The DCIT, Circle-1, Surat V. M/s. Bahubali Print Pvt.Ltd., Surat

ITA 1291/AHD/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9513 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-10-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 23-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MEENA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D. C. AGRAWAL , AM) ITA NO.1291 AND 1292/AHD/2010 A. Y: 2006-07 AND 2007-08 THE D. C. I. T., CIRCLE-1, ROOM NO.108, AAYAKAR BHAVAN, MAJURA GATE, SURAT VS M/S. BAHUBALI PRINTS PVT. LTD., A-3001 3002, KOHINOOR TEXTILE MARKET, RING ROAD, SURAT PA NO. AABCB 6232 H (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. K. MEENA, DR RESPONDENT BY SHRI S. N. SOPARKAR, AR O R D E R PER BHAVNESH SAINI: BOTH THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE LEARNED CI T(A)-I, SURAT DATED 22-02-2010 FOR ASSESSMENT YEARS 2006-07 AND 2007-08 , CHALLENGING THE DELETION OF ADDITION OF RS.34,50,038/- AND RS.15,36 ,390/- ON ACCOUNT OF BOGUS SUB CONTRACT PAYMENTS. 2. THE AO IN THE ASSESSMENT ORDER NOTED THAT SIMILA R DISALLOWANCES HAVE BEEN MADE IN THE PRECEDING ASSESSMENT YEAR 200 5-06 WITH REGARD TO THE PAYMENTS MADE TO THE SUB CONTRACTORS SHRI BA LRAMSINGH SENGAR AND ARJUNSINGH SENGAR AND BY FOLLOWING THE ORDER FO R ASSESSMENT YEAR 2005-06 MADE THE SIMILAR DISALLOWANCES. IT WAS PLEA DED BEFORE HIM THAT LEARNED CIT(A) HAS DELETED THE ADDITION. BUT THE AO NOTED THAT THE APPEAL OF THE DEPARTMENT IS PENDING BEFORE THE TRIBUNAL. THEREFORE, THE ADDITIONS WERE ACCORDINGLY REPEATED. THE LEARNED CI T(A) CONSIDERING HIS APPELLATE ORDER DATED 20-05-2008 FOR ASSESSMENT YEA R 2005-06 DELETED THE ADDITIONS IN BOTH THE ASSESSMENT YEARS. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTS ET SUBMITTED THAT THE DEPARTMENTAL APPEAL IN THE PRECEDING ASSESSMENT YEAR 2005-06 IN ITA NO.1291 AND 1292/AHD/2010 DCIT, CIR-1, SURAT VS M/S. BAHUBALI PRINTS PVT. LTD . 2 ITA NO.2705/AHD/2008 HAS BEEN DISMISSED BY THE TRIB UNAL VIDE ORDER DATED 24-09-2010. COPY OF THE ORDER IS FILED ON REC ORD. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE AO. 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE ARE OF THE VIEW THAT DEPARTMENTAL APPEALS HAVE NO MERITS AND SHALL HAVE TO BE DISMISSED. THE AO ON THE BASIS OF FINDINGS GIVEN IN ASSESSMENT YEA R 2005-06 MADE THE DISALLOWANCES OUT OF THE PAYMENTS MADE TO THE SUB C ONTRACTORS. THE LEARNED CIT(A) VIDE HIS APPELLATE ORDER DATED 28-05 -2008 DELETED THE ADDITIONS AND THE ORDER OF THE LEARNED CIT(A) IS CO NFIRMED BY THE TRIBUNAL VIDE ORDER DATED 24-09-2010(SUPRA) IN WHIC H IN PARA 6 IT WAS HELD AS UNDER: 6. ON CONSIDERATION OF THE ABOVE FACTS AND SUBMISSIONS OF THE PARTIES IN THE LIGHT OF THE FIND INGS OF THE LEARNED CIT(A), WE DO NOT FIND IT O BE A CASE FOR I NTERFERENCE. THE ASSESSEE PRODUCES ONE OF THE SUB CONTRACTORS BE FORE THE AO FOR EXAMINATION ON OATH AND HE HAS IN HIS STATEM ENT SUPPORTED THE CASE OF THE ASSESSEE THAT THE SUB CON TRACTOR DID WORK FOR THE ASSESSEE AND RECEIVED PAYMENTS BY ACCO UNT PAYEE CHEQUES WHICH WERE DEPOSITED IN HIS ACCOUNT. THE OTHER SUB CONTRACTOR HAS EXPIRED WHO WAS REAL BROTHER OF THE OTHER SUB CONTRACTOR WHOSE STATEMENT WAS RECORDED BY THE AO. THE AO DID NOT INSIST FOR PRODUCTION OF HIS WIFE BEING LEGAL HEIR. THE ASSESSEE, THEREFORE, PROVED ON RECORD THAT THE SUB CONTRACTORS HAD DONE WORK FOR THE BUSINESS OF THE A SSESSEE AND HAVE RECEIVED PAYMENTS THROUGH ACCOUNT PAYEE CH EQUES ON WHICH TDS HAVE BEEN DEDUCTED. PAYMENTS ARE VERIF IABLE FROM THE BANK ACCOUNTS OF THE SUB CONTRACTORS. IT W OULD SHOW THAT BOTH THE SUB CONTRACTORS WERE ASSESSED TO TAX AND HAVE ACKNOWLEDGED RECEIPT OF THE PAYMENTS FROM THE ASSES SEE. THE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD THAT THE BILLS RAISED BY THE SUB CONTRACTORS WERE FALSE OR BOGUS. THE GROSS PROFIT RATE IS BETTER AS COMPARED TO THE PRECEDING ASSESSMENT YEARS. THEREFORE, THERE WAS NO REASON FOR THE ASSES SEE TO INFLATE EXPENSES. MERELY BECAUSE THE SUB CONTRACTOR HAS GIVEN ADDRESS OF THE ASSESSEE IN HIS RETURN OF INCOME WIT HOUT KNOWLEDGE OF THE ASSESSEE IS NO GROUND TO TAKE ADVE RSE INFERENCE AGAINST THE ASSESSEE. CONSIDERING THE FAC TS AND CIRCUMSTANCES OF THE CASE NOTED ABOVE, WE DO NOT FI ND ANY ITA NO.1291 AND 1292/AHD/2010 DCIT, CIR-1, SURAT VS M/S. BAHUBALI PRINTS PVT. LTD . 3 MERIT IN THE APPEAL OF THE REVENUE. THE LEARNED DR COULD NOT POINT OUT ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A). ACCORDINGLY, WE CONFIRM THE FINDINGS OF THE LEARNED CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 5. THE ONLY BASIS FOR MAKING THE ADDITION BY THE AO WAS THE FINDING GIVEN BY HIM IN ASSESSMENT YEAR 2005-06 WHICH WOULD NOT SURVIVE BECAUSE THE SAME WAS SET ASIDE BY THE LEARNED CIT(A ) AND CONFIRMED BY THE TRIBUNAL. THEREFORE, NOTHING IS LEFT FOR FURTHE R CONSIDERATION IN THE MATTER. 6. IN THE RESULT, BOTH THE DEPARTMENTAL APPEALS ARE DISMISSED. ORDER PRONOUNCED ON 22-10-2010. SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 22-10-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD