DCIT, Circle - 51, Kolkata, Kolkata V. M/s. Balaji Infrastructures & Projects, Kolkata

ITA 1107/KOL/2011

• Counselvise Citation: 110723514 RSA 2011
• Duration Of Justice: 2 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 23-08-2011
• Court: TRIBUNAL
• Department Lawyers: USMANI JCITLD
• Assessee Lawyers: S JHAJHARIA FCA LD
• Keywords: Principle of natural justice; Additional evidence
• Section: 194C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH: KO LKATA ( ) , 1 , BEFORE HONBLE SRI SHAMIM YAHYA, AM & HONBLE SRI GEORGE MATHAN, JM $ / ITA NO.1107/KOL/2011 A.Y 2007-08 D.C.I.T, CIRCLE-51, KOLKATA % % - VERSUS - . M/S. BALAJI INFRASTRUCTURES & PROJECTS PAN: AA HFB 2767L ( ' / APPELLANT ) ( )*' / RESPONDENT ) C.O NO. 51/KOL/2011 [ IN ITA NO. 1107/KOL/2011] A. Y 2007-08 M/S. BALAJI INFRASTRUCTURES & PROJECTS PAN: AAHFB 2767L % % - VERSUS - . D.C.I.T, CIRCLE-51, KOLKATA % - VERSUS ( ' / APPELLANT ) ( )*' / RESPONDENT ) ' / FOR THE APPELLANT/DEPARTMENT /SHRI S.H. USMANI, JCIT/LD.SR.DR )*' / FOR THE RESPONDENT/ASSESSEE: / SHRI S.JHAJHARIA, FCA, LD.AR / 0 /DATE OF HEARING: 26-06-2014 / 0 /DATE OF PRONOUNCEMENT: 27-06--2014 / ORDER 1 , SHRI GEORGE MATHAN, JUDICIAL MEMBER ITA NO. 1107/KOL/2011 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), XXXII, KOLKATA IN APPEAL NO. 93/CIT(A)-XXXII/09-10/CIR-51/KOL DATED 28.03.2011 FOR THE ASSESSMENT YEAR 2007- 08 AND THE C.O NO. 51/KOL/2011 IS A CROSS OBJECTI ON FILED BY THE ASSESSEE IN THE REVENUES APPEAL IN ITA NO. 1107/KOL/2011 FOR TH E ASSESSMENT YEAR 2007-08. 2. SHRI S.H. USMANI, LEARNED JCIT/SR.DR REPRESENTE D ON BEHALF OF THE REVENUE AND SHRI SIDDHARTHA JHAJHARIA, FCA, LEARNED AR REPRE SENTED ON BEHALF OF THE ASSESSEE. ITA NO. 1107/KOL/2011 & CO. NO.51/KOL/2011- M/S. B ALAJI INFFRASTRUCURES & PROJECTS-C-JM . 2 ITA NO.1107/KOL/2011 A.Y 2007-08 (BY THE REVENUE) 3. IN THE REVENUES APPEAL, THE REVENUE HAS RAISED FOLLOWING REVISED GROUNDS OF APPEAL:- 1) ON THE FACTS & CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) KOLKATA HAS ERRED IN ACCEPTING THE ADDITIONAL GROU ND OF APPEAL WHICH HE WAS PREVENTED FROM ACCEPTING AS PER RULE 46A OF THE I.T RULE, 1962. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. C IT(A), KOLKATA HAS ERRED IN DELETING THE ADDITION MADE U/ S. 40(A)(IA) OF THE I.T ACT, 1961 ON THE PAYMENT OF LABOUR CHARGES MADE TO THE LABOUR SARDARS WITHOUT DEDUCTING THE TDS U/S. 194C OF THE I.T ACT, WHEREAS, THE PAYMENT WAS OF THE NATURE OF SUB-CONTR ACT. C.O NO. 51/KOL/2011 ARISING OUT OF ITA NO.1107/KOL /2011 FOR THE A.Y 2007- 08(BY THE ASSESSEE) 4. AT THE TIME OF HEARING BEFORE US THE LEARNED AR FOR THE ASSESSEE HAS SUBMITTED THAT HE DID NOT WISH TO PRESS THE CROSS OBJECTION F ILED BY THE ASSESSEE. CONSEQUENTLY, THE SAME STANDS DISMISSED AS NOT PRESSED. ITA NO.1107/KOL/2011 A.Y 2007-08 (BY THE REVENUE) 5. AT THE TIME OF HEARING BEFORE US, IT WAS SUBMIT TED BY THE LEARNED JCIT/SRDR THAT IN RESPECT OF GROUND NO.1 OF REVENUES APPEAL THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAD ADMITTED THE ADDITIONAL EVIDENCE IN THE FORM OF LABOUR REGISTER. IT WAS SUBMITTED THAT THE ASSESSEE IS A PARTNERSHIP FIRM, WHO IS DOING THE BUSINESS OF CONSTRUCTION OF BUILDING. IT WAS THE S UBMISSION THAT IN THE COURSE OF ASSESSMENT, IT WAS NOTICED THAT THE ASSESSEE HAD MA DE PAYMENTS TOWARDS LABOUR SUPPLY WITHOUT DEDUCTING THE TAX AS PER PROVISIONS OF CHAPTER XIVB OF THE I.T ACT, 1961. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD S TATED THAT THE PAYMENTS HAD BEEN MADE TO SARDAR(S) OF LABOURS, WHO WERE THEMSELVES L ABOURERS AND NOT CONTRACTORS OR SUB- CONTRACTORS. THE STATEMENTS OF THE LABOUR SA RDARS HAD ALSO BEEN RECORDED. IT WAS THE SUBMISSION THAT THE AO CONSEQUENTLY HELD T HE SARDARS AS LABOUR CONTRACTORS AND ON THAT GROUND NO INDIVIDUAL PAYMENT WAS MADE AS ALSO NO TDS HAVE BEEN MADE, HE INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF T HE ACT AND DISALLOWED THE LABOUR PAYMENTS MADE BY THE ASSESSEE. IT WAS THE SUBMISSI ON THAT THE LEARNED COMMISSIONER ITA NO. 1107/KOL/2011 & CO. NO.51/KOL/2011- M/S. B ALAJI INFFRASTRUCURES & PROJECTS-C-JM . 3 OF INCOME-TAX (APPEALS) HAD ADMITTED THE ADDITIONAL EVIDENCE AND HAD DELETED THE DISALLOWANCE AGAINST WHICH THE REVENUE HAS FILED TH E APPEAL, WHEREIN MERITS OF DELETION OF ADDITION/DISALLOWANCE WERE CHALLENGED I N GROUND NO.2 OF THE REVENUES APPEAL. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ON THIS ISSUE WAS LIABLE TO BE REVERSED AND THAT OF THE AO BE RESTORED. 6. IN REPLY, THE LEARNED AR FOR THE ASSESSEE HAS V EHEMENTLY SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). IT WAS THE SUBMISSION THAT THE LABOUR REGISTER WAS PRODUCED BEFORE THE LEARNED COM MISSIONER OF INCOME-TAX (APPEALS), WHO HAD GIVEN REASONS FOR ADMITTING THE SAME UNDER RULE 46A OF THE I.T RULES 1962. IT WAS THE SUBMISSION THAT AFTER ADMIT TING THE LABOUR REGISTER THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAD CALLED FOR REMAND REPORT FROM THE AO. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) AF TER CONSIDERING THE REMAND REPORT PROVIDED BY THE AO AS ALSO THE LABOUR REGIST ER PRODUCED BY THE ASSESSEE AND THE STATEMENTS RECORDED FROM THE LABOUR SARDARS B Y THE AO DELETED THE DISALLOWANCE. THE LEARNED AR FOR THE ASSESSEE DREW OUR ATTENTION TO PARA 5.9 OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) MORE SPECIFIC ALLY AT PARA 4.9 PAGES 9-10 SHOWS THAT THE LEARNED COMMISSIONER OF INCOME-TAX ( APPEALS) HAS GIVEN HIS REASONS FOR ADMITTING THE ADDITIONAL EVIDENCE REPRESENTING THE LABOUR REGISTER. FURTHER, A PERUSAL OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) SHOWS THAT AFTER ADMITTING THE LABOUR REGISTER THE LEARNED COM MISSIONER OF INCOME-TAX (APPEALS) HAS SENT THE EVIDENCE TO THE AO FOR HIS REMAND REPO RT. NOTHING HAS BEEN MENTIONED BY THE AO IN RESPECT OF THE LABOUR REGISTER IN HIS REM AND REPORT. THE AO IS ONLY OBJECTING TO THE ADMISSION OF THE ADDITIONAL EVIDEN CE. THE EXISTENCE OF THE PROVISIONS OF RULE 46A OF THE I.T RULES 1962 IN FACT, SHOWS TH AT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS ENTITLED TO ADMIT THE AD DITIONAL EVIDENCE, PROVIDED THE ASSESSEE IS ABLE TO JUSTIFY THE NON-PRODUCTION OF T HE SAME BEFORE THE AO. A PERUSAL OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) CLEARLY SHOWS THAT HE HAS COMPLIED WITH ALL THE CONDITIONS REQUIRED UNDER RULE 46A OF THE I.T RULES 1962 ITA NO. 1107/KOL/2011 & CO. NO.51/KOL/2011- M/S. B ALAJI INFFRASTRUCURES & PROJECTS-C-JM . 4 BEFORE ADMISSION OF THE ADDITIONAL EVIDENCE AND H AS ALSO FOLLOWED THE PRINCIPLE OF NATURAL JUSTICE IN CALLING FOR REMAND REPORT FROM THE AO IN RESPECT OF ADDITIONAL EVIDENCE. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT GROUND NO.1 OF THE REVENUES APPEAL NO MORE SURVIVES AND CONSEQUENTLY, SAME IS DISMISSED. 8. IN RESPECT OF THE MERITS OF THE CASE, IT IS NOT ICED THAT THE AO HAS RECORDED THE STATEMENTS OF THE LABOUR SARDARS AND IN THEIR DEPO SITIONS THE LABOUR SARDARS HAVE SPECIFICALLY ADMITTED HAVING RECEIVED THE PAYMENTS FROM THE ASSESSEE FOR PAYMENT TO OTHER LABOURERS AND THAT LABOUR SARDARS THEMSELVES WERE ALSO WORKING FOR THE ASSESSEE. FURTHER, A PERUSAL OF THE ORDER OF THE LEARNED COM MISSIONER OF INCOME-TAX (APPEALS) CLEARLY SHOWS THAT THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS) HAS TAKEN INTO CONSIDERATION THE FACT THAT THE LABOUR REGISTER PR ODUCED BY THE ASSESSEE CLEARLY SHOWS THAT THE PAYMENTS HAVE BEEN MADE TO THE LABOURERS I NDIVIDUALLY. JUST BECAUSE THE PAYMENTS WERE MADE THROUGH LABOUR SARDARS TO THE LA BOURERS INDIVIDUALLY, IT CANNOT BE HELD THAT THE LABOUR SARDARS ARE CONTRACTORS OR SU B-CONTRACTORS. FURTHER, A PERUSAL OF THE COPY OF THE LABOUR REGISTER CLEARLY SHOWS THAT NO PAYMENT IN EXCESS OF THE PRESCRIBED LIMIT HAS ALSO BEEN MADE, WHICH ENTAILS THE REQUIREMENT OF THE DEDUCTION OF TDS U/S. 194C OF THE I.T ACT 1961. IN THE CIRCUMST ANCES, WE ARE OF THE VIEW THAT THE FINDING OF THE LEARNED COMMISSIONER OF INCOME-TAX ( APPEALS) ON THIS ISSUE IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. WE UPHOLD THE SAME. CONSEQUENTLY, THE GROUND NO.2 OF THE REVENUES APPEAL STANDS DISMISSE D. 9. IN THE RESULT, THE REVENUES APPEAL IN ITA NO. 1107/KOL/2011 AND CROSS OBJECTION OF THE ASSESSEE IN C.O NO.51/KOL/2011 FOR THE ASSESSMENT YEAR 2007-08 BOTH ARE DISMISSED AS STATED ABOVE. 4 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 27/0 6/2014 SD/- SD/- ( , ) (SHAMIM YAHYA, ACCOUNTANT MEMBER) ( 1 , ) (GEORGE MATHAN, JUDICIAL MEMBER) ( (( ( 0 0 0 0 ) )) ) DATE 27/06/2014 ITA NO. 1107/KOL/2011 & CO. NO.51/KOL/2011- M/S. B ALAJI INFFRASTRUCURES & PROJECTS-C-JM . 5 ** PRADIP SPS / )7 87 / COPY OF THE ORDER FORWARDED TO: 1. . ' / THE APPELLANT : D.C.I.T CIRCLE-51, BLOCK-DS-2 & 3, MANICKTALA CIVIC CENTRE, UTTARAPAN, KOL-54.. 2 )*' / THE RESPONDENT- M/S.BALAJI INFRASTRUCTURES & P ROJECTS, CJ-276, SECTOR II, SALT LAKE CITY, KOL - 91 3. 4. . / THE CIT, ( )/ THE CIT(A) 5 . ) / DR, KOLKATA BENCH 6 . GUARD FILE . *7 )/ TRUE COPY, / BY ORDER, / ASSTT REGIST RAR