ITO, Ward-2(2), Kolkata, Asansol V. M/S. Maa Sarweshwari Construction, Jharkhand

ITA 174/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1106 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 13-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Assessee Lawyers: BINAY AGARWAL
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.174/KOL/2015 ASSESSMENT YEAR:2010-11 ITO WARD-2(2), ASANSOL, PARMER BULDING, 54, G.T. ROAD, ASANSOL-04 / V/S . MAA SARWESHWARI CONSTRUCTION, SINGH MANSION, RANCHI PATNA ROAD, KODERMA, JHUMRITALAIYA, JHARKHAND- 825409 [ PAN NO.AAOFM 9011 F ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SAURABH KUMAR, ADDL-CIT-DR /BY RESPONDENT SHRI BINAY AGARWAL, AR /DATE OF HEARING 24-10-2017 /DATE OF PRONOUNCEMENT 26-10-2017 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS IS AN APPEAL FILED BY THE REVENUE IS AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-ASANSOL FOR TH E ASSESSMENT YEAR 2010- 11, IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DATED 12.08. 2013. SHRI SAURABH KUMAR, LD. DEPARTMENTAL REPRESENTATIVE APPEARED ON BEHALF OF REVENUE AND SHRI BINAY AGARWAL, LD. AUTHORIZED REPR ESENTATIVE APPEARED ON BEHALF OF ASSESSEE. ITA NO.174/KOL/2015 A.Y. 2010-11 ITO WD-2(2) ASL VS. MAA SARWESHWARI CON STRN. PAGE 2 2. SOLE ISSUE RAISED BY REVENUE IS AS REGARD THAT L D. CIT(A) ERRED IN RESTRICTING THE ADDITION OF 45,38,955/- TO 6,80,843/- ONLY. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A PART NERSHIP FIRM AND ENGAGED IN MINING CONTRACTS. DURING THE YEAR, ASSESSEE HAS CLA IMED AN EXPENSE OF 45,38,955/- IN ITS PROFIT AND LOSS ACCOUNT TOWARDS HIRE CHARGES. HOWEVER, ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S FAILED TO SUBSTANTIATE ITS GENUINENESS OF THE SAID EXPENSES ON THE BASIS OF DO CUMENTARY EVIDENCE AND ALSO FAILED TO JUSTIFY WHETHER TAX WAS DEDUCTED AT SOURC E (TDS) U/S 194I OF THE ACT. THEREFORE, ASSESSING OFFICER DISALLOWED THE SAME AN D ADDED TO THE TOTAL INCOME OF ASSESSEE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). AT THE APPELLATE STAGE THE LD. CIT-A CALLED FOR REMAND REP ORT FROM AO. THE ASSESSEE AT THE REMAND STAGE SUBMITTED THAT THE PARTIES TO WHOM THE PAYMENT WAS MADE WAS LESS THAN RS. 20,000.00 THEREFORE THERE IS NO TDS L IABILITY. HOWEVER THE AO IN ITS REMAND REPORT SUBMITTED THAT ASSESSEE HAS NOT PRODUCED NECESSARY COPIES OF LEDGER JUSTIFYING THAT THE IMPUGNED EXPENSE IS OUTS IDE THE PURVIEW OF TDS PROVISION. HOWEVER, LD. CIT(A) RESTRICTED THE ADDIT ION @ 15% FOR 45,38,955/- ONLY I.E. 6,80,843/- BY OBSERVING AS UNDER:- 9. BEFORE ME IT WAS STATED THAT THERE IS NO DEFAUL T UNDER SECTION 194-I AND HENCE DISALLOWANCE CANNOT BE MADE. IN REGARD TO HIR E CHARGES PAID, IT IS A CASE OF LACK OF CORRECTNESS AND COMPLETENESS OF ACCOUNTS . THERE IS NO SPECIFIC TDS DEFAULT THAT IS IDENTIFIED. IF A CASE OF DEFAULT OF SECTION 194-I IDENTIFIED THEN NATURALLY SECTION 40A(IA) IS ATTRACTED. SINCE ASSES SEE MAINTAINED IMPROPER VOUCHERS THE RIGHT COURSE OF ASSESSMENT SHOULD TO B E EXERCISE BEST OF JUDGMENT AS PRODUCED IN SECTION 145(3). POWER OF CIT(APPEALS ) IS CO-TERMINUS WITH THAT OF ASSESSING OFFICER. THE ASSESSING OFFICER IN ASSE SSMENT ORDER ALSO STATES THAT THE DISALLOWANCE IS ON ACCOUNT OF GENUINENESS OF THE EXPENDITURE IS DOUBTFUL . THE ONUS IS ON ASSESSEE TO ESTABLISH THAT EXPENS E IS WHOLLY AND EXCLUSIVELY FOR BUSINESS. FOR THIS LIABILITY HAS TO PRODUCE CORRECT AND COMPLETE VOUCHERS WHICH THE ASSESSEE HAS NOT PRODUCED. HENCE CONSIDERING ALL ASPECTS, I HOLD THAT IN PLACE OF DISALLOWANCE OF RS.45,38,955/ - ON FACTS AND CIRCUMSTANCES OF CASE A 15% DISALLOWANCE IS SUFFICIENT TO ABSORB ALL DEFICIENCIES ACCOUNTS. ITA NO.174/KOL/2015 A.Y. 2010-11 ITO WD-2(2) ASL VS. MAA SARWESHWARI CON STRN. PAGE 3 ACCORDINGLY I DIRECT ASSESSING OFFICER TO REPLACE T HE ADDITION OF RS.45,38,955 BY RS.6,80,843/-. THE GROUND IS PARTLY ALLOWED. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFORE U S. 5. LD. DR BEFORE US SUBMITTED THAT LD. CIT(A) ERRED IN REDUCING THE AMOUNT OF DISALLOWANCE ON AD HOC BASIS. THERE IS NO AMBIGUITY THAT ASSESSEE FAILED TO FURNISH NECESSARY EVIDENTIARY DOCUMENTS IN SUPPORT OF ITS CLAIM. IN THIS VIEW, LD. DR REQUESTED THE BENCH TO RESTORE THE MATTER BA CK TO THE FILE OF AO FOR FRESH ADJUDICATION. ON THE OTHER HAND, LD. AR FOR THE ASSESSEE RAISED N O OBJECTION IF THE MATTER IS RESTORED BACK TO THE FILE OF AO FOR FRESH ADJUDICAT ION. AT THE END, BOTH PARTIES RELIED ON THE ORDER OF AUTHORITIES BELOW AS FAVOURA BLE TO THEM. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT THE IS SUE BEFORE US IS THAT THE DISALLOWANCE FOR HIRE CHARGES WERE MADE BY AO ON AC COUNT OF TWO REASONS: FIRSTLY , ASSESSEE FAILED TO PROVE THE GENUINENESS OF EXPEN SE ON THE BASIS OF DOCUMENTARY EVIDENCE. SECONDLY , ASSESSEE FAILED TO DEDUCT TDS AS PROVIDED U/S. 194-I OF THE ACT. HOWEVER, LD. CIT(A) RESTRICTED TH E ADDITION MADE BY AO AT 6,80,843/- I.E @ 15% OF 45,38,955/- ON AD HOC BASIS. 6.1 FROM THE FOREGOING DISCUSSION, WE FIND THAT THE ADDITION WAS MADE BY AO ON ACCOUNT OF NON-PRODUCTION OF DOCUMENTARY EVIDENC E. IN THIS REGARD WE FIND THAT ASSESSEE ALSO FAILED TO PRODUCE THE NECESSARY EVIDENCE EVEN DURING REMAND STAGE. WE ALSO FURTHER NOTE THAT LD. CIT(A) HAS ALS O NOT CALLED FOR THE NECESSARY DOCUMENTS FOR THE PURPOSE OF VERIFICATION WHETHER T HE IMPUGNED EXPENSE ARE GENUINENESS OR NOT. WE ALSO NOTE THAT LD. CIT(A) HA S CONFIRMED THE DISALLOWANCE @ 15% FOR TOTAL EXPENSE WITHOUT COMPAR ING THE SAME WITH THE EARLIER YEAR AS WELL AS SUBSEQUENT YEAR. IN THIS VI EW OF THE MATTER, WE FEEL THAT LD. CIT(A) HAS NOT PASSED A SPEAKING ORDER. THUS IN THIS BACKDROP OF THE FACTS ITA NO.174/KOL/2015 A.Y. 2010-11 ITO WD-2(2) ASL VS. MAA SARWESHWARI CON STRN. PAGE 4 OF THE CASE, WE FEEL THAT THE IMPUGNED ISSUE NEEDS TO BE RE-VERIFIED BY THE AO AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE. UPON CAREFUL CONSIDERATION WE NOTE THAT INTEREST OF NATURAL JUST ICE WILL BE SERVED IF THE MATTER IS REMITTED BACK TO THE FILE OF AO. THE AO IS DIREC TED TO CONSIDER THE ISSUE AFRESH. THE AO SHALL TAKE INTO ACCOUNT THE OTHER SU BMISSIONS OF THE ASSESSEE. ACCORDINGLY, WE REMIT THE ISSUE RAISED BY REVENUE T O THE FILE OF AO. NEEDLESS TO SAY THAT ASSESSEE SHOULD BE GRANTED ADEQUATE OPP ORTUNITY OF BEING HEARD. HENCE, THIS GROUND OF REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSE. 7. IN THE RESULT, FOR STATISTICAL PURPOSE, THE APPEAL OF REVENUE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 26/10/2017 SD/- SD/- (% ') ( ') (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP-SR.PS ) - 26/10/2017 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WARD-2(2), PARMER BUILDING, 54 G.T. ROAD, ASANSOL-04 2. /RESPONDENT-MAA SARWESHWARI CONSTRUCTION, SINGH MAN SION, RANCHI PATNA ROAD, KODERMA, JHUMRITALAIYA, JHARKHAND-825409 3. , - / CONCERNED CIT 4. - - / CIT (A) 5. . %%, , , / DR, ITAT, KOLKATA 6. 2 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO ,,