Shri Tribhovandas R.Prajapati, Anand V. The Income tax Officer,Ward-1, Anand

ITA 1263/AHD/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1156 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 19-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 11-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NAGENDRA SINGH
• Section: 143(3); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: S H RI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER SHRI TRIBHOVANDAS R. PRAJAP A TI, DEEPAWALI SOCIETY, INDIRA GANDHI ROAD, 100 FT. ROAD, INDIRAGANDHI MAR G, ANAND - 388001 PAN: AGBPP8402A (APPELLANT) VS INCOME TAX OFFICER, WARD - 1, ANAND (RESPONDENT) REVENU E BY : S H RI NAGENDRA SINGH , SR. D . R. ASSESSEE BY: S MT. ARTI N. SHAH , A.R. DATE OF HEARING : 19 - 11 - 2 015 DATE OF PRONOUNCEMENT : 20 - 11 - 2 015 / O RDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THE S E TWO ASSESSEE S APPEAL S FOR A.Y. 200 8 - 09 & 2009 - 10, ARISE FROM ORDER OF THE CIT(A) - IV, BARODA DATED 09 - 03 - 2012 & 14 - 06 - 2012 I N APPEAL NOS. CAB/IV - A - 202/2010 - 11 AND CAB/IV - A - I T A NO . 1263 & 2051 / A HD/20 1 2 A SSESSMENT YEAR 200 8 - 09 & 2009 - 10 I.T.A NO S . 1263 & 2051 /AHD/20 12 A.Y. 2008 - 09 & 2009 - 10 PAGE NO SHR I TRIBHUVAND AS R. PRAJAPATI VS. ITO 2 310/2011 - 12 ; RESPECTIVELY , I N PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. WE COME TO ASSESSMENT YEAR 2008 - 09 INVOLVING ITA 1268/AHD/2012 FIRST. THE SOLE SUBSTANTIVE GROUND RAISED IN THIS APPEAL CHALLENGES THE LOWER APPELLATE ORDER CONFIRMIN G DISALLOWANCE/ ADDITION OF RS. 1,32,214/ - @ 5% OF THE LABOUR EXPENSES AMOUNTING TO RS. 26,44,286/ - MADE BY THE ASSESSING OFFICER IN ASSESSMENT ORDER DATED 30 - 11 - 2010. A PERUSAL OF THE CASE FILE REVEALS THAT THE S AME WAS MADE ON ACCOUNT OF ASSE SSEE S FAILU RE IN FURNISHING NAMES OF THE PAYEES, VOUCHERS, PARTICULARS OF THE WORKS DONE ALONG WITH DATES ETC. THE SOLE REASON WAS FAILURE IN CONDUCTING VERIFICATION OF THESE EXPENSES IN OTHER WORDS. THE CIT(A) APPROVES ASSESSING OFF ICER S REASONING. THE ASSESSEE DOES NOT DISPUTE HIS FAILURE IN FILING RELEVANT DETAILS BEFORE THE LOWER AUTHORITIES . THE SAME POSITION CONTINUES BEFORE US AS WELL. HE PLACED ON RECORDS TRIBUNAL S ORDER IN ASSESSMENT YEAR 2005 - 06 RESTRICTING AN IDENTICAL CLAIM @ 33.95% OF THE SALES WHICH WAS DISALLOWED TO THE EXTENT OF RS. 1,50,000/ - BY THE LOWER AUTHORITIES AS CONFIRMED ONLY TO THE EXTENT OF RS. 1 LACS BY A CO - ORDINATE BENCH IN ITS ORDER DATED 25 - 07 - 2012. WE ARE OF THE OPINION THAT THE IMPUGNED FAILURE IN FILING NECESSARY PA RTICULARS IS NOT CONDONED F OR THE SOLE REASON THAT THE PER CENTAGE OF LABOUR EXPENSES IS MUCH LOWER IN THE IMPUGNED ASSESSMENT YEAR . THE FACT ALSO REMAINS THAT THE CO - ORDINATE BENCH HAS GRANTED PART RELIEF IN IDENTICAL CIRCUMSTANCES . WE ACCORDINGLY DRAW S UPPORT FROM THE SAME AND OBSERVE THAT LARGER INTEREST OF JUSTICE WOULD BE MET IN CASE THE I.T.A NO S . 1263 & 2051 /AHD/20 12 A.Y. 2008 - 09 & 2009 - 10 PAGE NO SHR I TRIBHUVAND AS R. PRAJAPATI VS. ITO 3 IMPUGNED LABOUR EXPENDITURE DISALLOWANCE OF RS. 1,32,214/ - IS RESTRICTED TO RS. 1 LACS ONLY. ORDERED ACCORDINGLY. THIS GROUND IS PARTLY ACCEPTED. ITA 1263/AHD/ 2012 IS PARTLY ALLOWED. 3. NOW , WE COME TO ASSESSMENT YEAR 2009 - 10 INVOLVING ITA 2051/AHD/2012. ASSESSEE S FIRST SUBSTANTIVE GROUND CHALLENGES ACTION OF THE LOWER AUTHORITIES IN DISALLOWING A SUM OF RS. 1,43,900/ - U/S. 40 (A)(IA) FOR WANT OF TDS DEDUCTION . THIS GROSS SUM COMPRISES OF RS. 9,500/ - EACH ON 12 - 05 - 2008 AND 10 - 06 - 2008, RS. 9,800/ - ON 10 - 07 - 2008, RS. 10,200/ - ON 12 - 08 - 2008, RS. 11,700/ - EACH ON 12 - 09 & 10 - 2008, RS. 15,500/ - ON 01 - 11 - 2008, RS. 12,800/ - ON 10/12/2008 - 10/01/2009 - 10/02/2009, RS. 13 ,200/ - ON 10/03/2009 AND RS. 15,400/ - ON 31/03/2009. THE ASSESSEE CLAIMED THIS SUM TO BE SALARY PAID TO HIS ENGINEERS. THE ASSESSING OFFICER OBSERVED IN ASSESSMENT ORDER THAT ABOVE STATED PAYMENT AMOUNTS WERE DIFFERENT FROM MONTH TO MONTH WHICH INDICATED NATURE THEREOF AS PROFESSIONAL FEES PAID TO ENGINEERS LIABLE FOR TDS DEDUCTION U/S. 194J. THIS MADE HIM TO DISALLOW ALL OF THE AMOUNT U/S. 40(A)(IA). 4 . THE ASSESSEE PREFERRED APPEAL. THE CIT(A) INTER ALIA HOLDS THAT THERE WAS NO SALARY REGISTER PRODU CED IN ASSESSMENT OR LOWER APPELLATE PROCEEDINGS, FLUCTUATIONS IN SALARY AMOUNTS ARE VERY MUCH APPARENT AND THERE WAS NO EXPLANATION AS TO HOW AN ENGINEER WAS I.T.A NO S . 1263 & 2051 /AHD/20 12 A.Y. 2008 - 09 & 2009 - 10 PAGE NO SHR I TRIBHUVAND AS R. PRAJAPATI VS. ITO 4 WORKING AS A SALARIED EMPLOYEE WITHOUT APPLICATION OF THE RELEVANT PROVIDENT FUND LAWS. THIS LEA VES THE ASSESSEE AGGRIEVED. 5 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE CASE FILE. THERE IS NO DISPUTE THAT THE ASSESSEE HAS NOT SUBJECTED THE SUM IN QUESTION OF RS. 1,43,900/ - TO TDS DEDUCTION. HIS CASE IS THAT THIS SUM COMPRISES OF SALARY PAYMENTS. HE FILES BEFORE US ENGINEERS SALARY EXPENDITURE LEDGER ACCOUNT COPY FROM 01 - 04 - 2008 TO 31 ST OF MARCH OF 2009 COMPRISING OF 12 PAYMENT INSTANCES FROM 12 - 05 - 2008 TO 31/03/2009. TWO PAGE THEREIN NAMELY SHRI KALPESH R. MISTRY AND SHRI MUSTAK ABDU L RAHMAN FIGURE IN ALL OF THESE INSTANCES. THEIR AMOUNTS ARE RS. 5000/ - AND RS. 4500/ - IN FIRST TWO MONTHS. THEREAFTER, THERE IS S OME INCREASE. FROM SEP, 2008, W E FIND THAT A THIRD PAYEE HAS ALSO JOINED. THERE ARE ONE OR TWO INSTANCES OF BONUS PAYMENT AS WELL. ALL THIS TAKES CARE OF THE LOWER AUTHORITIES REASON DRAWING AN ADVERSE INFERENCE QUA VARIATION IN SALARY SUMS. THESE PERIODIC PAYMENTS MADE PER MONTH INDICATE THAT THE SAME ARE IN T HE NATURE OF SALARY. THE MERE FACT THAT THERE IS NO APPOINT MENT LETTER FORTHCOMING WOULD NOT MEAN THAT MUTUAL RELATION OF EMPLOYER - EMPLOYEE DOES NOT DEVELOP IN ABSENCE THERETO ; MORE PARTICULARLY WHEN ALL OTHER EVIDENCE IS APPARENT FROM THE CASE FILE. WE OBSERVE IN THESE FACTS THAT ASSESSEE HAS NOT MADE ANY PROFESSIONAL FEE PAYMENT TO HIS PAYEES LIABLE FOR TDS DEDUCTION U/S. 194J OF THE ACT. THIS FIRST SUBSTANTIVE GROUND SUCCEEDS. I.T.A NO S . 1263 & 2051 /AHD/20 12 A.Y. 2008 - 09 & 2009 - 10 PAGE NO SHR I TRIBHUVAND AS R. PRAJAPATI VS. ITO 5 6. THIS LEAVES US WITH THE ASSESSEE S SECOND SUBSTANTIVE GROUND CHALLENGING DISALLOWANCE/ADDITION OF RS. 1,53,782/ - @ 5% OF THE LABOUR EXPENSES MADE BY THE LOWER AUTHORITIES. BOTH PARTIES ARE AD - IDEM THAT OUR FINDINGS HEREINABOVE IN ASSESSMENT YEAR 2008 - 09 APPLY HEREIN AS WELL. WE APPRECIATE THIS FAIR STAND AND RESTRICT THE IMPUGNED LABOUR EXPENDITURE DISALLOWANCE TO RS. 1 LACS ONLY. THE ASSESS EE GETS PART RELIEF ON THIS ISSUE. ITA 2051/AHD/2012 IS PARTLY ALLOWED. 7. BOTH THESE ASSESSEE S APPEALS ITAS 1263 AND 2051/AHD/2012 ARE PARTLY ACCEPTED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 20 - 11 - 2015 SD/ - SD/ - ( ANIL CHATURVEDI ) ( S . S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 20 /11 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,