M/S MOHD. FIROZ CONSTRUCTION COMPANY, KANKER V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 2(1), RAIPUR

ITA 127/RPR/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9673 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 03-07-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 40A(3); 143(2)

Judgement Text

आयकरअपीलȣयअͬधकरणÛयायपीठरायप ु रमɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR (Through Virtual Court) BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 127/RPR/2018 Ǔनधा[रण वष[ / Assessment Year : 2012-13 M/s Mohd. Firoz Construction Company Gilli Chowk, Main Road, Kankar (C.G.)-494 334. PAN : AAKFM4806A .......अपीलाथȸ / Appellant बनाम / V/s. The Deputy Commissioner of Income Tax-2(1), Raipur (C.G.) ......Ĥ×यथȸ / Respondent Assessee by : None Revenue by : Shri G.N Singh, DR स ु नवाई कȧ तारȣख / Date of Hearing :27.05.2022 घोषणा कȧ तारȣख / Date of Pronouncement :07.06.2022 2 M/s Mohd. Firoz Construction Company Vs. DCIT-2(1) ITA No. 127/RPR/2018 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee firm is directed against the order passed by the CIT(Appeals)-I, Raipur, dated 01.05.2018, which in turn arises from the order passed by the A.O under Sec.143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 23.03.2015 for assessment year 2012-13. Before us the assessee has assailed the impugned order on the following grounds of appeal: “1. Upholding the addition of Rs.16,330/- made by the Assessing Officer out of interest on IT refund A/c. 2. Upholding the lump sum addition of Rs.3,00,000/- made by the Assessing Officer out of Wages, Murum, Dhalai, Bolder Dhulai, Sand Dhulai, Labour Charges etc. 3. The order of the learned CIT(Appeals) is erroneous in law as well as in facts.” 2. Succinctly stated, the assessee firm which is engaged in the business of construction had e-filed its return of income for the assessment year 2012-13 on 15.10.2012, declaring an income of Rs.11,14,490/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s. 143(2) of the Act. Original assessment was framed by the A.O vide his order passed u/s.143(3) dated 23.03.2015 wherein after making two fold additions/disallowances, viz. (i) addition of interest on refund: Rs.16,330/- ; and (ii) lump sum disallowance out of construction expenses i.e. wages, 3 M/s Mohd. Firoz Construction Company Vs. DCIT-2(1) ITA No. 127/RPR/2018 murram, dhalai, bolder dhulai, sand dhulai, labour charges etc. for the reason that the said expenses were not supported by supporting bills/vouchers : Rs.3 lacs, the income of the assessee firm was assessed at Rs.14,30,820/- 3. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without any success. At this stage, we may herein observe that the CIT(Appeals) while upholding the lump sum disallowance of construction expenses of Rs. 3 lac (supra) had referred to specific instances of payments aggregating to Rs.7,08,690/- that were booked by the assessee under the said head of expenditure which were either not verifiable or were found to have been incurred in violation of Section 40A(3) of the Act. 4. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. As the assessee appellant despite having been intimated about the hearing of appeal has failed to put up an appearance before us, therefore, we are constrained to proceed with and dispose off the appeal as per Rule 24 of the Appellate Tribunal Rules, 1963 i.e, after hearing the respondent revenue and perusing the orders of the lower authorities. 5. We have heard the Ld. Departmental Representative (for short ‘DR’) and perused the orders of the lower authorities qua the issue in question. 4 M/s Mohd. Firoz Construction Company Vs. DCIT-2(1) ITA No. 127/RPR/2018 In so far the claim of the assessee that the A.O had wrongly made an addition towards interest on refund of Rs.16,330/-, we are unable to persuade ourselves to subscribe to the same. As the assessee had failed to offer for tax the interest on refund of Rs.16,330/- in its return of income, therefore, in our considered view the A.O had rightly made an addition of the same while framing the assessment. We, thus, in terms of our aforesaid observations finding no infirmity in the view taken by the CIT(Appeals) who had rightly brought to tax the interest on refund received by the assessee, uphold his order to the said extent. 6. Adverting to the lump sum disallowance of Rs.3 lac incurred on construction expenses i.e. wages, murram, dhalai, bolder dhulai, sand dhulai, labour charges etc. that was made by the A.O, for the reason that the said claim of expenses was not supported by proper vouchers/bills, we find that though the A.O had failed on his part in pointing out the specific expenses which were allegedly not supported by proper bills/vouchers etc., but the said failure of his had thereafter been corrected by the CIT(Appeals). On a perusal of the order of the CIT(Appeals), we find that he had after categorically referring to the expenses which were claimed by the assessee to have been incurred in respect of 12 persons, observed, that either the said claim of expenses were not supported by proper vouchers; or were incurred in violation of the provisions of section 40A(3) of the Act. On a perusal of the 5 M/s Mohd. Firoz Construction Company Vs. DCIT-2(1) ITA No. 127/RPR/2018 order of the CIT(Appeals), it transpires that he had worked out the aforesaid infirmity in respect of expenses aggregating to Rs.708690/- as against the disallowance of Rs.3 lacs that was made by the A.O on the said count. As nothing is either discernible from the record which would persuade ourselves to conclude that the observations of the CIT(Appeals) are either perverse or incorrect, therefore, we are of a strong conviction that the sustaining of the addition of Rs.3 lac (supra) after referring to infirmities in the assessee’s claim of expenses of Rs.7,08,690/- (supra) reveals beyond doubt a reasonable approach adopted by him. We, thus, in terms of our aforesaid observations finding no error in the view taken by the CIT(Appeals), uphold the same. Thus, the Grounds of appeal raised by the assessee are dismissed in terms of our aforesaid observations. 7. In the result, appeal of the assessee is dismissed in terms of our aforesaid observations. Order pronounced in open court on 7 th day of June, 2022. Sd/- Sd/- RATHOD KAMLESH JAYANTBHAI RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 7 th June, 2022 SB 6 M/s Mohd. Firoz Construction Company Vs. DCIT-2(1) ITA No. 127/RPR/2018 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5.ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायप ु रबɅच, रायप ु र / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, Ǔनजी सͬचव / Private Secretary आयकरअपीलȣयअͬधकरण, रायप ु र / ITAT, Raipur.