Shri. Kalyan Jagannath Jadhav, Pune V. Dy. CIT, Cen Cir.1[2] Pune, Pune

ITA 1555/PUN/2012

• Counselvise Citation: 155524514 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 12-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 17-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA
• Assessee Lawyers: C D UPASANI
• Keywords: Depreciation; Search and seizure; Corroborative evidences; Revised return
• Section: 40A(3); 143(3); 153A; 139(5); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO S. 1555 & 1556 / P N/ 20 1 2 ASSESSMENT YEAR S : 200 7 - 08 & 200 8 - 09 SHRI KALYAN JAG ANNATH JADHAV, 408/10, PURANDAR COMPLEX, INDUSTRIAL ESTATE, MUKUNDNAGAR, PUNE VS. DY. CIT, CENTRAL CIRCLE - 1(2), PUNE (APPELLANT) (RESPONDENT) PAN NO. AAXPJ1946R APPELLANT BY: S HRI C.D. UPASANI RESPONDENT BY: SHRI MUKESH VERMA DATE OF HEARING : 12 - 03 - 2014 DATE OF PRONOUNCEMENT : 26 - 03 - 2014 ORDER P ER R.S. PADVEKAR , JM : - TH ESE TWO APPEAL S ARE FILED BY THE ASSESSEE CHALLENGING THE RESPECTIVE IMPUGNED ORDER S OF THE LD. CIT(A) - CENTRAL, PUNE DATED 31 - 0 5 - 201 2 FOR THE A.Y S . 200 7 - 08 & 200 8 - 09 . 2. WE FIRST TAKE THE APPEAL OF THE ASSESSEE FOR THE A.Y. 2007 - 08. THE G ROUND NO. 1 READS AS UNDER: 1. THE LEARNED CIT (A) CENTRAL, PUNE HAS ERRED IN APPLYING THE RATIO OF SUNCITY ALLOYS (P) LTD. VS. ACIT (2009) 27 DTR 139 AND NOT GRANTING DEDUCTION U/S. 24( B). 3. THE BRIEFLY STATED FACTS ARE AS UNDER. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION, DEVELOPMENT OF INFRASTRUCTURE FACILITY AND OF POWER GENERATION. THE SEARCH AND SEIZURE OPERATION U/S. 132(1) OF THE INCOME - TAX ACT WAS CARRIE D OUT AGAINST THE ASSESSEE ON 23 - 12 - 2009 AT THE BUSINESS PREMISES OF THE COMPANY IN WHIC H THE ASSESSEE WAS A DIRECTOR AND HE WAS ALSO COVERED IN THE SAID SEARCH AND SEIZURE OPERATION. THE ASSESSEE WAS ISSUED THE NOTICE S U/S. 153A OF THE I.T. ACT 2 ITA N OS. 1555 & 1556/PN/2012, SHRI KALYAN JAGANNATH JADHAV, PUNE AND THE A SSESSEE FILED THE RETURN S OF INCOME DECLARING TOTAL INCOME OF RS.6,20,87,338/ - . THE ASSESSMENT OF THE ASSESSEE WAS FINALIZED U/S. 143(3) R.W.S. 153A OF THE ACT BY MAKING CERTAIN ADDITIONS . I N RESPECT OF GROUND NO. 1 T HE GRIEVANCE OF THE ASSESSEE IS THAT THE ASSESSEE HAS MADE THE CLAIM OF RS.608/ - U/S. 24(A) OF THE ACT TOWARDS THE INTEREST WHICH WAS NOT MADE IN THE ORIGINAL RETURN BUT THE SAME WAS NOT ALLOWED. THE ARGUMENT OF THE LD. COUNSEL IS THAT THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO NOTICE U /S. 153A IS A REVISED RETURN AND HENCE, IN THE REVISED RETURN EVEN IF THE NEW CLAIM IS MADE, THE SAME SHOULD HAVE BEEN CONSIDERED AND ALLOWED. 3.1. WE ARE UNABLE TO UNDERSTAND THE ARGUMENT OF THE LD. COUNSEL. SO FAR AS REVISED RETURN IS CONCERNED, THE SAME IS COVERED U/S. 139(5) OF THE ACT AND NOT U/S. 153A. THE RETURN FILED IN RESPONSE TO NOTICE U/S. 153A IS ONLY IN CONSEQUENCE OF THE SEARCH AND SEIZURE OPERATION AND NOT BECAUSE THERE IS ANY MISTAKE. AS PER THE SCHEME OF THE ACT ONLY AFTER THE SEARCH AND SEIZURE ACTION AGAINST THE ASSESSEE , T HE ASSESSEE IS ISSUED NOTICE U/S. 153A FOR FILING THE RETURN OF INCOME. MOREOVER, NOWHERE IT IS THE CASE OF THE ASSESSEE THAT THERE WAS ANY PENDING ASSESSMENT FOR THE A.Y. 2007 - 08 AT THE TIME OF SEARCH WHICH WAS ABATED. WE FIND NO MERIT IN THE GROUND TAKEN BY THE ASSESSEE. ACCORDINGLY, GROUND NO. 1 IS DISMISSED. 4. THE LD. COUNSEL SUBMITS THAT AS PER THE INSTRUCTION OF THE ASSESSEE HE IS NOT PRESSING GROUND NO. 2 WHICH IS IN RESPECT OF THE CLAIM OF DEPRECIATI ON PERTAINING TO THE COST OF WINDMILL. AS THE GROUND NO. 2 IS NOT PRESSED, THE SAME IS DISMISSED AS NOT PRESSED. 5. GROUND NO. 3 READS AS UNDER: 3. THE LEARNED CIT (A) CENTRAL, PUNE HAS UPHELD THE STAND OF THE LEARNED AO THAT PAYMENTS TO SUB - CONTRACTOR S ARE NON - GENUINE EVEN WHEN SUFFICIENT PROOF WAS SUBMITTED TO BOTH THE 3 ITA N OS. 1555 & 1556/PN/2012, SHRI KALYAN JAGANNATH JADHAV, PUNE LD. AO AS WELL AS THE LD. CIT (A) CENTRAL PUNE ABOUT THE GENUINENESS OF THE PAYMENTS. 5. 1. THE ISSUE IS IN RESPECT OF THE DISALLOWANCE OF SUB - CONTRACTORS EXPENDITURE OF RS.26, 08,780/ - IN THE CASE OF SHRI SANTOSH MASAL AND OF RS.18,43,432/ - IN THE CASE OF SHRI K.P. REDDY ON THE REASON THAT THE CLAIM OF EXPENDITURE WAS NON - GENUINE. THE ASSESSING OFFICER H AS DISCUSSED THIS ISSUE IN PARA NO. 6 IN RESPECT OF SHRI SANTOSH MASAL AND PARA NO. 7 IN RESPECT OF SHRI K.P. REDDY IN THE ASSESSMENT ORDER WHICH IS REPRODUCED AS UNDER: 6. DISALLOWANCE OF PAYMENTS TO SHRI SANTOSH MASAL: 6.1. TO VERIFY THE DETAILS OF SUBCONTRACTORS, SUMMONS U/S. 131 OF THE I.T. ACT WERE ISSUED TO SOME OF THEM AND STATEMENTS WERE ALSO RECORDED. THE LETTER DATED 17/11/2011 ISSUED TO SHRI SANTOSH MASAL IN THIS REGARD, HAS COME BACK UNSERVED WITH A NOTE LEFT ADDRESS. THE ASSESSEE WAS ASKED TO FURNISH THE LEDGER EXTRACT OF THE SAID PARTY IN ITS BOOKS AND ALSO T O PRODUCE THE RELEVANT BIILS/VOUCHERS. THE ASSESSEE WAS ALSO ASKED TO EXPLAIN WHY SHRI SANTOSH MASAL SHOULD NOT BE TREATED AS A BOGUS SUBCONTRACTOR AND TO SHOWCAUSE WHY THE AMOUNT PAID TO HIM OF RS.26,08,780/ - FOR A.Y. 2007 - 08 SHOULD NOT BE ADDED BACK TO THE TOTAL INCOME. 6.2. IN RESPONSE TO THE SAME, THE ASSESSEE, VIDE LETTER DATED 07/12/2011, SUBMITTED AS UNDER : THIS HAS REFERENCE TO OUR DISCUSSION WE ARE ENCLOSING HEREWITH THE DETAILS OF THE FOLLOWING TWO SUBCONTRACTORS FOR YOUR INFORMATION: SHRI SA NTOSH MASAL IS A LAND DEVELOPMENT CONTRACTOR, WHO HAD CARRIED OUT THE WORK OF EXCAVATION WORK MS PIPELINE PROJECT AT PARALI DURING THE F.Y. 2006 - 07 AND CIVIL WORK AT DOW CHEMICAL SITE, SHINDEGAON (CHAKAN) DURING F.Y. 2007 - 08. DETAILS OF BILLS AND PAYMENTS ARE AS FOLLOWS: F.Y. A.Y. AMOUNT OF BILL AMOUNT PAID CLOSING BALANCE 2006 - 07 2007 - 08 26,08,780 . 29,270 25,79,510 2007 - 08 2008 - 09 33,21,140 48,25,010 10,75,640 2008 - 09 2009 - 10 0 10,75,640 NIL 4 ITA N OS. 1555 & 1556/PN/2012, SHRI KALYAN JAGANNATH JADHAV, PUNE THE LEDGER EXTRACTS FOR ALL ABOVE PERIOD AND COPIES OF BILLS SUBMITTED BY SHRI SANTOSH MASAL ARE ENCLOSED HERE WITH FOR YOUR INFORMATION. UNFORTUNATELY THE PAYMENT VOUCHERS ARE NOT READILY AVAILABLE AND WE SHALL PRODUCE THE SAME WITHIN TWO DAYS. FROM THE FINANCIAL YEAR 2008 - 09 ONWARDS, NO SUBCON TRACTING WORK HAVE BEEN ALLOTTED TO SHRI SANTOSH MASAL BY KJ INFRASTRUCTURE PROJECTS (I) PVT. LTD. WE CAME TO KNOW THAT SHRI MASAL HAS CHANGED HIS RESIDENCE AND THAT MAY BE THE REASON FOR NON - SERVICE OF THE SUMMONS ISSUED TO HIM. WE ARE NOT AWARE OF HIS NE W RESIDENTIAL ADDRESS. HOWEVER, SINCE SHRI MASAL HAS UNDERTAKEN SUBCONTRACTING WORKS FROM M/S. K J JADHAV AND THE PAYMENTS MADE IN THIS REGARD ARE GENUINE, YOU ARE REQUESTED NOT TO MAKE ANY DISALLOWANCE ON THIS ISSUE. 6.3. THE ASSESSEE'S SUBMISSION HAS BEE N DULY CONSIDERED. THE COPIES OF BILLS OF SHRI MASAL WERE FURNISHED ALONGWITH THE LEDGER EXTRACTS FOR F.Y. 2006 - 07 TO 2008 - 09. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE PAYMENTS VOUCHERS OF SHRI MASAL, DESPITE BEING GIVEN TWO OPPORTUNITIES. FURTHER, A LE TTER HAS BEEN WRITTEN TO THE JURISDICTIONAL ASSESSING OFFICER OF SHRI SANTOSH MASAL TO FORWARD THE COPIES OF RETURNS FILED BY HIM FOR A.Y. 2007 - 08 TO A.Y. 2010 - 11. THE ITO, WARD 1(1), PUNE, VIDE LETTER DATED 09/12/2011, INFORMED THAT AS PER THE INFORMATIO N AVAILABLE ON RECORD, SHRI MASAL HAS NOT FILED THE RETURNS OF INCOME FOR THE RELEVANT YEARS. 6.4. IN VIEW OF THE ABOVE, THE AMOUNT OF RS.26,08,780/ - SHOWN TO BE PAID TO SHRI SANTOSH MASAL FOR THE SUBCONTRACTING WORK IS HEREBY DISALLOWED AND ADDED BACK TO THE TOTAL INCOME. PENALTY PROCEEDINGS U/S 271( 1 )(C) ARE INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 7. DISALLOWANCE OF PAYMENTS TO SHRI K.P.REDDY : 7.1. SUMMONS U/S 131 ISSUED VIDE LETTER DATED 17/11/2011 TO ANOTHER SUBCONTRACTO R SHRI K.P. REDDY, HAS ALSO BEEN RETURNED BY POST WITH A NOTE 'LEFT ADDRESS'. THE ASSESSEE WAS ASKED IN FURNISH THE LEDGER EXTRACT OF THE SAID PARTY IN ITS BOOKS AND ALSO TO PRODUCE THE RELEVANT BILLS/VOUCHERS. THE ASSESSEE WAS ALSO ASKED TO EXPLAIN 5 ITA N OS. 1555 & 1556/PN/2012, SHRI KALYAN JAGANNATH JADHAV, PUNE WHY D ISALLOWANCE SHOULD NOT BE MADE OUT OF THE AMOUNT PAID TO SHRI K.P. REDDY FOR A.Y. 2007 - 08. 7.2. IN RESPONSE TO THE SAME, THE ASSESSEE, VIDE LETTER DATED 07/12/2011, SUBMITTED AS UNDER: SHRI K P REDDY (PROP. SRIMAULI BUILDERS) IS A CONTRACTOR WHO CARRIED OUT THE EARTHWORK FOR PIPELINE PROJECT AT PARALI VAIJINATH, DIST: BEED DURING F.Y. 2006 - 07. DETAILS OF BILLS AND PAYMENTS ARE AS FOLLOWS: F.Y. A.Y. AMOUNT OF BILL AMOUNT PAID CLOSING BALANCE 2006 - 07 2007 - 08 35,90,140 17,46,708 18,43,432 2007 - 08 2008 - 09 0 18,43,432 0 THE LEDGER EXTRACTS FOR ALL ABOVE PERIOD AND COPIES OF BILLS SUBMITTED BY SHRI K.P. REDDY ARE ENCLOSED HERE WITH FOR YOUR INFORMATION. UNFORTUNATELY THE PAYMENT VOUCHERS ARE NOT READILY AVAILABLE AND WE SHALL PRODUCE THE SAME W ITHIN TWO DAYS. FROM THE FINANCIAL YEAR 2008 - 09 ONWARDS, NO SUBCONTRACTING WORK HAS BEEN ALLOTTED TO SHRI K.P. REDDY BY K J INFRASTRUCTURE PROJECTS (I) PVT. LTD. WE CAME TO KNOW THAT SHRI K P REDDY HAS CHANGED HIS RESIDENCE AND THAT MAY BE THE REASON FOR N ON - SERVICE OF THE SUMMONS ISSUED TO HIM. WE ARE NOT AWARE OF HIS NEW RESIDENTIAL ADDRESS. AS, SHRI K P REDDY, HAS UNDERTAKEN SUBCONTRACTING WORKS FROM M/S. K J JADHAV AND THE PAYMENTS MADE IN THIS REGARD ARE GENUINE, YOU ARE REQUESTED NOT TO MAKE ANY DISAL LOWANCE ON THIS ISSUE.' 7.3. THE ASSESSEE'S SUBMISSION HAS BEEN DULY CONSIDERED. THE COPIES OF BILLS OF SHRI MASAL WERE FURNISHED ALONGWITH THE LEDGER EXTRACTS FOR F.Y. 2006 - 7 & 2007 - 08. IT IS OBSERVED THAT AN AMOUNT OF RS.17,46,708/ - HAS BEEN PAID BY CHEQ UE TO SHRI K.P. REDDY DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE RECONCILED THE SAID AMOUNT IN THE BANK STATEMENTS AND BOOKS OF ACCOUNT FOR THE RELEVANT YEAR. HOWEVER, THE BALANCE AMOUNT OF RS.18,43,432/ - WAS PAID IN CASH DURING A. Y. 2008 - 09 AND A LL THE PAYMENTS WERE BELOW RS.20,000/ - TO AVOID THE PROVISIONS OF SEC 40A(3) OF THE ACT. THE ASSESSEE COULD NOT PRODUCE THE PAYMENTS VOUCHERS OF SHRI K.P.REDDY, DESPITE BEING GIVEN TWO OPPORTUNITIES. 6 ITA N OS. 1555 & 1556/PN/2012, SHRI KALYAN JAGANNATH JADHAV, PUNE 7.4. IN VIEW OF THE ABOVE, THE AMOUNT OF RS.18,43,432/ - SHOWN TO BE PAID TO SHRI K.P.REDDY FOR THE SUBCONTRACTING WORK IS HEREBY DISALLOWED AND ADDED BACK TO THE TOTAL INCOME. PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ASSESSEE CARRIED THE I SSUE BEFORE THE LD. CIT(A) AND LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER CONFIRMING THE DISALLOWANCE S AND THEREBY MAKING THE ADDITIONS. 6. IN RESPECT OF SHRI SANTOSH MASAL T HE LD. COUNSEL SUBMITS THAT THE ASSESSING OFFICER HAS ACKNOWLEDGE D I N HIS ORDER REGARDING SUBMISSION OF TH E LEDGER EXTRACTS FOR F.YS. 2006 - 07, 2007 - 08 AND 2008 - 09 ALONGWITH THE BILLS RAISED BY THE SUB - CONTRACTOR. HE SUBMITS THAT THE ASSESSING OFFICER FAIL ED TO NOTE THE FACT THAT TAX HAS BEEN DEDUCTED BY THE ASSESSEE WHILE MAKING THE PAYMENT TO SHRI SANTOSH MASAL. HE SUBMITS THAT THE ASSESSING OFFICER GOT CARRIED AWAY BY THE REPORT RECEIVED FROM THE JURISDICTIONAL ASSESSING OFFICER OF SHRI SANTOSH MASAL THAT HE HAS NOT FILED HIS RETURN OF INCOME. HE SUBMITS THAT THE FILIN G OF RETURN BY SHRI SANTOSH MASAL WAS NOT THE HANDS OF THE ASSESSEE. HE PLEADED FOR ALLOWING SAID EXPENDITURES. WE HAVE ALSO HEARD THE LD. DR , WHO SUPPORTED THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 7. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . IN RESPECT OF SHRI SANTOSH MASAL THE ASSESSEE HAS FILED THE COPY OF THE R.A. BILLS DATED 18 - 03 - 2007 IN WHICH THE DESCRIPTION OF THE WORK IS GIVEN AS EXCAVATION OF 2000 MM DAI MS PIPELINE PROJECT AT PARLI IN KM NO. 4/00 TO 5/00 AND THE R.A. BILLS AMOUNT IS SHOWN IS AT 26,08,780/ - . T HERE IS NO OTHER RUNNING BILL IN RESPECT OF SAID WORK. THERE IS NO PAYMENT ALSO MADE BY THE ASSESSEE IN RESPECT OF SAID BILL IN THE F.Y. 2006 - 07 RELEVANT TO A.Y. 200 7 - 08 . AS PER THE JOURNAL ENTRIES PASSED IN THE BOOKS OF AC COUNT , TDS AT RS.29,270/ - IS SHOWN PAYABLE. IN RESPECT OF TDS DEPOSIT THE COPY OF FORM NO. 16A IS PLACED IN THE COMPILATION AT PAGE NO. 26 IN 7 ITA N OS. 1555 & 1556/PN/2012, SHRI KALYAN JAGANNATH JADHAV, PUNE WHICH THE AMOUNT OF TAX IS SHOWN TO HAVE BEEN DEPOSITED ON 10 - 04 - 2007 BUT THE DATE OF CERTIFICATE IS 14 - 05 - 2008. IT IS SEEN THAT @ 1% THE TDS WAS DEPOSITED FROM THE ALLEGED RUNNING BILL OF SHRI SANTOSH MASAL. IN THE F.Y. 2007 - 08 THE ASSESSEE HAS SHOWN THE PAYMENT TO THE EXTENT OF RS. 48,25,010/ - WHICH IS ENTIRELY IN CASH. IN THE F.Y. 2007 - 08 THE ASSESSEE HAS SHOWN O NE MORE RUNNING BILL OF SHRI SANTOSH MASAL OF RS.33,21,140/ - . THE ASSESSEE HAS ALSO FILED THE LEDGER EXTRACT IN THE ASSESSEES BOOKS OF ACCOUNT WHICH IS AT PAGE NOS. 24 TO 29 IN RESPECT OF SHRI SANTOSH MASAL S A/C. AS PER THE LEDGER EXTRACT FILED BY THE ASSESSEE FROM HIS BOOKS OF ACCOUNT IT IS SEEN THAT ON DAILY BASIS FROM 02 - 04 - 2007 THE ASSESSEE HAS SHOWN THE PAYMENT IN CASH TO SHRI SANTOSH MASAL . NO VOUCHERS AND NO OTHER EVIDENCE IS FILED BY THE ASSESSEE . E VEN THE ANOTHER RUNNING BILL DATED 15 - 10 - 2007 IS ALSO COMPUTERIZED ONE AND TOTAL AMOUNT OF THE BILL IS SHOWN AT RS. 33,59,200/ - . THE LAW IS WELL SETTLED THAT THE B URDEN IS ON THE ASSESSEE TO PROVE THAT IN FACT EXPENDITURE IS A GENUINE EXPENDITURE BY FILING THE SUPPORTING EVIDENCE. THE ASSESSEE COULD NOT FILE A SINGLE VOUCHER EVEN BEFORE US TO SHOW THAT THE PAYMENT IS GENUINE . IT IS ALSO CERTAINLY STRANGE THAT SHRI SANTOSH MASAL SHOWN AS A LABOUR CONTRACT BUT HUGE OUTSTANDING AMOUNT TO THE EXTENT OF RS.26,08,780/ - IS SHOWN WHICH APPEARS TO BE THE ENT IRE AMOUNT OF THE BILL FOR THE F.Y. 2007 - 08 AND NOT A SINGLE PAYMENT IS MADE BUT IN THE F.Y. 2007 - 08 ON DAY - TO - DAY BASIS ON 12 - 04 - 2007 CASH PAYMENTS ARE SHOWN MADE TO SHRI SANTOSH MASAL. IN OUR OPINION THE CLAIM OF THE EXPENDITURE ITSELF IS A SUSPICIOUS A S THE ASSESSEE FAILED TO PROVE THAT THE SAID EXPENDITURE IS A GENUINE EXPENDITURE. MERELY BECAUSE 1% TDS IS DEPOSITED THAT ITSELF CANNOT BE THE EVIDENCE TO RELY TO HOLD THAT THE EXPENDITURE IS A GENUINE ONE AS BY DEPOSITING 1% OF THE EXPENDITURE , T HE ASSE SSEE CAN GET THE BENEFIT OF 99% OF THE AMOUNT OF EXPENDITURE . IN OUR OPINION BOTH THE AUTHORITIES BELOW HAVE RIGHTLY HELD THAT THE CLAIM OF THE EXPENDITURE TO SHRI SANTOSH MASAL IS NOT GENUINE 8 ITA N OS. 1555 & 1556/PN/2012, SHRI KALYAN JAGANNATH JADHAV, PUNE ONE. WE, THEREFORE, FIND NO REASON TO INTERFERE WITH THE ORDE R OF THE LD. CIT(A). 8. SO FAR AS THE PAYMENT MADE TO ANOTHER SUB - CONTRACTOR I.E. SHRI K.P. REDDY IT IS SEEN THAT THE SUMMONS WAS ISSUED U/S. 131 WHICH WAS RETURNED BY POST WITH A NOTE LEFT ADDRESS. IN THIS CASE IT IS SEEN THAT IN THE A.Y. 2007 - 08 THE TOTAL AMOUNT OF BILLS IS TO THE EXTENT OF RS.35,90,140/ - OUT OF THAT THE ASSESSEE HAS PAID DURING THE YEAR OF RS.17,46,708/ - AND BALANCE OUTSTANDING AMOUNT AT THE END OF THE YEAR IS TO THE EXTENT OF RS.18,43,432/ - WHICH HAS BEEN SHOWN AS PAID IN THE NEXT F INANCIAL YEAR. THE ASSESSEE HAS FILED THE COPY OF THE LEDGER EXTRACTS FOR THE F.Y. 2006 - 07. THE LD. COUNSEL ARGUE S THAT IN THIS CASE ALSO THE TDS WAS DEDUCTED AND PAYMENTS WERE MADE BY THE BANK CHEQUE S . THE LD. COUNSEL COULD NOT CONFIRM WHETHER THE PAYM ENTS WERE BY THE CROSS CHEQUE S OR BEARER CHEQUES TO SHRI K.P. REDDY . IN THIS CASE WE FIND THAT THE ASSESSING OFFICER HAS RECORDED THAT TO THE EXTENT OF RS.18,43,432/ - THE ASSESSEE PAID THE AMOUNT IN CASH SHOWING ALL THE PAYMENTS BELOW 20,000/ - . THE ASSES SEE COULD NOT PRODUCE THE PAYMENT VOUCHERS OF SHRI K.P. REDDY DESPITE GIVING THE OPPORTUNITIES. THE ARGUMENT OF THE LD. COUNSEL IS THAT MERELY BECAUSE THE SUMMONS COULD NOT BE SERVED ON SHRI K.P. REDDY THAT CANNOT BE THE REASON FOR DISBELIEVING THE CLAIM OF THE ASSESSEE. THE LD. COUNSEL FURTHER ARGUES THAT EXCEPT TH O SE TWO SUB - CONTRACTORS , ALL THE SUB - CONTRACT ORS HAVE APPEARED BEFORE THE ASSESSING OFFICER. IN THIS CASE ALSO THE CLEAR FACTS ARE NOT COMING OUT FROM THE ORDERS OF THE AUTHORITIES BELOW . WE CONSIDER IT FIT TO RESTORE THIS ISSUE ALSO TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. THE ASSESSEE SHOULD PLACE THE RELEVANT EVIDENCE TO SUBSTANTIATE THE CLAIM. ACCORDINGLY, THIS ISSUE IS ALSO RESTORE TO THE FILE OF THE ASSESSING OFFIC ER FOR FRESH ADJUDICATION. ACCORDINGLY, GROUND NO. 3 IS ALLOWED FOR THE STATISTICAL PURPOSES. GROUND NO. 4 GENERAL IN NATURE. 9 ITA N OS. 1555 & 1556/PN/2012, SHRI KALYAN JAGANNATH JADHAV, PUNE 9. NOW WE TAKE UP THE APPEAL FOR THE A.Y. 2008 - 09. GROUND NO. 1 IS IN RESPECT OF THE DEPRECIATION OF THE COST ON WINDMILL. TH E LD. COUNSEL SUBMITS THAT AS PER THE INSTRUCTION OF THE ASSESSEE HE IS NOT PRESSING GROUND NO. 1. AS GROUND NO. 1 IS NOT PRESSED, THE SAME IS DISMISSED AS NOT PRESSED. GROUND NO. 2 IS IN RESPECT OF DISALLOWANCE OF PAYMENTS MADE TO SUB - CONTRACTORS TREATI NG THE SAME AS NON - GENUINE. IN THIS YEAR THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE IN RESPECT OF THE EXPENDITURE CLAIM TO HAVE BEEN MADE TO SHRI SANTOSH MASAL, SUB - CONTRACTOR AND SHRI K.P. REDDY, SUB - CONTRACTOR. SO FAR AS SHRI SANTOSH MASAL IS CONC ERNED WE HAVE DEALT WITH THIS ISSUE IN THE A.Y. 2007 - 08 AND HAVE CONFIRMED THE DISALLOWANCE. IN THIS YEAR ALSO FOLLOWING OUR REASONS IN THE A.Y. 2007 - 08 WE CONFIRM THE DISALLOWANCE AND HOLD THAT THE ASSESSEE FAILED TO PROVE THAT SAID EXPENDITURE IS GENUIN E. THE ANOTHER DISALLOWANCE IS IN RESPECT OF THE PAYMENT MADE TO ONE SHRI KAILASH PATIL WHO IS ALSO CLAIM TO BE THE SUB - CONTRACTOR OF THE ASSESSEE. AS PER THE EXPLANATION FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER SHRI KAILASH PATIL IS A LABOUR CONTRACTOR, WHO HAVE CARRIED OUT THE LABOUR WORK FOR M/S. PIPELINE PROJECT AT PARALI FOR THE F.Y. 2007 - 08. THE TOTAL AMOUNT OF THE BILL IS SHOWN TO THE EXTENT OF RS.15,55,870/ - AND ENTIRE AMOUNT IS CLAIMED TO HAVE BEEN PAID IN THE SAME FINANCIAL YEAR. TH E ASSESSING OFFICER MADE THE DISALLOWANCE BY OBSERVING THAT THE ASSESSEE COULD NOT PRODUCE THE PAYMENT VOUCHERS OF SHRI KAILASH PATIL NO OTHER REASONS ARE GIVEN. THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER IN RESPECT OF THE DISALLOWANCE OF PAYMENT TO SHRI KAILASH PATIL. 10. WE HAVE HEARD THE PARTIES. IN THE CASE OF SHRI KAILASH PATIL, SUB - CONTRACTOR THE CLAIM OF EXPENDITURE IS ONLY IN THE A.Y. 2008 - 09 . AS PER THE COPY OF THE RUNNING BILL DATED 31 - 03 - 2008 (PAGE NO. 31 OF THE PAPER BOOK FO R A.Y. 2008 - 09) IT IS SEEN THAT THE SAID SHRI KAILASH PATIL WAS GIVEN THE SUB - CONTRACT FOR LAND DEVELOPMENT I.E. EXCAVATION IN HARD ROCK AND THE AMOUNT OF RUNNING BILL DATED 31 - 03 - 2008 IS SHOWN AT 10 ITA N OS. 1555 & 1556/PN/2012, SHRI KALYAN JAGANNATH JADHAV, PUNE RS.15,73,700/ - . THE ASSESSEE HAS FILED THE EXTRACT IN HIS LEDGER IN RESPECT OF THE ACCOUNT OF KAILASH J. PATIL WHICH IS PLACED AT PAGE NOS. 32 TO 34. ON THE PERUSAL OF THE SAID LEDGER EXTRACT IT IS SEEN THAT SHRI KAILASH J. PATIL HAS BEEN MADE THE CASH PAYMENTS AND OUTSTANDING AMOUNT IS AS ON 31 - 03 - 2008 IS SHOW N AT RS.8,60,870/ - . IN OUR OPINION THIS ISSUE ALSO NEEDS PROPER VERIFICATION REGARDING THE GENUINENESS OF THE PAYMENT. THE ASSESSEE HAS NOT FILED SINGLE VOUCHER BEFORE US ALSO NOR ANY OTHER EVIDENCE IN SUPPORT OF THE CLAIM OF THE EXPENDITURE TO SHRI KAIL ASH J. PATIL . M ERELY DEDUCTING THE TAX @ 1% CANNOT BE SAID TO BE THE SUPPORTING EVIDENCE AS WE HAVE TO TAKE INTO CONSIDERATION OVERALL CIRCUMSTANCES. WE, ACCORDINGLY, RESTORE THIS ISSUE ALSO TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION AN D THE ASSESSEE HAS TO DEMONSTRATE THAT THE PAYMENT IS GENUINE. THE ASSESSING OFFICER IS DIRECTED TO BRING ALL THE FACTS ON RECORD. ACCORDINGLY, GROUND NO. 2 IS ALLOWED FOR THE STATISTICAL PURPOSES. GROUND NO. 3 IS GENERAL IN NATURE. 1 1 . IN THE RESUL T, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR THE STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26 - 03 - 2014 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 26 TH MARCH, 2014 COPY TO 1 DEPARTMENT 2 ASSESSEE 3 THE CIT(A) - CENTRAL, PUNE 4 THE CIT - CENTRAL, PUNE 5 THE DR, ITAT, A BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TR IBUNAL PUNE