Mukund Jaishankar Dhariya, Pune V. Asst. Comm. of Income-tax, Circle-3, Pune

ITA 1106/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9700 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 02-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Assessee Lawyers: S A GUNDECHA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER I.T.A. NO. 1106 AND 1411/PN/2011 A.Y. 2007-08 AND 2008-09 MUKUND JAISHANKAR DHARIYA PLOT NO. 43, INDU NIVAS SHIVAJI NAGAR HOUSING SOCIETY SHIVAJINAGAR, PUNE-411 016 PAN AAPDD 5665 F APPELLANT VS. ASSTT. CIT CIR. 3, PUNE RESPONDENT APPELLANT BY: SHRI S.A. GUNDECHA DEPARTMENT BY : SHRI S.K. SINGH ORDER PER G.S. PANNU, AM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) II PUNE DA TED 5-7-2011 AND 12-10-2011, WHICH, IN TURN HAVE ARISEN FROM ORDERS PASSED BY THE ASSTT. CIT CIR. 3, PUNE U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) DATED 23-12-2009 AND 24-12-2010 PERTAINING TO THE ASSESSMENT YEAR 2007-08 AND 2008-09 RESPECTIVELY. 2. SINCE THE GROUNDS RAISED IN BOTH THESE APPEALS A RE IDENTICAL, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY T HIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE GROUNDS RAISED READ AS FOLLOWS: 1. THE LEARNED CIT(A)II PUNE, OUGHT TO HAVE SET AS IDE THE DISALLOWANCE, IN RESPECT OF EXPENDITURE INCURRED BY THE APPELLANT ON LABOUR CHARGES, EXCAVATION, BLASTING C HARGES, ETC., TOTALLY AND OUGHT TO HAVE ALLOWED THE APPEAL OF THE APPELLANT INSTEAD OF PARTLY ALLOWING THE SAME. 2. THE CIT(A) OUGHT TO HAVE APPRECIATED THAT, CONSI DERING THE NATURE OF BUSINESS, NATURE OF EXPENDITURE, LOCATION OF BUSINESS, NO THIRD PARTY EVIDENCE CAN BE EXPECTED T O BE AVAILABLE AND, THEREFORE, THE A.OS REASONING WAS N OT TENABLE. PAGE 2 OF 3 ITA NO. 1106 AND 1444/PN/2011 MUKUND JAISHANKAR DHARIYA A.Y. 2007-08 AND 2008-09 3. THE CIT(A) OUGHT TO HAVE HELD THAT THE AMOUNT OF COST INCURRED BY THE APPELLANT UNDER THESE ACCOUNT HEADS IS A TOT ALLY ALLOWABLE EXPENDITURE WHILE CALCULATING THE TAXABLE INCOME OF THE APPELLANT. 3. IT IS COMMON GROUND THAT SIMILAR ISSUES WERE AGI TATED BY THE ASSESSEE IN ITS APPEAL IN ITA NO. 516/PN/2011 FOR A .Y. 2006-07 AND THE TRIBUNAL VIDE ITS ORDER DATED 9 TH AUGUST 2012 HAS DECIDED THE ISSUES BY OBSERVING AS UNDER: 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT (A) AND TH E PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT T HAT THE AUDITORS IN THEIR REPORT IN FORM NO. 3CD HAVE OBSERVED THAT PAYMENT F OR EXPENDITURE DEBITED TO P&L ACCOUNT UNDER THE ACCOUNT HEAD LABOU R CHARGES, EXCAVATION CHARGES AND BLASTING CHARGES, JUNGLE CUT TING CHARGES, CENTRING CHARGES ETC. HAS BEEN MADE ON SELF SUPPORTED VOUCHE RS. SUBSEQUENTLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AUD ITORS HAVE ALSO GIVEN CLARIFICATION WHICH HAS ALREADY BEEN EXTRACTED AT P ARA 3 OF THIS ORDER. WE FIND FORCE IN THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT BECAUSE OF THE NATURE OF THE WORK CARRIED OUT BY TH E ASSESSEE IN THE REMOTE PART OF THE STATE WHERE THE ASSESSEE IS ENGA GED IN CONSTRUCTION ACTIVITIES COMPLETE VOUCHERS FOR LABOUR PAYMENTS CA NNOT BE MAINTAINED. FURTHER THE BOOK RESULTS HAVE ALSO NOT BEEN REJECTE D BY THE AO. 8. WE FIND THE AHMEDABAD BENCH OF THE TRIBUNAL IN T HE CASE OF PRAGATI FASHIONS (SUPRA) HAS HELD THAT WHERE THE VO UCHERS IN RESPECT OF EXPENSES ON CONVEYANCE, AUTO FAIR, TEA-COFFEE, COLD DRINK, WATER EXPENSES ETC. CONTAINED THE DETAILS AS TO THE PERSONS IN REC EIPT OF AMOUNT AND PURPOSES FOR WHICH THE EXPENSES ARE INCURRED, DISAL LOWANCE OUT OF SUCH EXPENSES CANNOT BE MADE ON THE GROUND THAT SUCH VOU CHERS WERE SELF GENERATED SINCE NO PUCCA BILL FOR SUCH EXPENSES IS POSSIBLE. SIMILARLY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF AYUSHAK TI AYURVED PVT. LTD. (SUPRA) HAS HELD THAT WHEN THE ASSESSEE FURNISHED C OMPLETE DETAILS, ADHOC DISALLOWANCE CANNOT BE MADE BY AO AND THEREFO RE, ADDITIONS SUSTAINED BY CIT(A) IN RESPECT OF THE ITEMS OF EXPE NDITURE, NAMELY, CONVEYANCE EXPENSES, TELEPHONE AND POSTAGE EXPENSES , AND LOCAL AND FOREIGN TRAVEL EXPENSES HAD TO BE DELETED. 9. SINCE IN THE INSTANT CASE IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE HAS NOT GIVEN THE FULL DETAILS OF THE REC IPIENTS OF THE LABOUR CHARGES AND CONSIDERING THE FACT THAT THE ASSESSEE IS DOING THE CONTRACT WORK IN THE REMOTE PART OF THE STATE, THEREFORE, ME RELY BECAUSE THE PAYMENTS HAVE BEEN MADE THROUGH SELF MADE VOUCHERS THE SAME IN OUR OPINION CANNOT BE A GROUND FOR MAKING ADHOC DISALLO WANCE. IN THIS VIEW OF THE MATTER WE ARE OF THE CONSIDERED OPINION THAT NO DISALLOWANCE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE IS CALLED F OR. WE ACCORDINGLY SET- ASIDE THE ORDER OF THE CIT(A) AND ALLOW THE GROUNDS RAISED BY THE ASSESSEE. 4. FACTS BEING IDENTICAL, SO FOLLOWING THE AFORESAI D DECISION OF THE TRIBUNAL (SUPRA) , WE SET ASIDE THE ORDERS OF THE CIT(A) AND ALLOW THE GROUNDS RAISED BY THE ASSESSEE FOR THE YEARS UNDER CONSIDERATION. PAGE 3 OF 3 ITA NO. 1106 AND 1444/PN/2011 MUKUND JAISHANKAR DHARIYA A.Y. 2007-08 AND 2008-09 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER 2012. SD/- SD/- (R.S. PADVEKAR) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE DATED THE 17 TH SEPTEMBER 2012. ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-(A)-II PUNE 4. THE CIT- II PUNE 5. THE D.R, B BENCH, PUNE BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE