POINTED OUT IN THE BILLS AND VOUCHERS MAINTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BEYOND SAYING THAT THE ASSESSE E HAS NOT DISCHARGED THE ONUS BY ADDUCING PROPER BILLS AND VOUCHERS IN ANY PROC EEDINGS UNDER THE ACT, AND, THAT, IN ANY EVENT, 10% DISALLOWANCE HAS BEEN ACCEP TED BY THE ASSESSEE BY NOT PURSUING THE CROSS OBJECTION CHALLENGING THE SAME. THIS DISALLOWANCE TAKES CARE OF PARTIAL UNAVAILABILITY OF THE RELATED VOUCHERS. KE EPING IN VIEW ALL THESE FACTORS, IN OUR CONSIDERED VIEW, THE DISALLOWANCE OF RS.1,50,17 0/- NEED NOT BE DISTURBED AT THE 8 ITA NO.22/JAB/2013 & C.O. NO.04/JAB/2013 A.Y. 2008-09 INSTANCE OF THE ASSESSING OFFICER. WE APPROVE AND CONFIRM HIS ACTION AND DECLINE TO INTERFERE IN THE MATTER. 11. GROUND NO.1(III) IS ALSO DISMISSED. 12. TO SUM UP, THE APPEAL FILED BY THE ASSESSING OF FICER AS ALSO CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON 26 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (C.M. GARG) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 26 TH SEPTEMBER, 2014 PBN/* COPY OF THE ORDER FORWARDED TO :- 1) APPELLANT 2) RESPONDENT 3) CIT (APPEALS) CONCERNED 4) CIT CONCERNED 5) D.R., ITAT, JABALPUR BENCH, JABALPUR 6) GUARD FILE. BY ORDER, ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, JABALPUR