M/s. Shree Shyamjee Constructions Private Limited, Jharsuguda V. JCIT, Range- 1, Sambalpur

ITA 100/CTK/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1369 (ITAT-CUTTACK)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 21-02-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M K KEDIA
• Keywords: Condonation of delay
• Section: 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M.GARG , JM & SHRI L.P. SAHU, AM (THROUGH : V IRTUAL HEARING ) IT A NO. 100 /CTK/20 20 ( / A SSESSMENT Y EAR : 201 0 - 201 1 ) M/S SHREE SHAYM JI CONSTRUCTION PVT. LTD. AT/PO: BAGDEHI, DISTRICT - JHARSUGUDA, ODISHA VS. JCIT, RANGE - 1, SAMBALPUR PAN NO. : A A JCS 0480 J ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI M.K.KEDIA, AR /REV ENUE BY : SHRI SUBHENDU DATTA , SR. DR / DATE OF HEARING : 11 / 1 2 /20 20 / DATE OF PRONOUNCEMENT : 14 / 1 2 /20 20 / O R D E R PER L.P.SAHU, AM : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT( A), SAMBALPUR , DATED 05 . 11 .201 9 , FOR THE ASSESSMENT YEAR 2010 - 2011. 2 . AS PER THE OFFICE NOTE, THE APPEAL IS BARRED BY 02 DAYS. IN THIS REGARD, THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY ALONG WITH AFFIDAVIT EXPLAINING THE DELAY IN FILI NG THE APPEAL, TO WHICH THE LD. DR DID NOT OBJECT. WE HAVE CONSIDERED THE APPLICATION ALONG WITH THE AFFIDAVIT FILED BY THE ASSESSEE AND FOUND THAT THERE IS SUFFICIENT CAUSE HAS BEEN EXPLAINED BY THE ASSESSEE IN DELAY IN FILING THE APPEAL. ITA NO. 100 /CTK/20 20 2 ACCORDINGLY, WE CONDONE THE DELAY OF 02 DAYS IN FILING THE PRESENT APPEAL AND APPEAL IS HEARD FINALLY. 3 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - 1) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED TO DISALLOW 1% OF THE EXPENDITURES AMOUNTING 'TO RS.2,97,283/ - UNDER THE HEAD PURCHASE OF MOORUM, SAND AND TRANSPORTATION CHARGES SIMPLY BECAUSE THE PAYMENTS OF SUCH EXPENSES - ARE NECESSARILY BEEN MADE IN CASH THROUGH SELF MADE VOUCHERS. 2) THAT THE ASSESSEE IS A CON TRACTOR AND UNDERTAKES VARIOUS TYPES OF WORKS. IN SUCH TYPE OF BUSINESS WHERE SAND, RNURRUM ETC. ARE PURCHASED FROM THE LOCAL VILLAGE TYPE VENDORS AND THE TRANSPORTATION CHARGES IS PAID TO LOCAL TRUCK AND TRACTORS, DISALLOWANCE ON THIS COUNT WITHOUT ANY CO NTRARY FINDINGS OF INFLATING OF THE EXPENSES IS WRONG, ARBITRARY AND ILLEGAL. 3) THAT INITIATION OF PENALTY U/S 271(L)(C) IS WRONG AND ILLEGAL SINCE NEITHER THE ASSESSEE HAS CONCEALED ANY PARTICULARS OF ITS INCOME NOR HAS FURNISHED ANY INACCURATE PART ICULARS OF HIS INCOME. THE DISALLOWANCE IS AN ADHOC DISALLOWANCE MADE BY THE LAO. 4) THAT OTHER GROUND OR GROUNDS, IF ANY SHALL BE URGED AT THE TIME OF HEARING. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CONTRACTOR FOR CONSTRUCTION BUSINES S. THE TOTAL TURNOVER OF THE ASSESSEE FOR THE A.Y.2010 - 2011 IS RS.28,89,35,015/ - AND NET PROFIT DISCLOSED AT RS.1,00,66,066/ - , WHICH IS 3.4% OF THE TOTAL TURNOVER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAS MADE PURC HASE OF MOORUM OF RS.1,50,30,500/ - , SAND OF RS.1,28,58,750/ - AND TRANSPORTATION OF RS.18,39,062/ - . IT WAS ALSO OBSERVED BY THE AO THAT PAYMENTS ARE MADE IN CASH FOR PURCHASE OF THESE ITEMS WHICH ARE INCLUDED IN THE PURCHASE AND EXPENSES . SINCE THE ASSESSEE COULD NOT PRODUCE REGULAR BOOKS OF ACCOUNTS AND BILLS AND ITA NO. 100 /CTK/20 20 3 VOUCHERS BEFORE THE AO, THEREFORE, THE AO DISALLOWED THE SAME AND MADE ADDITION OF 1% OF THESE ITEMS AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE AMOUNTING TO RS.2,97,283/ - [1% OF2,97,28,302/ - (1, 50,30,500 +1,28,58,750 + 18,30,062)]. 5. FEELING AGGRIEVED FROM THE ORDER OF AO, THE ASSESSEE APPEALED BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CONFIRMED THE ORDER OF AO. 6. FEELING FURTHER AGGRIEVED BY THE ORDER O F CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL. 7. LD. AR BEFORE US SUBMITTED THAT THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNTS WHICH HAS BEEN AUDITED BY A CHARTERED ACCOUNTANT AND NO ANY DEFECTS HAVE BEEN POINTED OUT BY THE AO . THE AO HAS DISALLOWED 1% ON THE THREE ITEMS I.E. MOORUM, SAND AND TRANSPORTATION WHICH ARE INCLUDED IN THE PURCHASE AND EXPENSES WITHOUT POINTING OUT ANY SPECIFIC DEFECTS IN WHICH VOUCHERS ARE NOT AVAILABLE. LD.AR TO SUPPORT HIS CONTENTIONS, RE LIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. AMITBHAI GUNVANTBHAI [1981] 129 ITR 573 (GUJ.) 8. ON THE OTHER HAND, LD. SR. DR RELIED ON THE ORDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT BILLS AND VOUCHERS ARE NOT AVAILABLE F OR THE VERIFICATION BEFORE THE AO , THEREFORE, THE AO AND CIT(A) BOTH ARE JUSTIFIED EVEN THE ASSESSEE HAD OPPORTUNITY TO PRODUCE THE SAME BEFORE ITA NO. 100 /CTK/20 20 4 THE CIT(A), HOWEVER, HE DID NOT DO SO. HE FURTHER SUBMITTED THAT THE CASE LAW RELIED ON BY THE LD. AR OF THE ASS ESSEE IS NOT APPLICABLE IN THE PRESENT FACTS OF THE CASE BECAUSE THE ASSESSEE DID NOT PRODUCE ANY VOUCHERS REGARDING THE SAME AS POINTED OUT BY THE AO. 9. AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD, WE FIND FROM THE A SSESSMENT ORDER THAT THE AO HAS MADE AD - HOC ADDITION OF 1% ON THE THREE ITEMS MAINLY, MOORUM, SAND AND THE TRANSACTION WHICH ARE INCLUDED UNDER THE HEAD PURCHASE AND EXPENSES, TOTALING TO RS.2,97,283/ - FOR WANT OF BILLS AND VOUCHERS WHICH WERE NOT PRODUCED BY THE ASSESSEE FOR THE VERIFICATION BEFORE THE AO AND THIS ISSUE HAS RIGHTLY BEEN DEALT BY THE CIT(A). THE OBSERVATIONS OF THE CIT(A) IN THIS REGARD ARE AS UNDER : - 6. I HAVE CAREFULLY EXAMINED THE ASSESSMENT ORDER AND SUBMISSION OF THE APPELLANT. IT IS IMPORTANT TO NOTE HERE THAT THE APPELLANT'S TURNOVER FOR THE YCAR UNDER CONSIDERATION IS NEARLY RS. 29 CRORES AND THE PURCHASE OF MURRAIN AND SAND IS MORE THAN 1.5 CRORE AND 1.25 CRORE RESPECTIVELY. SIMILARLY, THE TRANSPORTATION EXPENSES ARE OF NEARLY 20 L AKHS. THE APPELLANT HAS ADMITTED THAT THESE THREE EXPENSES HAVE BEEN CLAIMED ON THE BASIS OF SELF MADE VOUCHERS AND THE PAYMENTS HAVE BEEN MADE IN CASH. IT IS A SETTLED PRINCIPLE THAT THE PERSON WHO IS CLAIMING THE EXPENSES HAS TO SUBMIT EVIDENCE OF THE SA ID EXPENDITURE TO THE SATISFACTION OF THE ASSESSING AUTHORITY. IN THIS CASE, THE ASSESSING OFFICER IS NOT SATISFIED BY THE QUALITY OF THE EVIDENCE SUBMITTED BY THE APPELLANT, MORE SO, WHEN SUCH HUGE EXPENSES HAVE BEEN CLAIMED ON THE BASIS OF S ELFMADE /HANDM ADE VOUCHERS. FURTHER, THE APPELLANT COULD HAVE EASILY MADE THE PAYMENTS BY THE BANK DRAFT WHICH HAS NOT BEEN DONE BY THE APPELLANT. THE CLAIM THAT THE WORK TOOK PLACE IN THE RURAL AREAS AND THEREFORE THE EXPENSES HAVE BEEN CLAIMED ON HAND MADE VOUCHERS AN D PAYMENTS HAVE BEEN MADE IN CASH IS SELF - SERVING. THE DECISION RELIED UPON BY THE APPELLANT IS NOT APPLICABLE AS THE ASSESSING OFFICER HAS DOUBTED THE VERACITY OF THE TRANSACTIONS. FURTHER, THE ASSESSING HAS DISALLOWED SPECIFIC EXPENSES AND THAT TOO @1% W HICH IS NOT UNREASONABLE. CONSIDERING THESE ASPECTS THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.2,97,283/ - IS CONFIRMED AND THE GROUNDS OF APPEAL ARE DISMISSED. ITA NO. 100 /CTK/20 20 5 ON PERUSAL OF THE ABOVE OBSERVATIONS OF THE CIT(A) AS WELL AS THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ABOVE FINDINGS OF THE CIT(A) IN THIS REGARD. IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE CASE LAW RELIED ON BY THE LD. AR OF THE ASSESSEE IS NOT APPLICABLE IN THE PRESENT CASE IN HAND BECAUSE THE ASSESSEE HAS NOT PRODUCED ANY BILLS AND VOUCHERS IN SUPPORT OF HIS CLAIM BEFORE THE AO. ACCORDINGLY, WE UPHELD THE ORDER OF THE CIT(A) DISMISS THE APPEAL OF THE ASSESSEE. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCE D IN THE OPEN COURT ON 14 / 12 / 20 20 . SD/ - (C.M.GARG) SD/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 14 / 12 /20 20 PRAKASH KUMAR MISHRA, SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , /ITAT, CUTTACK 1. / THE APPELLANT - M/S SHREE SHAYMJI CONSTRUCTION PVT. LTD. AT/PO: BAGDEHI, DISTRICT - JHARSUGUDA, ODISHA 2. / THE RESPONDENT - JCIT, RANGE - 1, SAMBALPUR 3. ( ) / THE C IT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//