Hanumant Construction Pvt.Ltd., Chhattisgarh V. The Dy.CIT.,Circle-1(2), Baroda

ITA 1217/AHD/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8658 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Section: 194C

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ./ ITA NO. 1217/AHD/2011 / ASSESSMENT YEAR: 2007-08 HANUMANT CONSTRUCTION P. LTD. GROUND FLOOR, PARWANI COMPLEX NR.CHHATTISGARH CLUB CIVIL LINES, RAIPUR (C.G.) PAN : AABCH 7062 D VS DCIT, CIR.1(2) BARODA. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE(S) BY : SHRI SURENDRA MODIANI REVENUE BY : SHRI DINESH SINGH, SR.DR / DATE OF HEARING : 22/01/2015 / DATE OF PRONOUNCEMENT: 02/02/2015 $%/ O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, BARODA DATED 15.3.2011. 2. THE GROUND NO.1 OF THE APPEAL OF THE ASSESSEE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE AO DISALLOWING THE AMOUNT OF RS.1 3,224/- PAID FOR EMPLOYEE CONTRIBUTION BEYOND THE DUE DATE AS PE R THE PROVISIONS OF SECTION 36(1)(VA) OF THE ACT. THE DI SALLOWANCE OF RS.13,224/- HAS BEEN MADE IN COMPLETE DISREGARD OF THE LAW AND FACTS, DESERVES TO BE ALLOWED. 3. AT THE TIME OF HEARING, AR OF THE ASSESSEE SUBMI TTED THAT HE IS NOT PRESSING GROUND NO.1 OF THE APPEAL, HENCE, THE SAME IS DISMISSED, AS NOT PRESSED. ITA NO.1217/AHD/2011 2 4. THE GROUND NO.2 OF THE APPEAL OF THE ASSESSEE IS AS UNDER: 2. THE LD.CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE FOLLOWING DISALLOWANCES OF EXPENSES AMOUNTING TO RS .36,17,456/- CLAIMED UNDER VARIOUS HEADS FOR WANT OF NON-DEDUCTI ON OF TDS U/S.40(A)(IA) OF THE ACT IN COMPLETE DISREGARD OF T HE FACTS AND MATERIAL AVAILABLE ON RECORD. I) FREIGHT EXPENSES RS.56,500/- II) ROAD & PITCHING WORK EXPENSES RS.24,95,310/- III) DRILLING & GROUTING RS.10,65,646/- TOTAL RS.36,17,456/- 5. AT THE TIME OF HEARING, AR OF THE ASSESSEE SUBMI TTED THAT HE IS NOT PRESSING GROUND NO.2(I), HENCE, THE SAME IS DIS MISSED, AS NOT PRESSED. 6. THE BRIEF FACTS OF THE CASE WITH REGARD TO GROUN D NO.2(II) AND 2(III) ARE THAT THE AO MADE DISALLOWANCE OF RS.24,95,310/- UNDER THE HEAD ROAD & PITCHING WORK EXPENSES. AND RS.10,65,646/- UNDER THE HEAD DRILLING & GROUTING EXPENSES ON THE GROUND THAT T HE ASSESSEE HAD NOT DEDUCTED TDS UNDER SECTION 194C OF THE ACT, AT THE TIME OF CREDIT OF THE AMOUNTS IN THE ACCOUNTS OF THE CREDITOR. 7. ON APPEAL, THE CIT(A) OBSERVED THAT THE OBSERVAT ION OF THE AO IN THE REMAND REPORT IS THAT ALL THE PAYMENTS WERE MAD E IN CASH AND NORMALLY IN CIVIL CONSTRUCTION WORKS THE LABOUR IS HIRED THROUGH LABOUR CONTRACTORS WHO IN TURN MAKE PAYMENTS TO THE LABOUR ERS. NO EVIDENCES ARE FURNISHED TO SHOW THAT THE APPELLANT DIRECTLY M ADE PAYMENTS TO LABOURERS. THEREFORE, HE CONFIRMED THE DISALLOWANC E OF RS.24,95,310/- AND RS.10,65,646/- MADE BY THE AO UNDER SECTION 40( A)(IA) OF THE ACT. 8. BEFORE US, THE AR OF THE ASSESSEE SUBMITTED THAT THESE PAYMENTS WERE MADE DIRECTLY TO THE LABOURERS AS PER THE WAGE SHEET. HE REFERRED TO THE WRITTEN SUBMISSION FILED BEFORE THE CIT(A) D URING THE COURSE OF ITA NO.1217/AHD/2011 3 APPEAL HEARING, COPY OF WHICH IS PLACED AT PAGE NO. 18 TO 21 OF THE PAPER BOOK. BY REFERRING TO PAGE NO.21 OF THE PB I N PARA (III) SUBMITTED THAT IT WAS SUBMITTED BEFORE THE CIT(A) THAT THE PA YMENTS FOR ROAD AND PITCHING WORK AND DRILLING & GROUTING WORK WAS MADE BY THE ASSESSEE TO THE LABOURERS DIRECTLY EMPLOYED BY THE ASSESSEE AS PER WAGE SHEET. HE SUBMITTED THAT THE CIT(A) HAS NOT ACCEPTED THE SUBM ISSION OF THE ASSESSEE ON THE GROUND THAT NO EVIDENCE COULD BE FI LED BEFORE HIM TO ESTABLISH THAT THE PAYMENTS WERE MADE TO THE LABOUR ERS DIRECTLY EMPLOYED BY THE ASSESSEE. HE ARGUED THAT, IF ONE M ORE OPPORTUNITY IS GRANTED TO THE ASSESSEE, THE ASSESSEE IS IN A POSIT ION TO FILE EVIDENCES IN SUPPORT OF ITS CLAIM THAT THE PAYMENTS WERE MADE DI RECTLY TO THE LABOURERS AND NOT TO THE CONTRACTORS, AND THEREFORE , THE PROVISION OF SECTION 194C ARE NOT APPLICABLE TO THE ASSESSEE, AN D THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS FROM THE PA YMENTS MADE TO THE LABOURERS, AND THE AO WAS NOT JUSTIFIED IN MAKI NG THE DISALLOWANCE BY INVOKING THE PROVISION OF SECTION 40(A)(IA) OF T HE ACT. 9. DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF T HE LOWER AUTHORITIES. 10. AFTER CONSIDERING RIVAL SUBMISSIONS AND PERUSIN G THE MATERIAL ON RECORD, WE FIND THAT THE DISALLOWANCE OF RS.24,95,3 10/- UNDER THE HEAD ROAD & PITCHING WORK EXPENSES AND RS.10,65,646/- UNDER THE HEAD DRILLING & GROUTING EXPENSES WAS MADE BY THE AO B Y INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, ON THE GROUND OF NON- DEDUCTION OF TDS BY THE ASSESSEE FROM THE PAYMENTS MADE TO CONTRACTORS UNDER SECTION 194C OF THE ACT. THE SAM E WAS CONFIRMED IN APPEAL BY THE CIT(A) ON THE GROUND THAT NO EVIDENCE S WERE FURNISHED TO SHOW THAT THE PAYMENTS WERE MADE BY THE ASSESSEE DI RECTLY TO THE LABOURERS EMPLOYED BY HIM. THE AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS NOW IN A POSITION TO PRODUCE THE EV IDENCES TO SUPPORT ITS CLAIM THAT THE PAYMENTS WERE MADE BY THE ASSESSEE D IRECTLY TO THE ITA NO.1217/AHD/2011 4 LABOURERS, AND REQUESTED FOR ONE MORE OPPORTUNITY B EFORE THE AO TO FILE NECESSARY EVIDENCES FOR VERIFICATION. IN OUR CONSI DERED VIEW, IT SHALL BE JUST AND FAIR AND IN THE INTEREST OF JUSTICE TO REM AND THE ISSUE BACK TO THE FILE FOR AO FOR ADJUDICATING THE ISSUE AFRESH A S PER LAW, AFTER PROPER VERIFICATION OF THE EVIDENCES THAT MAY BE FILED BY THE ASSESSEE BEFORE HIM IN THE REMAND PROCEEDINGS. THE ASSESSEE IS ALS O DIRECTED TO FILE EVIDENCES BEFORE THE AO AS AND WHEN CALLED UPON TO DO SO. NEEDLESS TO MENTION, THE AO SHALL ALLOW REASONABLE AND PROPER O PPORTUNITY OF HEARING TO THE ASSESSEE BEFORE ADJUDICATING THE ISS UE AFRESH. THIS GROUND OF THE APPEAL OF THE ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSE. 11. THE GROUND NO.3 OF THE ASSESSEE IS AS UNDER: 3. THE LD.CIT() HAS ERRED IN LAW AND IN FACTS IN D IRECTING THE AO TO VERIFY THE CLAIM OF EXPENSES AMOUNTING TO RS.17, 56,212/- CLAIMED UNDER THE HEAD HIRE CHARES FOR WANT OF NON- DEDUCTION OF TDS U/S.40(A)(IA) OF THE ACT IN COMPLETE DISREGARD OF THE FACTS AND MATERIAL AVAILABLE ON RECORD. THE DIRECTION OF THE LD.CIT(A) IS IN COMPLETE DISREGARD OF THE LAW AND FACTS AND, THE REFORE, THE CLAIM OF THE EXPENSES DESERVES TO BE ALLOWED. 12. AT THE TIME OF HEARING, NO SUBMISSIONS WERE MAD E BY THE AR OF THE ASSESSEE, AND THEREFORE, THIS GROUND OF THE APP EAL OF THE ASSESSEE IS DISMISSED FOR WANT OF PROSECUTION. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON MONDAY, THE 2 ND FEBRUARY, 2015 AT AHMEDABAD. SD/- SD/- ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER