GAJANAN TOWERS PVT. LTD., Jaipur V. ITO, Jaipur

ITA 1432/JPR/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7549 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 21-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: S L PODDAR
• Section: 133A; 194C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L. KALRA) ITA NO.1432/JP/2010 ASSESSMENT YEAR : 2005-2006 GAJANAN TOWERS PVT. LTD. VS. INCOME TAX OFFICER , BEHIND OIL MILL COMPOUND WARD-4(1) NAHARGARH ROAD, JAIPUR JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.L. PODDAR RESPONDENT BY : SHRI D.K. MEENA DATE OF HEARING: 23.01.2012 DATE OF PRONOUNCEMENT: 25.01.2012 ORDER PER SHRI N.L. KALRA, A.M. 1. THE ASSESSEE HAS FILED APPEAL AGAINST ORDER OF L D. CIT (A)-II, JAIPUR DATED 22.11.2010. THE ASSESSEE HAS RAISED THIRTEEN GROUNDS OF APPEAL. THE FOLLOWING GROUNDS OF APPEAL WERE NOT PRESSED DURING THE COURSE OF PROCEEDINGS BEFORE US AND HENCE THOSE ARE DISMISSED AS NOT PRESSED. GROUNDS OF APPEAL NO.1,4,8,9,10,11 AND 13 2. GROUND OF APPEAL NO.2 IS THAT LD. CIT (A) HAS CO NFIRMED THE ADDITION OF RS.5,04,985/- ON ACCOUNT OF UNDISCLOSED SALES. 3. SURVEY U/S 133A WAS CONDUCTED ON 10.03.2006 AND CERTAIN DOCUMENTS WERE FOUND DURING THE COURSE OF SURVEY. ON THE BASIS OF THAT DOCUMENT , THE A.O. ISSUED A SHOW CAUSE NOTICE WHICH IS REPRODUCED AS UNDER IN RESPECT OF ADDITION PROPO SED ON ACCOUNT OF UNDISCLOSED SALES. 2 DURING THE COURSE OF SURVEY U/S 133A OF THE INCOME- TAX ACT, 1961 AT YOUR BUSINESS PREMISES ON 10-03-2006, CERTAIN PRINT OUTS FROM THE COMPUTER WERE TAKEN OUT. ON GOING THROUGH THESE PRINT OUT IT WAS FOUND THAT THE SALE CONSIDERATION SHOWN BY YOURSELF FOR THE FLATS/SHOPS SOLD DURING THE YEAR UNDER CONSIDERATION WAS LESSER THAN WHAT WAS RECORDED IN THE COMPUTER. A DETAILED CHART IS GIVEN AS UNDER:- FLAT NO. SALE CONSIDERATION DECLARED BY YOU IN SAL E VALUE AS COMPUTER PRINT DIFFERENCE SALE CONSIDERED AS PER DEED CASH RECEIVED TOTAL 116 612800 23966 636466 791724 154958/- 206 808080 168257 976337 1040648.25 64311.25 213 718328 - 718328 1050449.25 332121.25 214 751708 152566 904274 963015.75 58741.75 217 605160 116446 721606 773364.75 51,758.75 307 582825 - 582825 675808.40 92,983.40 314 732556 148551 881107 940033.55 58,926.55 419 896000 - 896000 952056.55 56056.50 508 614858 - 614858 663781.20 48923.20 522 579227 - 579227 710599.20 131372.20 523 491851 98174 590025 718210.95 128185.95 G-4 225150 230000 455150 530465 75312/- TOTAL 1253650.80 4. BEFORE THE A.O. THE ASSESSEE FILED THE FOLLOWING REPLY: IT HAVE BEEN MENTIONED BY YOU THAT THERE IS DIFFERE NCE IN RESPECT OF SALE CONSIDERATION DECLARED BY THE ASSESSEE AND THE SALE VALUE AS PER THE COMPUTER PRINT OUT IN RESPECT OF VARIOUS FLATS MENTIONED IN YOUR LETTER. YOU HAVE REFERRED TO COMPUTER PRINT OUT FOR WHICH THE COPY HAS BEEN GIVE N. IT IS SUBMITTED THAT THERE IS NO DIFFERENCE IN THE VALUE AS THE COMPUTER PRINT OUT IS ONLY A INDICATIVE VALUE OF VARIOUS FLATS WHICH THE ASSESSEE HAS WORKED OUT ON THE BASIS OF FLAT SQUARE FEET RATE. FROM THE PERUSAL OF THE LIST IT WOULD BE OBSERVED THAT THE ASSESSEE HAS MENTIONED THE RATE OF RS.795/- PER SQ.FT.FOR FIRST FLOOR, RS.775/- PER SQ.FT.FOR SECOND FLOOR, RS.755/- PER SQ.FT.FOR THIRD FLOOR, RS.735/- PER SQ.FT. FOR FOURTH FLOOR AND RS.715/- PER SQ.FT.FOR FIFTH FLOOR . THIS WORKING WAS DONE BY THE ASSESSEE TO ARRIVE AT THE AMOUNT WHICH COULD HAVE B EEN RECEIVED IF THE ENTIRE FLATS WERE SOLD AT THE ASSUMED RATE. THIS LIST GOT NO CO- RELATION WITH ACTUAL RECEIPTS AND THE ASSESSEE HAS DULY SHOWN THE ACTUAL RECEIPT IN I TS BOOKS OF ACCOUNT AS WELL AS OTHER DOCUMENTS WHICH WERE FOUND AT THE TIME OF SUR VEY. THE CORRECT SALE CONSIDERATION WAS MENTIONED IN THE DOCUMENTS WHICH WERE FOUND AT THE TIME OF SURVEY AND THE SLAE HAS BEEN UNDER STATED AND THERE IS NO UNDER STATEMENT OF SALES 3 AND THE SAID COMPUTER PRINT OUT ANNEXED BY YOU ALON G WITH YOU LETTER IS ONLY MENTIONING ASSUMED FIGURES. FURTHER YOUR ATTENTION IS INVITED TO THE FACT THAT THE SAID COMPUTER PRINT OUT HAS ALSO MENTIONED TRANSFOR MER CHARGES IS CONCERNED, THE ASSESSEE COMPANY HAS DULY SHOWN THE SAME IN THE OTH ER INCOME WHICH CAN BE VERIFIED FROM THE AUDITED ACCOUNTS. FURTHER WITH RE GARD TO THE MAINTENANCE CHARGE A SEPARATE SOCIETY UNDER THE NAME OF RAMA HE RITAGE OWNERS WELFARE & MAINTENANCE SOCIETY HAD BEEN FORMED WHICH WAS RECEI VING THE MAINTENANCE. THUS THERE IS NO UNDER STATEMENT OF SALES IN THIS REGARD . 5. THE LD. A.O. AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE RECORDED THE FOLLOWING FINDING: I HAVE CONSIDERED THE SUBMISSION OF THE ASSESSEE, I T IS FOUND THAT THE ASSESSEE WAS ENGAGED IN MAKING SALES WHICH WERE NOT PROPERLY REC ORDED IN ITS BOOKS OF ACCOUNTS I.E. DURING THE COURSE OF SURVEY, IT WAS F OUND THAT SUBSTANTIAL AMOUNT WAS RECEIVED BY THE ASSESSEE IN CASH WHICH WAS NOT RECORDED IN REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE. THEREFORE, IT IS PROVED T HAT THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE WERE NOT CORRECT. FURTHE R, ON GOING THROUGH THE CHART FOUND DURING THE COURSE OF SURVEY, IT WAS FOUND THA T RECEIPTS ON ACCOUNT OF MAINTENANCE CHARGES AND TRANSFORMER CHARGES WERE AC CEPTED BY THE ASSESSEE. ALTHOUGH HE SUBMITTED THA THE MAINTENANCE CHARGES G OES TO RAMA HERITAGE OWNERS WELFARE & MAINTENANCE SOCIETY. SINCE TWO FAC TS SHOWN IN THIS CHART ARE ACCEPTED BY THE ASSESSEE AS CORRECT, THEREFORE, IT CANNOT BE SAID THAT THE THIRD FACT (I.E. TOTAL COST SHOWN IN THE CHART IS INCORRECT). IT IS A SET PRINCIPLE OF LAW THAT IF PART OF THE ENTRIES ON A PAPER IS CORRECT THEN WHOL E OF THE ENTRIES SHALL BE DEEMED TO BE CORRECT UNLESS AND OTHERWISE THE PERSON WHO P OSSESS THAT PAPER CONCLUSIVELY PROVE THAT ONLY THA PART WAS INCORRECT. IN CASE OF ASSESSEE, THEY WERE NOT ABLE TO PROVE THAT THE TOTAL COST SHOWN IN THE CHART WAS NO T CORRECT. A COMPARATIVE CHART OF MAINTENANCE CHARGES SHOWN IN COMPUTER PRINT OUT AND WHAT WAS CHARGED BY THE SOCIETY IS GIVEN AS UNDER:- FLAT NO. NAME OF PERSON MAINTENANCE CHARGES AS PER CHART MAINTENANCE CHARGES PAID 214 MRS. KAVITA VERMA 57455.50 57,916.00 314 SMT. RATAN KANWAR 57,455.50 57,916.00 ONLY TWO INSTANCES WERE CAME TO NOTICE BALANCE DETA ILS WERE NOT AVAILABLE HENCE NOT COMPARED. FROM ABOVE TABLE, IT IS SEEN THAT THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY WAS CORRECT AND THE PERSONS HAVE P AID CHARGES WHICH WERE MORE THAN WHAT WAS SHOWN IN THE CHART. ON THE BASIS OF S UBMISSION OF ASSESSEE AND ALSO AFTER CONSIDERING THE FACTS THAT MAINTENANCE C HARGES WERE RECEIVED BY THE SOCIETY AND TRANSFORMER CHARGES ARE SEPARATELY SHOW N IN RECEIPT. CONSIDERING THESE FACTS, A FRESH CHART IS PREPARED WHICH IS GIV EN AS UNDER, THIS CHART CONTAINS 4 COST OF FLAT ONLY AND TRANSFORMER CHARGES AND MAINT ENANCE CHARGES ARE NOT INCLUDED- FLAT NO. SALE CONSIDERATION DECLARED IN RETURN SA LE VALUE AS PER COMPUTER PRINT OUT DIFFERENCE SALE CONSIDERATION AS PER DEED CASH RECEIVED AS ADMITTED TOTAL 116 612800 23966 636766 730764.00 93998.00 206 808080 168257 976337 963487.00 - 213 718328 - 718328 972694.75 254366.75 214 751708 152566 904274 890560.25 - 217 605160 116446 721606 712403.25 - 307 582825 - 582825 619764.40 36939.40 314 732556 148551 881107 867578.05 - 419 896000 - 896000 890011.50 - 508 614858 - 614858 606377.20 - 522 579227 - 579227 650135.20 70908.20 523 491851 98174 590025 657249.45 67224.45 G-4 225150 230000 455150 530465 75315 TOTAL 7618543/- 937960/- 8556503/- 9091490.05 568751.80 ON GOING THROUGH THIS CHART IT WAS FOUND THAT THE D OCUMENT FOUND AT THE BUSINESS PREMISES OF ASSESSEE, ARE CORRECT AND THES E PAPERS ARE SHOWING MINIMUM SELLING RATES, AS IN SOME OF THE CASES SALE AMOUNT DECLARED BY ASSESSEE INCLUDING CASH RECEIVED WAS MORE THAN WHAT WAS SHOWN IN THE CHART. THIS IS PROVED IF WE SEE FOR THE AMOUNTS DIS CLOSED TO HAVE RECEIVED AND WHAT WAS SHOWN IN THE PAPER IN CASES OF FLAT NO . 206,214,314,419 & 508. THEREFORE THE CHART IS HELD AS CORRECT. SINCE THE BOOKS OF ASSESSEE WERE NOT SHOWING TRUE TRANSACTIONS AS FOUND DURING THE COURSE OF SURVEY AND AS NARRATED ABOVE, THEREFORE, I HOLD BOOKS OF A CCOUNT MAINTAINED BY ASSESSEE AS DEFECTIVE AND APPLY PROVISIONS OF SECTI ON 145(3). THE ASSESSEE HAS SHOWN SALES AS PER PROFIT AND LOSS ACCOUNT AT RS.76,18,543/- AND FURTHER SURRENDERED CASH RECEIVE D FROM THESE PERSONS WHICH WAS NOT RECORDED IN REGULAR GOOKS OF ACCOUNTS AT RS.9.37.960/- AND INCLUDED THE SAME IN ITS TOTAL INCOME AS PER REVISE D RETURN. FURTHER IT WAS FOUND THAT THE ASSESSEE HAD NOT DISCLOSED SALES AMO UNTING TO RS.5,68,751.80/- AS PER CHART GIVEN ABOVE OR WE CAN SAY THAT THE ASSESSEE UNDERSTATED ITS SALES BY RS.5,68,751.80. THEREFORE, AN ADDITION OF RS.5,68,751.80/- IS MADE TO THE TOTAL INCOME OF THE ASSESSEE. 5 6. BEFORE THE LD. CIT (A), THE ASSESSEE SUBMITTED A S UNDER: IT WAS SUBMITTED BY THE APPELLANT THROUGH LETTER DA TED 26/27.11.2007 THAT WHATEVER WAS MENTIONED IN THE COMPUTER SHEET WAS AN EXPECTED PRICE WHICH WAS WORKED OUT AT A FIXED FLAT RATE AND IT HAD NO RELAT ION WITH THE ACTUAL REALIZATION OF SALE PROCEEDS. IT WAS FURTHER SUBMITTED FROM THE PE RUSAL OF THE COMPUTER SHEET, IT WAS NOTICED THAT WORKING OF FIRST FLOOR WAS DONE @ RS.795 PER SQ. FT., FOR THE 2 ND FLOOR @ RS.775 PER SQ. FT., FOR THE 3 RD FLOOR @ RS.755 PER SQ. FT. AND FOR THE 4 TH FLOOR @ RS.735 AND FOR THE 5 TH FLOOR @ RS.715. ALL THE FLATS ON DIFFERENT FLOOR W ERE NOT SOLD AT THE AFORESAID RATE. IN SUPPORT, IT WAS SUBMITTED THAT WHEREAS IN RESPECT OF SOME FLATES, THE ACTUAL REALIZATION OF SALE PRIC E WAS LESS IN COMPARISON TO THE PRICE WORKED OUT IN THE COMPUTER SHEET BUT IN OTHER CASES, THE ACTUAL SALE REALIZATION WAS HIGHER. IT SHOWED THAT IN THE COMPU TER SHEET, THE SAID COLUMN ONLY INDICATED THE EXPECTED PRICE. IT WAS ARGUED THAT IF THE COMPUTER SHEET DISCLOSED THE ACTUAL REALIZATION OF SALE OF FLAT THEN THERE W OULD HAVE BEEN NO CASE OF SALE PROCEEDS BEING HIGHER THAN THAT IN THE COMPUTER SHE ET. THE LEARNED ASSESSING OFFICER DID NOT FIND FAVOUR WITH THE SUBMISSIONS OF ASSESSEE. SOLELY ON THIS GROUND, THE BOOKS OF ACCOUNTS HAVE BEEN WRONGLY REJ ECTED AND PROVISIONS OF SECTION U/S 145(3) HAVE BEEN ERRONEOUSLY APPLIED. O N THE BASIS OF THIS COMPUTER SHEET, THE LD. AO MADE AN ADDITION OF RS.5,68,751/- WHICH IS MOST UNJUSTIFIED, UNLAWFUL AND INVALID. THE ADDITION SO MADE BY THE L EARNED ASSESSING OFFICER IS PURELY BASED ON GUESS, CONJECTURE AND ESTIMATE. THE SAME DESERVES TO BE DELETED. 7. THE LD. CIT (A) CONFIRMED THE ADDITION AFTER OBSERV ING AS UNDER: I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APPEL LANT. I HAVE ALSO PERUSED THE COMPUTER PRINT OUTS TAKEN DURING THE COURSE OF SURV EY PROCEEDINGS. IT IS SEEN THAT PRINT OUTS IN QUESTION ARE NOT IN THE NATURE OF EST IMATE AS ALLEGED BY THE COUNSEL OF THE APPELLANT. FOR EXAMPLE FIRST COLUMN GIVES SHOP NO.G-4 WHICH STANDS IN THE NAME OF SH. MUKESH KUMAR SHARMA AS PER SECOND COLUM N. THE THIRD COLUMN GIVES THE RECEIPTS NUMBERS, FOURTHE COLUMN GIVES TH E DATES ON WHICH AMOUNTS WERE RECEIVED IN CASH AND CHEQUES, FIFTH COLUMN SHO WS THE AMOUNTS RECEIVED ON VARIOUS DATES, SIXTH COLUMN GIVES THE TOTAL AMOUNT RECEIVED, SEVENTH COLUMN GIVES THE AREA OF SHOP, EIGHTH COLUMN GIVES THE RATE AT W HICH THE SHOP WAS SOLD, NINTH COLUMN GIVES THE TOTAL AMOUNT RECEIVABLE AND LAST C OLUMN GIVES BALANCE RECEIVABLE (DIFFERENCE OF COLUMN 9 AND 6). IT IS NO T UNDERSTOOD AS TO HOW THE APPELLANT HAS ALLEGED THAT THE PRINT OUT IS IN THE NATURE OF ESTIMATES. THE DOCUMENT IS A SPEAKING ONE EVEN SHOWING THE RECEIPT NUMBER, DATES AND AMOUNT RECEIVED ON THE VARIOUS DATES WHICH WOULD NOT HAVE BEEN POSSIBLE IF THE DOCUMENT IN QUESTION RELATED TO SOME KIND OF EXPECTED PRICE OR PLANNING. I THEREFORE AGREE WITH THE FINDINGS OF THE AO THAT SALE CONSIDERATION FOR SHOPS AND FLATS WAS UNDERSTATED BY THE ASSESSEE. THE FIGURES ON LAST TW O PAGES OF ANNEXURE RELATING TO CONSIDERATION FOR SALE OF FLATS, ARE SHOWN IN DECIM ALS SUCH AS RS.9,05,148.35 FOR FLAT NO 101 AND RS.11,25,323.40/- FOR FLAT NO 102. THUS IT IS ACTUAL WORKING AND DOES NOT RELATE TO ESTIMATE WHICH WOULD OBVIOUSLY B E IN ROUND FIGURES. EVEN THE MAINTENANCE CHARGES ARE IN DECIMALS SUCH AS RS.52,6 71.50/- FOR FLAT NO 101. THE 6 ASSESSEE HAS NOT DISPUTED THE MAINTENANCE CHARGES A PPEARING ON THESE PAGES. MOREOVER THE MAINTENANCE CHARGES ARE FOUND RECORDED IN THE BOOKS OF ACCOUNTS OF ASSESSEE I.E. LEDGER ACCOUNT OF M/S RAMA HERITAG E WELFARE & MAINTENANCE SOCIETY. AS A NATURAL COROLLARY, THE OTHER FIGURES HAVE TO BE CONSTRUED AS ACTUAL. IT IS A WELL SETTLED CANON OF INTERPRETATION THAT A DO CUMENT HAS TO BE READ AS A WHOLE & IT IS NOT PERMISSIBLE TO ACCEPT A PART AND IGNORE THE REST OF THE DOCUMENT AS HELD IN THE CASE OF GLASS LINES EQUIPMENTS CO (253 ITR 454 GUJ). THE AO HAS BEEN VERY FAIR AND REASONABLE BECAUSE AFTER CONSIDE RING THE SUBMISSIONS OF THE ASSESSEE, HE HAS REWORKED THE TOTAL RECEIPTS AFTER DEDUCTING TRANSFORMER CHARGES & MAINTENANCE CHARGES WHICH WERE TAKEN TO A SEPARAT E ACCOUNT OR PAID TO M/S. RAMA HERITAGE OWNERS WELFARE & MAINTENANCE SOCIETY. HOWEVER I DO AGREE THAT IN CERTAIN CASES, THE APPELLANT HAS SHOWN MORE SALE CONSIDERATION THAT WHAT IS RECORDED IN THE COMPUTER PRINT OUTS. THE AO CAN NOT REJECT CERTAIN PART OF DOCUMENT (WHICH HE BELIEVES TO BE TRUE) WHICH IS NO T FAVOURABLE TO THE REVENUE AND ACCEPT OTHER PART OF THE DOCUMENT WHICH IS FAVO URABLE TO REVENUE. THE CASES WHERE THE APPELLANT HAS SHOWN MORE SALE CONSIDERATI ON THAT WHAT IS RECORDED IN THE COMPUTER PRINT OUTS HAVE BEEN CONSIDERED BY ME. THE TOTAL SALE CONSIDERATION IN THIS REGARD WORKS OUT TO RS.63,766/-. ACCORDINGL Y I DIRECT THE AO TO TAKE NET CONSIDERATION OF RS.5,04,985/- INSTEAD OF RS.5,68,7 51/- TAKEN BY HIM. THE ADDITION MADE BY THE AO IS RESTRICTED TO RS.5,04,985/-. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 8. BEFORE US THE LD. A/R HAS FILED THE FOLLOWING SU BMISSIONS: THAT THE COMPUTER CONTAINED ONLY INITIAL OFFER MADE BY THE ASSESSEE TO THE PROSPECTIVE BUYERS AND WHICH WAS SUBJECT TO ADJUSTM ENT SUBSEQUENTLY. OUT OF THE ABOVE 12 INSTANCES IN SIX CASES THE PRIC E QUOTED IS MORE THAN SHOWN IN THE SALE DEED AND THE REMAINING 6 CASES THE ASSESSE E HAS SHOWN MORE CONSIDERATION THAN IN THE COMPUTER. THE LEARNED ASS ESSING OFFICER ADDED THE AMOUNT OF RS.5,68,751/- WHICH WAS IN HIS VIEW UNDER STATED IN THE SALE DEEDS. THE LEARNED ASSESSING OFFICER DID NOT GIVE BENEFIT OF T HE AMOUNT SHOWN MORE BY THE ASSESSEE IN THE SALE DEEDS. HOWEVER THE LEARNED CIT (A) CONSIDERING THE FACTS RESTRICTED THE ADDITION TO RS.5,04,985/- GRANTING R ELIEF OF RS.63,766/-. THE LEARNED ASSESSING OFFICER ERRED IN TREATING THE DETAILS OF SALE IN COMPUTER AS TRUE AND FINAL WHEREAS THESE DETAILS ITSELF WHEN VE RIFIED WITH REFERENCE TO SALE DEEDS DISCLOSED THAT THESE WERE NOT TRUE. IN SIX CA SES NOTED AT SR. NO. 2,4,5,7,8 & 9 THE CONSIDERATION SHOWN BY THE ASSESSEE IN THE SALE DEED WAS FAR MORE THAN NOTED IN THE COMPUTER. THIS ITSELF EVIDENCES THAT THE DET AILS IN COMPUTER WERE NOT FINAL. THE PRICES QUOTED IN THE COMPUTER SHEETS WERE ONLY OF THE INITIAL STAGE SUBJECT TO CHANGE SUBSEQUENTLY ON THE BASIS OF CUSTOMER TO CUS TOMER. IN VIEW OF THIS IT WAS PLEADED THAT THE COMPUTER SHEETS DID NOT CONTAIN TH E CORRECT SALE CONSIDERATION AND IT WAS WRONG ON THE PART OF THE LEARNED ASSESSI NG OFFICER TO ADOPT THE SAME AS THE CORRECT SALE CONSIDERATION AND THUS THE ADDI TION MADE ON THE BASIS OF THESE COMPUTER SHEET WAS ON THE WRONG FOOTING. 7 IT WAS VEHEMENTLY SUBMITTED BEFORE THE LEARNED ASSE SSING OFFICER AS WELL AS BEFORE THE LEARNED CIT(A) THAT IT WAS NOT UNCOMMON IN THE LINE OF THE REALITY BUSINESS TO KEEP TRACK OF THE PROSPECTIVE BUYERS AN D THE PRICES QUOTED BY THE ASSESSEE TO THEM. IT WAS IN THIS BACKGROUND THAT T HE ASSESSEE HAD ASSIMILATED CERTAIN DETAILS IN THE COMPUTER BUT THESE HAD HARDL Y ANY RELATION WITH ACTUAL TRANSACTION. THE PRICES QUOTED TO PROSPECTIVE BUYE RS WERE ALWAYS SUBJECT TO BARGAINING AND NORMALLY THE ASSESSEE HAD TO YIELD B EFORE THE BUYERS AND THEREFORE THE ACTUAL REALIZATION WAS LESS EXCEPT IN FEW CASES WHERE FOR THE PARTICULAR PROPERTY THE BUYERS WERE MORE AND AS SUCH THESE COU LD BE SOLD AT HIGHER PRICE THAN QUOTED INITIALLY. THE LEARNED ASSESSING OFFIC ER AS WELL AS THE LEARNED CIT(A) ERRED IN CONSIDERING THE FACTS OF THE CASE I N PROPER PERSPECTIVE. THE ADDITION MADE BY THE LEARNED ASSISSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) DESERVES SHEET WERE FINAL THEN HOW IT COULD BE THAT IN 50% OF THE CASES (6 OUT OF 12 INSTANCES) THE SALES CONSIDERATION SHOWN IN THE SALE DEED IS MORE THAN SHOWN IN THE COMPUTER SHEETS. THE ASSESSEE CANNOT BE ALLEGED TO UNDER STATE THE SALE CONSIDERATION BECAUSE IN THE SIX CASES HE HAS SHOWN MORE AND HIGHER SALE CONSIDERATION THAN FOUND NOTED IN THE COMPUTER. TH E ASSESSEE SUBMITTED THAT IN THE REMAINING CASES THE SALE WERE BARGAINED AND THE PRICE INITIALLY OFFERED WAS REDUCED AND THEREFORE IN SOME CASES THE SALE CONSID ERATION SHOWN IS LESS THAN FOUND NOTED IN THE COMPUTER SHEETS. CONSIDERING TH E TOTALITY OF FACTS IT IS LOUD AND CLEAR THAT THE COMPUTER SHEETS COULD NOT BE MADE BA SIS FOR UNDER STATEMENT OF SALES AND NO ADDITION COULD BE MADE ON THE BASIS OF THESE. IN VIEW OF THIS IT IS PLEADED THAT THE ADDITION MADE BY THE LEARNED ASSES SING OFFICER AND THAT SUSTAINED BY THE LEARNED CIT(A) MAY KINDLY BE DELET ED. A COPY OF LETTER DATED 26.11.2007 ADDRESSED TO THE ASSESSING OFFICER IS AV AILABLE ON PAPER BOOK PAGE NO.8 TO 10. 9. ON THE OTHER HAND THE LD. D/R RELIED ON THE ORDE R OF LD. CIT (A). 10. WE HAVE HEARD BOTH THE PARTIES. THE A.O. HAS NO TICED THAT MAINTAINANCE CHARGES AS PER CHART WERE DIFFERENT THAN MAINTAINCE CHARGES ACTUAL PAID BY OF TWO PARTIES. HOWEVER IN THE SHOW CAUSE NOTICE THIS ADVERSE MATERIAL WAS NOT POINTED OUT. THE ASSESSEE HAS OFFERED AN EXPLANATION IN WHICH IT WAS STATED THAT IN THE CHART AVAILABLE IN COMPUTER, HE HAS TAKEN THE DIFFERENT RATES FOR DIFFERENT FLOOR. SUCH EXPLANATION WAS NOT SUBSTANTI ATED. WE ARE ALSO NOT HAVING THE CONSTRUCTED AREA OF SHOPS TO ASCERTAIN THAT THE CONTENTION OF T HE ASSESSEE IS CORRECT. HOWEVER THE LD. CIT HAS PERUSED THE COMPUTER PRINT AND HAS GIVEN VALID REAS ONS AS TO WHY SUCH DETAILS ARE NOT ESTIMATE BUT ACTUAL RECEIPTS. BEFORE US, THE LD. A/R HAS NOT FILED THE COPY OF COMPUTER PRINT TO SHOW THAT 8 FINDING OF LD. CIT (A) IS NOT CORRECT. WE THEREFORE FEEL THAT LD. CIT (A) HAS RIGHTLY UPHELD AN ADDITION TO THE EXTENT OF RS.5,04,985/- 11. THE THIRD GROUND OF APPEAL IS AGAINST THE DISAL LOWANCE OF RS.4,14,000/- U/S 40 (A)(IA). 12. BEFORE THE LD. CIT (A), IT WAS SUBMITTED THAT A .O. HAS WRONGLY PRESUMED THAT SH. LAKHANJI WAS A LABOUR CONTRACTOR TO WHOM PAYMENT OF RS.4,14,000/- WAS MADE. ACCORDING TO ASSESSEE, SH. LAKHANJI WAS SUPERVISOR WORKING IN TH E PROJECT OF THE ASSESSEE. THE PAYMENTS WERE MADE TO THE LABOURERS AND FEW VOUCHERS WERE PRODUCE D. 13. THE LD. CIT (A) UPHELD THE ADDITION AFTER OBSER VING AS UNDER: AS REGARDS PAYMENT OF RS.4,14,000/- MADE TO SH. LAK HANJI, I FIND THAT THE APPELLANT HAS MERELY TRIED TO CHANGE THE NOMENCLATU RE WITHOUT SUBSTANTIATING HIS CLAIM THAT PAYMENT TO SH. LAKHANJI WAS NOT A CONTRA CTUAL PAYMENT. THERE IS ESSENTIALLY NO DIFFERENCE BETWEEN A LABOUR CONTRACT OR OR LABOUR SUPERVISOR. BOTH OF THEM ARE REQUIRED TO BRING LABOURERS TO COMPLETE A PARTICULAR WORK. AFTER RECEIVING PAYMENT FROM THE PRINCIPAL, THEY ARE RESP ONSIBLE TO MAKE THE PAYMENTS TO INDIVIDUAL LABOURERS. THE AO HAS CATEGORICALLY M ENTIONED IN THE ASSESSMENT ORDER THAT PAYMENTS WERE NOTED AGAINST HIS NAME. EV EN IF HE IS ALLEGED TO BE A SUPERVISOR, THEN THERE IS NO PAYMENT OF FIXED SALAR Y TO HIM. EVEN OTHERWISE, THE ASSESSEE IS LIABLE TO DEDUCT TDS ON SALARY PAYMENTS . THE ASSESSEE HAD SUBMITTED BEFORE AO VIDE LETTER DATED 5.10.07 THAT IT HAD MAI NTAINED ROUGH RECORD OF ATTENDANCE OF LABOURERS. I DONT THINK THAT ANY SAN CTITY COULD BE ATTACHED TO ROUGH RECORDS. ON THE OTHER HAND, IN THE ACCOUNTS SUBMITT ED BEFORE THE AO, THE PAYMENTS WERE NOTED AGAINST THE NAME OF SH. LAKHANJ I. EVEN SOME OF THE VOUCHERS WERE SIGNED BY SH. LAKHANJI AS NOTED BY TH E AO. DATE OF VOUCHER AMOUNT NAME OF RECIPIENT VOUCHER DATED 15.9.04 RS.19,000/- PAID TO SH. LAKHA NJI VOUCHER DATED 03.10.04 RS.19,000/- PAID TO SH. LAKH ANJI VOUCHER DATED 10.10.04 RS.18,000/- PAID TO SH. LAKH ANJI VOUCHER DATED 29.10.04 RS.18,500/- PAID TO SH. LAKH ANJI VOUCHER DATED 01.12.04 RS.17,500/- PAID TO SH. LAKH ANJI VOUCHER DATED 17.12.04 RS.16,500/- PAID TO SH. LAKH ANJI VOUCHER DATED 11.01.05 RS.17,000/- PAID TO SH. LAKH ANJI 9 FROM THE ABOVE, IT IS CLEAR THAT IN THE BOOKS OF AC COUNT OF ASSESSEE, PAYMENTS HAD BEEN MADE TO SH. LAKHANJI AND NOT TO INDIVIDUAL LAB OURERS. THE AO ALSO NOTED THAT SH. LAKHANJI HAD SUBMITTED DETAILS OFTOTAL WOR KING DAYS OF MISTRY, BELDAR AND COOLIED AND ON THAT BASIS, HE HAD MADE BILLING TO T HE ASSESSEE. THE ASSESSEE HAS NOT DONE ANYTHING TO CONTROVERT THE ABOVE FINDINGS OF THE AO. ON THE OTHER HAND, THE CLAIM OF THE APPELLANT THAT SH. LAKHANJI WAS A SUPERVISOR, REMAINS UNSUBSTANTIATED. ACCORDINGLY I HOLD THAT THE AO WAS RIGHT IN DISALLOWING AMOUNT OF RS.4,14,000/- U/S 40 (A) (IA) OF THE I.T. ACT. T HE ADDITION MADE BY THE AO IS CONFIRMED AND THIS GROUND OF APPEAL IS DISMISSED. 14. WE HAVE HEARD BOTH THE PARTIES. NO MATERIAL EVI DENCE TO SHOW THAT LAKHANJI WAS AN EMPLOYEE. THE ASSESSEE COULD HAVE PRODUCED LAKHANJI IF HE WAS AN EMPLOYEE. WE, THEREFORE, FEEL THAT LD. CIT (A) WAS JUSTIFIED IN UPHOLDING THE ADD ITION OF RS.4,14,000/- 15. THE FIFTH GROUND OF APPEAL OF THE ASSESSEE IS T HAT LD. CIT (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.54,649/-. 16. THE LD. CIT (A) HAS CONFIRMED THE ADDITION AFTE R OBSERVING AS UNDER: AS REGARDS PAYMENTS OF RS.54,659/- MADE TO M/S. MAT ESHWARI FURNITURE HOUSE, I FIND THAT THE EXPLANATION SUBMITTED BY THE COUNSEL IS NOT COGENT. FROM THE PERUSAL OF LEDGER ACCOUNT OF M/S. MATESHWARI FURNITURE HOUS E, IT IS SEEN THAT THERE IS AN ENTRY OF PAYMENT OF RS.7,920/- IN RESPECT OF RAM MA NDIR FLAT. HOWEVER IT DOES NOT MAKE ANY DIFFERENCE BECAUSE THE TDS DEDUCTIBLE UNDE R SECTION 194C IS FROM THE SUMS CREDITED TO THE ACCOUNT OR PAID TO THE CONTRAC TOR. WHEN THE AMOUNT CREDITED TO THE CONTRACTORS ACCOUNT IS RS.54,659/-, THE ASS ESSEE IS LIABLE TO DEDUCT TDS ON THE ENTIRE THE AMOUNT CREDITED TO THAT ACCOUNT NOTW ITHSTANDING THAT PART OF IT RELATES TO SOME OTHER PROJECT. FURTHER THE AO HAD C ATEGORICALLY MENTIONED IN THE ASSESSMENT ORDER THAT AS ALLEGED BY THE ASSESSEE PA YMENT OF RS.7,920/- IN CASH ON 8.1.05 WAS NOT DEBITED TO THE ACCOUNT OF RAM MANDIR FLAT. THERE IS NO PLAUSIBLE EXPLANATION FOR THE SAME. ACCORDINGLY IT IS CLEAR T HAT ENTIRE PAYMENT OF RS.54,659/- WAS MADE TO M/S. MATESHWARI FURNITURE H OUSE AND ASSESSEE WAS LIABLE TO DEDUCT TDS ON THE SAME. FOR M/S. MATESHWA RI FURNITURE HOUSE, THE WHOLE RECEIPTS OF RS.54,659/- OR PART OF IT FORMED ITS INCOME. WITHOUT PREJUDICE TO THE ABOVE, RELIANCE IS PLACED ON THE DECISION OF TH E SUPREME COURT IN THE CASE OF TRANSMISSION CORPORATION OF A.P. LTD. V. CIT (239 I TR 587) WHEREIN IT WAS HELD THAT THE SCHEME OF TAX DEDUCTION AT SOURCE APPLIED NOT ONLY TO THE AMOUNT PAID WHICH WHOLLY BEARS INCOME CHARACTER, BUT ALSO TO GR OSS SUMS, THE WHOLE OF WHICH MAY NOT BE INCOME OR PROFITS OF THE RECIPIENTS. ACC ORDINGLY I HOLD THAT THE AO WAS RIGHT IN DISALLOWING AMOUNT OF RS.54,659/- U/S 40 ( A)(IA) OF THE I.T. ACT. THE ADDITION MADE BY THE AO IS CONFIRMED AND THIS GROUN D OF APPEAL IS DISMISSED. 10 17. WE HAVE HEARD BOTH THE PARTIES. THE A.OS OBJEC TION IS THAT RS.7,920/- HAS NOT DEBITED IN M/S. RAM MANDIR FLAT. SINCE ASSESSEE DEBITED THE EX PENDITURE, HERE, THEN IT COULD NOT HAVE DEBITED THERE. THE A.O. OR LD. CIT (A) HAS NOT RECO RDED A FINDING THAT EXPENDITURE DOES NOT RELATE TO M/S. RAM MANDIR FLAT. HENCE RS.7,920/- IS NOT AL LOWABLE. THE BALANCE SUM IS LESS THAN RS.50,000/- AND HENCE NO TAX WAS REQUIRED TO BE DED UCTED. HENCE THE ADDITION OF RS.54,559/- IS REDUCED TO RS.7,920/-. 18. THE SIXTH GROUND OF APPEAL IS THAT LD. CIT (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,31,400/- ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,31,400/-. THE LD. CIT (A) HAS CONFIRMED THE ADDITION AFTER OBSERVING AS UNDER: AS REGARDS PAYMENTS OF RS.1,31,400/- MADE TO SH. MO HAMMED RAEES AND RS.1,20,957/- MADE TO M/S S.S. ROLLING SHUTTER WORK S, THERE IS NO DOUBT THAT PAYMENTS WERE CONTRACTUAL. HOWEVER IN THE LEDGER AC COUNT OF SH. MOHAMMED RAEES AND M/S ROLLING SHUTTER WORKS, THE ASSESSEE H AS ITSELF GIVEN NARRATION LABOUR CHARGES IN ITS ACCOUNTS. THE BILL OF SH. M OHAMMED RAEES WAS ALSO PERUSED AND HE IS INTERIOR DECORATOR AND CONTRACTOR . HE SPECIALIZES IN FABRICATION WORK. THE BILLING HAS BEEN DONE FOR 1800 RUNNING FE ET AND PAYMENT OF RS.1,31,400/- WAS MADE TO HIM AT THE RATE OF RS.73. 49 PER RUNNING FEET. IT APPEARS TO BE A COMPOSITE CONTRACT. THE RELIANCE PLACED BY THE AO ON THE DECISION OF ESSAR OIL LTD. (77 ITD 92) IS APPROPRIATE WHEREIN I T WAS HELD THAT PROVISIONS OF SECTION 194C ARE APPLICABLE TO THE MATERIAL AND LAB OUR CONTRACTS. I DO FIND CONSIDERABLE FOR IN THE ARGUMENTS OF THE AO THAT TH E CONTRACT WAS MORE OF A MATERIAL FABRICATED ACCORDING TO THE DESIGN AND SPE CIFICATION PROVIDED BY THE ASSESSEE RATHER THAN STRAIGHT AWAY PURCHASE OF MATE RIAL. ON THE SAID CONTRACT, THE ASSESSEE WAS LIABLE TO DEDUCT TDS. IN THE CASE OF A SSOCIATED CEMENT CO. LTD. V. CIT ( 201 ITR 435 ), THE HONBLE SUPREME COURT HAS LAID DOWN THAT THE PROVISIONS OF SECTION 194C ARE APPLICABLE TO ALL TY PES OF CONTRACTS FOR CARRYING OUT ANY WORK, SUCH AS TRANSPORT CONTRACTS, SERVICE CONTRACTS, LABOUR CONTRACTS, MATERIAL CONTRACTS AS WELL AS WORKS CONTRACTS ACCOR DINGLY I HOLD THAT THE AO WAS RIGHT IN DISALLOWING AMOUNT OF RS.1,31,400/- U/S 40 (A) (IA) OF THE I.T. ACT. THE ADDITION MADE BY THE AO IS CONFIRMED AND THIS GROUN D OF APPEAL IS DISMISSED. SIMILARLY THE CONTRACT WITH M/S. S.S. ROLLING SHUTT ER ENGINEERING. WORKS WAS ALSO A COMPOSITE CONTRACT WHEREBY IT INSTALLED ROLLING S HUTTERS AT THE PROJECT SITE OF THE ASSESSEE. THE SHUTTERS WERE MANUFACTURED AS PER REQ UIREMENT AND SIZES GIVEN BY THE ASSESSEE WHICH WERE THEN AFFIXED AT THE LOCATIO N OF THE PROJECT OF THE ASSESSEE. ON THE SAID CONTRACT, THE ASSESSEE WAS LIABLE TO DE DUCT TDS. ACCORDINGLY I HOLD THAT THE AO WAS RIGHT IN DISALLOWING AMOUNT OF RS.1 ,20,957/- U/S 40 (A) (IA) OF THE 11 I.T.ACT. THE ADDITION MADE BY THE AO IS CONFIRMED A ND THIS GROUND OF APPEAL IS DISMISSED. 19. WE HAVE HEARD BOTH THE PARTIES. WE HAVE PERSUED THE VOUCHER AND VOUCHER SHOWS PAYMENT PER FEET OF RAILING. HENCE IT APEARS TO BE A CONTRACTUAL PAYMENT AND HENCE LD. CIT (A) WAS JUSTIFIED IN CONFIRMING ADDITION OF RS.1,31,000 /-. 20. THE SEVENTH GROUND OF APPEAL IS THAT LD. CIT (A ) HAS ERRED IN CONFIRMING THE ADDITION OF RS.1,20,957/-. 21. WE HAVE HEARD BOTH THE PARTIES. VOUCHERS ARE AV AILABLE AT PAGES 16 TO 19 OF THE PAPER BOOK. IT IS CLEAR FROM THE VOUCHERS THAT SHUTTERS H AVE BEEN SUPPLIED AND THE RATE HAS BEEN CHARGED ON THE BASIS OF WEIGHT CONTAINED IN A SHUTT ER. HENCE S.S. ROLLING CENTRE MANUFACTURED CERTAIN SHUTTERS FOR THE ASSESSEE. IT IS A CASE OF OUTRIGHT SALE AND IT IS NOT A CONTRACTUAL PAYMENT. HENCE THE LD. CIT (A) WAS NOT JUSTIFIED IN CONFIRMI NG THE ADDITION OF RS.1,20,957/-. 22. THE ELEVENTH GROUND OF APPEAL IS THAT LD. CIT ( A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.37,828/-. 23. THE LD. CIT (A) HAS CONFIRMED THE ADDITION AFTE R OBSERVING AS UNDER: IN THE 13 TH GROUND OF APPEAL, THE APPELLANT HAS CHALLENGED THE ADDITION OF RS.37,828/- BEING 50% OF BORING INSTALLATION EXPENS ES AND HOLDING THE SAME AS EXPENSE NOT INCIDENTAL TO BUSINESS OF THE ASSESSEE. BEFORE ME, THE COUNSEL OF THE APPELLANT SUBMITTED THAT LEARNED ASSESSING OFFICER HAS MADE THE DISALLOWANCE OF 50% OF EXPENDITURE ON BORING ON THE GROUND THAT PAR T OF THE EXPENDITURE WAS RELATED TO RAM MANDIR FLAT. THE ACTION OF THE LEARN ED ASSESSING OFFICER IS BASED ON GUESS WORK. THERE IS NO MATERIAL ON RECORD TO IN DICATED THAT BORING WAS TO BE SHARED WITH RAM MANDIR FLAT. IN THE BACK GROUND OF THESE FACTS, THE ENTIRE EXPENDITURE WAS ALLOWABLE. IT WAS PRAYED THAT THE A DDITION MADE BY THE LEARNED ASSESSING OFFICER DESERVED TO BE DELETED. I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APPEL LANT. THE TRUTH IS THAT THE VERSION OF THE APPELLANT IS SELF SERVING AND SAME R EMAINS UNSUBSTANTIATED. ON THE OTHER HAND, THE DISALLOWANCE MADE BY THE AO WAS ON EXAMINATION OF CONSTRUCTION 12 ACCOUNT. THE AO HAD ALSO EXAMINED THE BILLS AND VOU CHERS. BEFORE ME, THE COUNSEL OF APPELLANT HAS NOT FURNISHED THE VOUCHERS AND HIS WHOLE CASE IS BASED ON WRITTEN ARGUMENTS. THE ASSESSEE HAD OFFERED INCO ME ON ACCOUNT OF RAMA HERITAGE AND BY NO STRETCH OF IMAGINATION, IT COULD CLAIM EXPENSES OF OTHER PROJECT. ACCORDINGLY I HOLD THAT THE AO WAS RIGHT I N DISALLOWING EXPENSES OF RS.37,827/- AS THESE WERE NOT INCIDENTAL TO ITS BUS INESS. THE ADDITION MADE BY THE AO IS CONFIRMED AND THIS GROUND OF APPEAL IS DISMIS SED. 24. AFTER HEARING BOTH THE PARTIES, WE FEEL THAT LD . CIT (A) WAS JUSTIFIED IN CONFIRMING THE ADDITION. 25. THE TWELVETH GROUND OF APPEAL IS THAT LD. CIT ( A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.3,15,750/-. I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE ASSES SEE. THE CASE OF THE AO WAS THAT THE ASSESSEE HAD PURCHASED 2998 SQ FT OF GRANI TE FROM M/S R R ROCKS PVT. LTD, SURYAPET. THE AO MADE AN INQUIRY FROM THE MARK ET AND NOTED THAT AVERAGE WEIGHT OF GRANITE BEING 3.33KG PER SQ FT, THE TOTAL WEIGHT OF GRANITE COULD NOT HAVE BEEN MORE THAN 9.983 TONNES. HOWEVER WHEN SAME WAS WEIGHED AT KRISHNA DHARM KANTA, JAIPUR, THE TOTAL WEIGHT OF GRANITE WA S FOUND AT 31.30 TONNES. THE AO THEREFORE INFERRED THAT THE ASSESSEE HAD PURCHAS ED 21.30 TONNES OF GRANITE OUTSIDE THE BOOKS OF ACCOUNT. TAKING THE AVERAGE PU RCHASE PRICE AT RS.50 PER SQ FT AS PER THE BILL OF M/S R R ROCKS PVT. LTD., THE AO HELD THAT THE ASSESSEE HAD NOT ACCOUNTED FOR 6315 SQ FT (21.30 TONNES) OF GRANITE AMOUNTING TO RS.3,15,750/- IN ITS BOOKS OF ACCOUNTS. THERE ARE THREE EVIDENCES WH ICH CLICH THE ISSUE IN FAVOUR OF REVENUE: THE WEIGHTMENT SLIP OF M/S KRISHNA DHARAM KANTA, VK I AREA, JAIPUR SHOWING TOTAL WEIGHT OF GRANITE AT 31.030 TONNES. THE WEIGH MENT SLIP SHOWS SEQUENCE NO. 0420 AND RECEIPT NUMBER IS 93. IT GIVES WEIGHT OF T RUCK AT 40220 KG ON 29/4/04 AT 12.49 PM AND WEIGHT OF TRUCK AFTER UNLOADING MARBLE AT 9190 KG ON 29.4.04 AT 18.04 PM. THE MARBLE WHICH WAS UNLOADED WORKS OUT T O 31030 KG. THE TRUCK NO. IS RJ21G1433. ALL OTHER DETAILS MATCH EXCEPT WEIGHT OF MARBLE. THE G.R. NO. 10228 OF MODERN TRANSPORT COMPANY MENT ION THE RATE OF TRANSPORTATION AT RS.14,500/- PER 10 TONNES. THE AS SESSEE HAD DEBITED RS.44,495/- IN ITS BOOKS OF ACCOUNTS ON ACCOUNT OF FREIGHT PAID FOR TRANSPORTATION OF GRANITE. THE AMOUNT OF RS.44,495/- WAS PAID IN CASH ON 30-4- 04. THIS AMOUNT HAS ALREADY BEEN DISALLOWED BY THE AO U/S 40(A)(IA) OF THE I.T. ACT. THIS EVIDENCE PROVES THAT THE ASSESSEE HAD PURCHASED AND TRANSPORTED 31.030 T ONNES OF GRANITE. I HAVE ALSO EXAMINED THE VOUCHER. IT IS SEEN THAT ON TOP OF VOU CHER DATED 29/4/04, THE FREIGHT 13 CHARGES HAVE BEEN WORKED OUT AS UNDER 31.030 TON X 1450 PER TON= RS.44,993/-. THE VOUCHER FOR LABOUR CHARGES DATED 29/4/04 ALSO G IVES WORKING FOR 31 TONNES. AT RATE OF RS.40 PER TON, THE LABOUR CHARGES OF RS. 1240/- WERE PAID. THE INFERENCE OF THE AO WAS LOGICAL BECAUSE THE DIR ECTOR OF THE APPELLANT COMPANY SH. JAGDISH NARAIN CHIPPA ADMITTED IN RESPO NSE TO QUESTION NO 7 AND 8 IN HIS STATEMENT RECORDED ON 5-11-07 BEFORE THE AO THAT THE ASSESSEE COMPANY HAD PURCHASED 31 TONNES OF GRANITE AND SAME QUANTIT Y WAS RECEIVED BY THEM. IT WAS FURTHER ADMITTED THAT SALES TAX WAS PAID FOR PU RCHASE OF 31 TONNES OF GRANITE. IT WAS ALSO ADMITTED THAT SOME PAYMENT WAS ALSO MAD E BY THEIR SISTER CONCERN M/S RAMA HANDICRAFTS. THE STATEMENT OF SH. JAGDISH NARA IN CHIPPA RECORDED ON 5.11.07 IS RE-PRODUCED AS UNDER. IZ'U&ESA VKIDKS MODERN TRANSPORT CO. DK FNUKAD 25-4-2004 DK G.R. UECJ 10228 FN[KK JGK GWW BLDS VUQLKJ TRUCK NO.RJ21G1433 DS }KJK NL VU XZSUKBZV SURYAPET VKU/KZ IZNS'K LS T;IQJ JOKUK GQVK FKKA BLH DS VUQ: I RR ROCK DS FCY HKH GS FDURQ FNUKAD 29.4.2004 DKS NKSIGJ 12%49 CTS TC TRUCK NO. RJ 21G 1433 DK OTU D`'.KK /KEZ DKWAVS IJ DJOK;K X;K RKS D QY OTU 40 GTKJ NKS LKS CHL 40220 KG FKKA VD [KKYH GKSUS IJ FNUKAD 29-4-2004 DKS 'KKE 6%04 FEUV IJ [KKYH VD DK OUT 9100 KG FKKA BL RJG VKIDS IKL VK;S XZSUKBZV DK DQY OTU 31030 KG FKKA VFKZKR 31-03 VU FKK TCFD CGH [KKRS ,OA FCY DS VUQLKJ 10 VU FKK BLDS CKJS ESA VKI VIUK LI'VHDJ.K NSOSA MRJ& ESJS FGLKC LS 31 VU EKY GH [KJHNK X;K FKK OGH EKY PY DJ DS VK;K GS MRUS GH EKY DH SALES TAX DH JLHN DVH] MRJKBZ NH XBZ MLH DK [KKRKSA ESA BUNZKT GS MLH DK HKQXRKU FD;K X;K FCYVH ESA TKS NL VU FN[KK;K GS MLDK EQ>S IRK UGHAA MIJKSDR C;KU ESUSA IW.KZ GKS'KKS GOKL ESA FCUK FDLH NCKO DS IZLUU FPR] FLFKJ CQF} LS FN;S GSA BUGSA ESAUS I<+ FY;K GSA LGH IK;S X;S ESA BLDH RLNHD DJRK GWWA IN VIEW OF THIS CATEGORICAL ADMISSION BY THE DIRECT OR OF ASSESSEE COMPANY AND OTHER EVIDENCES SUCH AS WEIGHMENT SLIP, FREIGHT CHA RGES, LABOUR CHARGES, I HOLD THAT AO WAS RIGHT IN HOLDING THAT THE ASSESSEE HAD NOT ACCOUNTED FOR PURCHASE OF RS.3,15,750/- IN ITS BOOKS OF ACCOUNTS. ACCORDINGLY THE ADDITION MADE BY THE AO IS CONFIRMED AND THIS GROUND OF APPEAL IS DISMISSED . 26. WE HAVE HEARD BOTH THE PARTIES. SURVEY WAS COND UCTED ON 10.3.2006 WHILE STATEMENT OF DIRECTOR WAS RECORDED ON 5.1.2007. IT MEANS THE STA TEMENT HAS BEEN RECORDED DURING THE COURSE 14 OF ASSESSMENT PROCEEDINGS. NO REBUTTAL FILED BEFORE LD. CIT (A). HENCE WE FEEL THAT LD. CIT (A) WAS JUSTIFIED IN CONFIRMING THE ADDITION. IN THE RESULT THE APPEAL IS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN OPEN COURT ON 25.01.201 2 SD/- SD/- (R.K.GUPTA) (N.L.KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25.01.2012 *S.KUMAR* COPY FORWARDED TO:- 1. GAJANAN TOWERS PVT. LTD., NAHARGARH ROAD, JAIPUR . 2. INCOME TAX OFFICER, WARD-4(1), JAIPUR. 3. THE CIT 4. THE CIT(A), 5. THE D/R, ITAT, JAIPUR 6. THE GUARD FILE IN ITA NO.1432/JP/2010 BY ORDER A.R., I.T.A.T., JAIPUR