ITO, Ward - 33(2), Kolkata, Kolkata V. M/s. Cosmopolitan Engineers & Architects, Kolkata

ITA 1136/KOL/2010

• Counselvise Citation: 113623514 RSA 2010
• Duration Of Justice: 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 04-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Assessee Lawyers: VIGYANESHWAR NATH DATTA
• Keywords: Additional evidence
• Section: 194C

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA () . . , , ! . .. .'# '#'# '#. .. . , , , , $% , ,, , [BEFORE HONBLE SRI B. R. MITTA L, JM & HONBLE SRI C. D. RAO, AM] !& / I.T.A NO. 1136/KOL/2010 '( )*/ ASSESSMENT YEAR : 2007-08 INCOME TAX OFFICER/WARD-33(2) -VS.- M/S. COSMOPOLITAN ENGINEERS & ARCHITECTS KOLKATA. KOLKATA [PAN : AACFC 1537 C] (,- /APPELLANT ) (./,-/ RESPONDENT ) ,- / FOR THE APPELLANT : 0 /SHRI P K. MISHRA, SR. D.R. ./,- / FOR THE RESPONDENT : 0 / SHRI VIGYANESHWAR NATH DATTA $1 /O R D E R [ . . , ] PER B. R. MITTAL, J. M. THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2007-08 AGAINST ORDER OF LD. CIT(A)-XX, KOLKATA DATED 31.03.2010 ON THE FOLLOWIN G GROUNDS :- (1) LD. CIT(A), IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, ERRED IN THE FACT AND IN LAW, IN DELETING THE ADDITION MADE U/S. 40(A )(IA) OF RS.8930538/- IN RESPECT OF EXPENSES BOOKED UNDER THE HEAD LABOU R CHARGES INCURRED ON CERTAIN NAMED PARTIES AS FOUND FROM THEIR INDIVI DUAL LEDGERS. (2) LD. CIT(A), IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, ERRED IN THE FACT AND IN LAW, BY ADMITTING IN VIOLATION OF RULE 46A O F THE IT RULES, FRESH EVIDENCE IN THE FORM OF MUSTER ROLLS & WAGES REGIST ER NOT PRODUCED BEFORE THE AO AND NOT MENTIONED IN THE FORM 3CD COL . 9. (3) LD. CIT(A), IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, ERRED IN THE FACT AND IN LAW IN NOT CONSIDERING THAT THE RELEVANT PAR TIES WERE LABOUR CONTRACTORS AS SEEN FROM BOOKS OF ACCOUNT AND DOCUM ENTS PRODUCED IN THE COURSE OF ASSESSMENT PROCEEDINGS AND FROM ASSES SMENT RECORDS OF THE CASE. (4) LD. CIT(A), ERRED IN THE FACT AND IN LAW, IN ALLOWI NG THE ASSESSEES CONTENTIONS IN THE FACE OF INAPPLICABILITY OF THE R ATIO OF 248 ITR 216 AND 163 ITR 702 TO THE FACTS AND CIRCUMSTANCES OF THE C ASE. ITA NO. 1136/KOL/20 10 2 2. THE RELEVANT FACTS GIVING RISE BY THIS APPEAL TH AT ASSESSEE DECLARED CONTRACT RECEIPT OF RS.1,46,99,030/- FROM HINDUSTHAN STEEL WORKS LTD., EASTERN RAILWAY, METRO RAILWAY AND RS.62,59,200/- ON FLAT ACCOUNT. ASSESSING OFFICER O BSERVED THAT ASSESSEE MADE PAYMENTS AGGREGATING RS.89,30,538/- REPRESENTING LABOUR CHAR GES. IT WAS INCURRED ON LABOUR CONTRACTORS AND THE DETAILS OF WHICH ARE GIVEN BY ASSESSING OFF ICER AT PAGES 1 & 2 OF ASSESSMENT ORDER. ASSESSING OFFICER HAS STATED THAT ASSESSEE WAS ASKE D AS TO WHY THE ABOVE AMOUNT AGGREGATING RS.89,30,538/- SHOULD NOT BE ADDED BACK U/S. 40(A)( IA) OF THE ACT OWING TO NON-DEDUCTION OF TDS. 2. ON BEHALF OF THE ASSESSEE, IT WAS CONTENDED THAT THE SAID PAYMENTS WERE MADE TO TEMPORARY LABOURERS AND THAT THEY HAVE NO PERMANENT ADDRESS OF THEIR OWN. HOWEVER, ASSESSING OFFICER STATED THAT EXPENSES BOOKED AND PAYMENTS MA DE REPRESENTED PAYMENTS TO LABOUR CONTRACTORS ENGAGED AT SITE WHERE ASSESSEE HAD DONE CONTRACTUAL WORK FOR ITS CONTRACTEES. ASSESSING OFFICER HAS STATED THAT IF THE PERSONS DI D NOT HAVE ANY PERMANENT ADDRESS, IT WAS ALL THE MORE REASONS FOR DEDUCTING TDS SINCE NON-DEDUCT ION OF TAX ON THEIR INCOME WILL IRREVOCABLE LOSS OF REVENUE, ON THEIR NOT BEING TRACEABLE. HENC E, ASSESSING OFFICER ADDED BACK OF RS.89,30,538/- U/S. 40(A)(IA) OF THE ACT. BEING AGG RIEVED, ASSESSEE FILED APPEAL BEFORE LD. CIT(A). 3. ON BEHALF OF ASSESSEE, IT WAS CONTENDED THAT THE SAID LABOUR CHARGES WERE PAID TO LABOURERS UNDER DIFFERENT LEADERSHIPS AND CONFIRMIN G PARTIES, KNOWN AS LABOUR SARDAR, BUT THEY ARE NOT LABOUR CONTRACTORS. THAT, THE ASSESSEE ENGA GED TEMPORARY LABOURERS, WHO WERE MOBILIZED FROM REMOTE AREAS OF DIFFERENT DISTRICTS. SINCE SUC H LABOURERS ARE STRANGERS AND HAVE NO PERMANENT RESIDENCE, LABOUR SARDARS ACTING AS CONFI RMING PARTY TO THE PAYMENTS MADE TO INDIVIDUAL LABOURERS. HOWEVER, ASSESSEE MAINTAINED MUSTER ROLLS AND WAGE REGISTERS FOR THE PAYMENTS MADE TO INDIVIDUAL LABOURERS AND THE SAID LABOUR SARDAR IS ALSO ENGAGED AS LABOURER. ON BEHALF OF ASSESSEE, IT WAS CONTENDED THAT LABOUR SARDAR CANNOT BE TREATED AS LABOUR CONTRACTORS. IT WAS ALSO CONTENDED THAT THERE WERE NO CONTRACT BETWEEN ASSESSEE AND SAID CONTRACTOR AND HENCE, PROVISIONS OF SECTION 194C HA VE NO APPLICATION AS THE PAYMENTS WERE MADE TO EACH AND INDIVIDUAL LABOURERS WITH THE ASSI STANCE OF LABOUR SARDARS TO WHOM THE LABOURERS OF A PARTICULAR AREA TO CHOSE TO ACT AS T HEIR LEADER SARDAR. ITA NO. 1136/KOL/20 10 3 4. THAT, LD. CIT(A) AFTER CONSIDERING THE SUBMISSIO NS OF ASSESSEE AND ALSO THE DECISION OF I.T.AT. IN THE CASE OF M/S. SAMANWAYA VS. ACIT [200 9] 34 SOT 332, HELD THAT THE IMPUGNED DISALLOWANCE OF RS.89,30,538/- IS BEYOND THE SCOPE AND AMBIT OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND ACCORDINGLY, DELETED THE SAME. HENCE , DEPARTMENT IS IN APPEAL BEFORE TRIBUNAL. 5. ON BEHALF OF THE DEPARTMENT, LD. DEPARTMENTAL RE PRESENTATIVE SUPPORTED THE ORDER OF ASSESSING OFFICER. HE SUBMITTED THAT LD. CIT(A) HAS ACCEPTED CONTENTION OF ASSESSEE AND DELETED THE ADDITION MADE BY ASSESSING OFFICER. HE FURTHER SUBMITTED THAT ASSESSEE DID NOT FILE WAGE REGISTERS AND MUSTER ROLLS BEFORE ASSESSING OF FICER TO ESTABLISH THAT PAYMENTS WERE MADE TO INDIVIDUAL LABOURERS. LD. DEPARTMENTAL REPR ESENTATIVE SUBMITTED THAT LD. CIT(A) CONSIDERED THE ADDITIONAL EVIDENCES AND DELETED THE ADDITIONS MADE BY ASSESSING OFFICER, WITHOUT SEEKING REMAND REPORT FROM HIM. HE SUBMITTE D THAT LD. CIT(A) ADMITTED ADDITIONAL EVIDENCES IN VIOLATION OF RULE 46A OF INCOME TAX RU LES. 6. ON THE OTHER HAND, LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE MADE HIS SUBMISSION ON THE LINES OF PAYMENTS MADE BEFORE LD. CIT(A). HE FURTHER SUBMITTED THAT ASSESSING OFFICER DID NOT ASK FOR REGISTER OF LABOURERS. HE SUBMITTED THAT ASSESSEE HAS FILED SOME COPIES OF WAGE REGISTERS AND MUSTER ROLLS TO PROVE THAT ASSESSEE W AS MAINTAINING THE SAME AND PAYMENTS WERE MADE TO INDIVIDUAL LABOURERS UNDER THE LEADERSHIP O F LABOUR SARDAR, WHO ACTED AS CONFIRMING PARTY. HE SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO ASSESSING OFFICER AND ASSESSEE WILL FURNISH ALL THE REQUISITE DETAILS TO ESTABLISH THAT PAYMENTS WERE MADE TO INDIVIDUAL LABOURERS AND THE SO CALLED SARDAR, WHO ACTED ONLY AS A CONFIRMING PARTY FOR THE PAYMENT MADE TO EACH OF THEM. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF LD. REPRESENTATIVES OF THE PARTIES AND ORDERS OF THE AUTHORITIES BELOW. WE OBSERVE THAT AS SESSEE HAS FILED COPIES OF MUSTER ROLLS AND WAGE REGISTERS EVIDENCING THAT PAYMENTS WERE MADE T O INDIVIDUAL LABOURERS AND THE SO CALLED LABOUR SARDARS ACTED AS CONFIRMING PARTIES FOR THE PAYMENTS MADE. IT IS A FACT THAT THE SAID DETAILS WERE PLACED BEFORE THE LD. CIT(A) AND NOT B EFORE THE ASSESSING OFFICER, AS ALSO CONCEDED BY LD. AUTHORISED REPRESENTATIVE FOR THE A SSESSEE DURING HIS SUBMISSION. BE THAT, AS IT MAY, WE CONSIDER IT PRUDENT, IN THE INTEREST OF JUS TICE, TO RESTORE THIS ISSUE TO THE FILE OF ASSESSIN G OFFICER WITH A DIRECTION THAT HE WILL DECIDE IT AFR ESH AFTER GIVING DUE OPPORTUNITY OF HEARING TO ITA NO. 1136/KOL/20 10 4 ASSESSEE AND CONSIDER SUCH EVIDENCES AS MAY BE FILE D BEFORE HIM. HENCE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW BY RESTORING IT TO THE FIL E OF ASSESSING OFFICER WITH A DIRECTION TO DECIDE IT AFRESH AFTER GIVING DUE OPPORTUNITY OF HEARING A ND CONSIDER SUCH DOCUMENTS OR EVIDENCES AS MAY BE FILED BEFORE HIM. HENCE GROUNDS OF APPEAL TA KEN BY REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 4 $1 %5$ 6 5' 7 48 #% ORDER PRONOUNCED IN THE OPEN COURT ON 04. 04. 2011 SD/- SD/- [ . '# '#'# '# . , $% ] [ . . , ] [ C. D. RAO ] [ B. R. MITTAL ] ACCOUNTANT MEMBER JUDICIAL MEMBER #% / DATED : 4TH APRIL, 2010. $1 9 .: ;$:)< - COPY OF THE ORDER FORWARDED TO: 1. $ /APPLICANT- INCOME TAX OFFICER, WARD-33(2), 10B, MIDDLETON ROW, 3 RD FLOOR, KOLKATA-700 071. 2 ./,- / RESPONDENT : M/S. COSMOPOLITAN ENGINEERS & ARCHIT ECTS, 28/1G, HAREKRISHNA SETH LANE, KOLKATA.-700 050. 3. 1' / CIT 4. 1' ( )/ CIT(A) 5. =7 .' / DR, KOLKATA BENCHES, KOLKATA [ /: . / TRUE COPY] $1'5 / BY ORDER > / !? /DEPUTY/ASSTT. REGISTRAR . [KKC @A 'B? C /SR.PS]