Technosys Services (P) Ltd., Lucknow V. DY. Commissioner of Income Tax, Lucknow

ITA 138/LKW/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1141 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 27-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard

Judgement Text

I.T.A. NO.138/LKW/2017 ASSESSMENT YEAR:2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO.138/LKW/2017 ASSESSMENT YEAR:2012-13 M/S TECHNOSYS SERVICES (P) LTD., 12, ALIGANJ, CHANDRALOK, LUCKNOW. PAN:AABCT 5393 B VS. DY.C.I.T., RANGE-VI, LUCKNOW. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 14/12/2016 RELATING TO ASSESSMENT YEAR 2012-1 3. 2. THE ONLY GROUND TAKEN BY THE ASSESSEE IS THE ACT ION OF CIT(A) BY WHICH HE HAS CONFIRMED THE AD HOC DISALLOWANCE OF R S.49,53,650/- WHICH THE ASSESSING OFFICER HAD MADE AFTER REJECTING THE BOOKS OF THE ASSESSEE U/S 145(3) OF THE ACT. 3. AT THE OUTSET, LEARNED A. R. SUBMITTED THAT THE REJECTION OF BOOKS OF ACCOUNT WAS ARBITRARY AS THE ENTIRE BOOKS OF ACCOUN T WAS PRODUCED AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO PAGE NO. 1 OF THE ASSESSMENT ORDER WHERE THE ASSESSING OFFICER HIMSELF HAD NOTED THAT THE ASSESSEE COMPANY APPELLANT BY SHRI DHARMENDRA KUMAR, C.A. RESPONDENT BY S HRI AMIT NIGAM, D. R. DATE OF HEARING 01/02/2018 DATE OF PRONOUNCEMENT 01 / 02 /201 8 I.T.A. NO.138/LKW/2017 ASSESSMENT YEAR:2012-13 2 ALSO PRODUCED BOOKS OF ACCOUNT AND BILLS & VOUCHERS WHICH WERE TEST CHECKED. LEARNED A. R. SUBMITTED THAT THE ONLY REA SON FOR MAKING AD HOC DISALLOWANCE WAS THE OBSERVATION OF THE ASSESSING O FFICER THAT PAYMENTS FOR JOB WORK WERE MADE IN CASH AND WHICH IN HIS OPINION WERE NOT FULLY VERIFIABLE. LEARNED A. R. ARGUED THAT MERELY MAKIN G PAYMENTS IN CASH DOES NOT MEAN THAT THE PAYMENTS WERE NOT MADE OR SOME BO GUS PAYMENTS WERE RECORDED. LEARNED A. R. SUBMITTED THAT THE BOOKS O F ACCOUNT WERE REJECTED ONLY WITH THE OBJECTION THAT THE ASSESSEE HAD MADE CASH PAYMENTS FOR VARIOUS EXPENSES. LEARNED A. R. SUBMITTED THAT AL L THE BOOKS OF ACCOUNT INCLUDING VOUCHERS AND LEDGER FOR JOB CHARGES WERE PRODUCED AND IN THIS RESPECT INVITED OUR ATTENTION TO PAPER BOOK PAGES 4 2 TO 112 WHERE COPY OF ACCOUNT OF JOB WORK EXPENSES WAS PLACED. OUR ATTEN TION WAS ALSO INVITED TO PAGES 114 TO 132 OF THE PAPER BOOK WHERE THE SPECIF IC ENTRIES RELATING TO PERIOD 19/11/2011 TO 02/12/2011 WERE PLACED. LEAR NED A. R. SUBMITTED THAT IN VIEW OF VARIOUS CASE LAWS PLACED AT PAGES 1 33 TO 175 OF THE PAPER BOOK, THE AD HOC DISALLOWANCE WAS NOT WARRANTED. 4. LEARNED D. R., ON THE OTHER HAND, SUBMITTED THAT THE ASSESSING OFFICER HAD SPECIFICALLY NOTED THAT THE PAYMENTS UN DER THE HEAD JOB CHARGES DURING THE PERIOD 19/11/2011 TO 02/12/2011 WERE MAD E IN CASH AND IN THE NARRATION THE WORD ONLY PART PAYMENTS HAS BEEN MENT IONED AND THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE AS TO THE NAT URE OF THESE EXPENSES AND WAS ALSO NOT ABLE TO SUBSTANTIATE FULL AND FINA L PAYMENTS RELATING TO THESE EXPENSES AND THEREFORE, THE AUTHORITIES BELOW WERE JUSTIFIED IN MAKING THE ADDITION. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSING OFFICER H AD NOTED THAT A NUMBER OF PAYMENTS WERE MADE IN CASH SPECIFICALLY DURING T HE PERIOD 19/11/2011 TO 02/12/2011. HE HAD NOTED PAYMENTS AMOUNTING TO RS. 49,53,650/- WHICH I.T.A. NO.138/LKW/2017 ASSESSMENT YEAR:2012-13 3 WERE DEBITED IN THE JOB CHARGES ACCOUNT WITH THE NA RRATION AMOUNT PAID AS PART PAYMENT. WE FURTHER FIND THAT IN THE PAPER BO OK PAGES 114 TO 132 THE COPY OF ACCOUNT OF JOB WORK PAYMENT IS PLACED WHERE IN CASH PAYMENT RANGING FROM RS.15,000/- TO RS.19,000/- HAS BEEN RE CORDED AND IN THE NARRATION NO NAME OF PAYEE HAS BEEN MENTIONED AND I T HAS BEEN MENTIONED THAT THE PAYMENTS HAVE BEEN MADE AS PART PAYMENT. WHILE NO NAME OF THE PAYEE HAS BEEN MENTIONED BUT A REFERENCE HAS BEEN M ADE FOR THE PART PAYMENT MADE TO ICD TEAM MEMBERS. THE CIT(A) HAD C ONFIRMED THE DISALLOWANCE TO THE EXTENT OF RS.49,53,650/- OUT OF RS.50,00,000/- WHICH IS A SPECIFIC AMOUNT FALLING BETWEEN 19/11/2011 TO 02/ 12/2011 AND FOR WHICH NO EXPLANATION WAS MADE TO THE AUTHORITIES BELOW. HOWEVER, BEFORE US LEARNED A. R. HAS CLAIMED THAT THE NECESSARY VOUCHE RS WERE ALSO PRODUCED BEFORE THE AUTHORITIES BELOW, THEREFORE, WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR READJUDICATION ON THE ABOVE ISSUE AFTER SATISFYING HIMSELF ABOUT THE NATU RE OF PAYMENTS AND AFTER VERIFYING THE PAYMENTS WHICH WERE MADE AS FULL AND FINAL PAYMENTS RELATING TO THESE ENTRIES. NEEDLESS TO SAY THAT THE ASSESSE E WILL BE AFFORDED SUFFICIENT OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 01/02 /2018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:01/02/2018 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW