The DCIT, Circle-9, Ahmedabad V. M/s. KECL Radhe Joint Venture, Ahmedabad

ITA 1761/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0527 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-01-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 08-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Keywords: Business income; Opportunity of being heard; Initiation of penalty proceedings; Corroborative evidences
• Section: 43B; 40A(3); 194C; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI G.C.GUPTA , VICE PRESIDENT AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 1761/AHD/2012 ASSESSMENT YEAR :2007-08 D.C.I.T., CIRCLE - 9, AHMEDABAD V/S . M/S. KECL RADHE JOINT VENTURE, ADITYA BUNGLOW NO.6, C/O. KALATHIYA ENG. AND CONST. LTD., NR. SANT KABIT SCHOOL, SURDHARA CIRCLE, THALTEJ, AHMADABAD - 380052 PAN NO. A A BTK0944N (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI D.K.SINGH, SR. D.R. /BY RESPONDENT SHRI SAMIR BHUPTANI, A.R. /DATE OF HEARING 28.01.2013 /DATE OF PRONOUNCEMENT 15.03.2013 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHIC H HAS EMANATED FROM THE ORDER OF CIT(A)-XV, AHMADABAD, DATED 28.05 .2012 FOR ASSESSMENT YEAR 2007-08. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER: 1). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-X V, AHMADABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.3,00,000/- OUT OF THE LABOUR EXP ENSES. 2). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV , AHMADABAD HAS ERRED IN LAW AND ON FACTS IN GRANTING THE RELIEF OF RS.25,12,296/- ON ACCOUNT OF DISALLOWANCE U/S. 4 3B OF THE ACT. ITA NO. 1761/AHD/2012 A.Y. 07-08 PAGE 2 3). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV , AHMADABAD HAS ERRED IN LAW AND ON FACTS IN RESTRICT ING THE DISALLOWANCE TO RS.52,054/- OUT OF TOTAL LIABILITY OF VAT AMOUNTING TO RS.72,135/- U/S. 43B OF THE ACT. 4). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV , AHMADABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCES AMOUNTING TO RS.23,414/- U/S.43A(3) O F THE ACT. 5). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV , AHMADABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCES AMOUNTING TO RS.73,333/- OUT OF VEHIC LE EXPENSES. 6). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV , AHMADABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCES AMOUNTING TO RS.16,750/- OUT OF TELEP HONE EXPENSES. 2. THE FIRST GROUND OF REVENUES APPEAL IS AGAINST DELETING THE DISALLOWANCE OF RS.3,00,000/- OUT OF THE LABOUR EXP ENSES. THE ASSESSEE IS A CONTRACTOR IN CONSTRUCTION. THE ASSSESSEE IS A JOI NT VENTURE BETWEEN KALATHIYA ENGINEERING & CONSTRUCTION LTD. AND RADHE CONSTRUCTION. THE JOINT VENTURE AGREEMENT HAS CARRIED OUT CIVIL CONSTRUCTIO N ACTIVITIES AS CONTRACTOR. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR, THE ASSESSEE HAD UNDERTAKEN JOB OF CONSTRUCTION OF FOUNDATION OF WIN D MILL FOR SUZLON INFRASTRUCTURE LTD. IN KUTCH, DISTRICT OF GUJARAT AND DHULE-NANDURBAR SITE IN MAHARASHTRA. THE ASSESSEE HAD SHOWN GROSS RECEIPTS OF RS.12.27 CRORE DISCLOSING GROSS PROFIT OF RS.43.99 LACS WHICH WORK ED OUT TO 3.59% (NET PROFIT 0.87%) AGAINST 4.77% (NET PROFIT 2.72%) SHOWN IN PR ECEDING YEAR FROM THE RECEIPTS OF RS.4.2 CRORE. THE BUSINESS RECEIPTS HA D INCREASED AROUND THREE ITA NO. 1761/AHD/2012 A.Y. 07-08 PAGE 3 TIMES. THE A.O. OBSERVED THAT THE G.P. AS WELL AS NET PROFIT HAD DECLINED DURING THE YEAR COMPARED TO PRECEDING YEAR. THEREF ORE, THE APPELLANT WAS GIVEN REASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE, WHICH WAS CONSIDERED BY THE A.O. THE APPELLANT HAD DEBITED L ABOUR EXPENSES AMOUNTING TO RS. 40,53,382/- AND PAYMENT TO THE LAB OURERS WERE MADE IN CASH ON SELF DRAWN VOUCHERS, WHICH ARE NOT VERIFIAB LE. BESIDES THIS, THE APPELLANT HAD NOT MAINTAINED DAY-TO-DAY RECORDS ON CONSUMPTION OF RAW MATERIALS. THE CONSUMPTION OF RAW MATERIAL IN KUTC H SITE HAD BEEN SHOWN HIGHER BY ABOUT 2% AS COMPARED TO DHULE SITE. THE WORK CARRIED OUT IN BOTH THE SITES WAS SIMILAR AND THERE MAY NOT BE ANY REAS ON FOR VARIATION IN CONSUMPTION. THERE WAS NO PLAUSIBLE EXPLANATION FR OM THE SIDE OF APPELLANT FOR SUCH UNEVEN CONSUMPTION OF RAW MATERIAL. DURIN G THE ASSESSMENT PROCEEDINGS FOR A.Y. 06-07, WHICH WAS TAKEN PLACE I N THE MONTH OF DECEMBER 2008, THE PARTNERS HAD ADMITTED THAT THE MAJOR EXPE NSES WERE PAID BY CASH TO VARIOUS LABOURERS. IT WAS VERY DIFFICULT TO PROVE THE SAME. HENCE, PARTNERS HAD AGREED UPON TO TAX FURTHER PROFIT OF RS.9,56,88 8/- TO THE RETURN INCOME SUBJECT TO NON INITIATION OF PENALTY PROCEEDINGS U/ S. 271(1)(C) OF THE I.T. ACT. THE FACTS ARE SIMILAR DURING THE YEAR TOO, TO THOSE IN A.Y. 06-07. IN THE CURRENT YEAR ALSO, IT IS DIFFICULT, RATHER IMPOSSIBLE TO SU BSTANTIATE EACH AND EVERY SMALL SUCH CASH PAYMENTS TO LABOURERS AND THEIR GENUINENE SS OF THE EXPENSES ON THE BASIS OF SELF MADE VOUCHER WHICH DID NOT MAKE C OMPLETE INFORMATION AND EVIDENCES. AFTER CONSIDERING THE VARIOUS FACTS, TH E A.O. MADE LUMPSUM ADDITION OF RS.3,00,000/- UNDER THE HEAD LABOUR CHA RGES. ITA NO. 1761/AHD/2012 A.Y. 07-08 PAGE 4 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE CIT(A), WHO HAD DELETED THE ADDIT ION IN PARA NO.4.2.3. THE OPERATIVE PORTION OF THE ORDER IS AS UNDER: 4.2.3. I HAVE PERUSED THE FACT AS HIGHLIGHTED BY A .O. IN THE ORDER. I HAVE PERUSED THE FACTS WITH DETAILS AND E XPLANATION AS SUBMITTED BY APPELLANT. I HAVE PERUSED THE CASE LA WS SUBMITTED BY APPELLANT IN THIS REGARD. AFTER CAREFUL CONSIDERAT ION OF ALL THESE FACTS, I AM INCLINED TO ACCEPT THE CONTENTION OF THE APPEL LANT THAT IN THE ABSENCE OF ANY SPECIFIC DEFECT, WITHOUT REJECTING T HE BOOKS OF ACCOUNT, DISRESPECTING THE AUDIT IN THE CASE OF APP ELLANT AND ONLY ON THE BASIS OF AN ADMISSION OF APPELLANT IN EARLIER Y EAR, THE LUMP SUM DISALLOWANCES OF RS. 3 LACS IS BASED ON CONJECTURE AND SURMISES. THE A.O. FAILED TO EVEN SHOWS THAT THERE IS ANY ABN ORMALITY OF TOTAL LABOUR EXPENDITURE VIS A VIS LAST YEAR PERCENTAGE O R TOTAL TURNOVER. SUCH KIND OF DISALLOWANCES ARE NOT SUSTAINABLE ON F ACTS AND LAW. THE A.O. IS DIRECTED TO DELETE SUCH ADDITION. THE APPELLANT GETS RELIEF OF RS.3,00,000/-. 4. NOW THE REVENUE IS BEFORE US. LD. SR. D.R. VEHE MENTLY RELIED UPON THE ORDER OF A.O. AT THE OUTSET, LD. COUNSEL FOR THE A PPELLANT FILED A PAPER BOOK ALONGWITH COMPARATIVE ANALYSIS OF THE EXPENSES WITH A.Y. 06-07 AND HE ALSO FILED A COPY OF SUBMISSION BEFORE THE CIT(A), COPY OF ANNUAL ACCOUNT ALONGWITH RETURN, SITE WISE BIFURCATION OF INCOME A ND EXPENSES, ILLUSTRATIVE VOUCHERS OF LABOUR. IT WAS CONTENDED THAT ALL THE EXPENSES WERE MADE ON THE BASIS OF VOUCHER RECEIVED FROM THE LABOUR SERVICE P ROVIDER. THERE WAS NO DEFECT IN THE BOOKS OF ACCOUNT, HAS BEEN POINTED OU T BY THE A.O. HE FURTHER RELIED IN CASE OF VISHAL INFRASTRUCTURE LTD. V. ACIT (104 ITD 0537), HYD ITAT, ITA NO. 1761/AHD/2012 A.Y. 07-08 PAGE 5 WHEREIN IT WAS HELD THAT ABSENCE OF VOUCHERS OR THE SUPPORTING EVIDENCE IN RESPECT OF A PARTICULAR ITEM OF EXPENDITURE CANNOT BY ITSELF EMPOWER AN ASSESSING OFFICER TO INVOKE PROVISION OF SECTION 14 5(3) IN REJECTING THE BOOKS OF ACCOUNT. AMRITSAR BENCH OF THE HONBLE TRIBUNAL IN ASHOK KUMAR & CO. V. ITO (2004) 2 SOT 518 (SMC) HELD THAT REJECTION OF BOOKS CANNOT BE RESTORED TO SIMPLY ON THE BASIS OF ABSENCE OF SOME VOUCHERS AND FAILURE TO PRODUCE THE SAME BY THE ASSESSEE. HE FURTHER RELIED IN CASE OF ITO VS. MAGANBHAI MADALIYA IN ITA NO.248/RJT/2006 FOR A.Y. 2002-03, WHEREIN IDENTICAL ADDITIONS WERE MADE BY THE A.O. ON DISALLOWANCE 10% OF LABOUR CHARGES PAYMENT ON THE GROUND CERTAIN DISCREPANCY IN VOUCHE RS BUT REJECTION OF BOOKS U/S.145(3) IS NOT FOUND JUSTIFIED. THEREFORE, LD. COUNSEL REQUESTED TO CONFIRM THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE PAPER BOOKS. THE APPELLANT MADE PAYMENT TO THE LABOUR IN CASH BU T WHICH HAS BEEN SIGNED BY THE RECIPIENTS (PAGE NO.47 OF PAPER BOOK). THE ASSESSEE HAD SHOWN COMPARATIVE CHART NOT ONLY WITH PRECEDING YEAR BUT SITE WISE WHICH SHOWS THAT LABOUR CHARGES PAID DURING A.Y. 06-07 WERE 14.74% O F TOTAL EXPENSES WHICH HAS BEEN REDUCED AT 3.3% DURING THE YEAR UNDER CONS IDERATION. IT REVEALS THAT MORE LABOURS WERE USED IN A.Y. 06-07 AND IN A.Y. 07 -08, THIS WORK HAS BEEN EXECUTED EITHER THROUGH SUB-CONTRACTOR OR MACHINE. THE LD. A.O. HAD NOT POINTED OUT ANY SPECIFIC DEFECT IN THE BOOKS OF ACC OUNT, DIS-RESPECTING AUDIT REPORT BEFORE DISALLOWING THE LABOUR EXPENSES. THE RE IS NO ABNORMAL INCREASE IN THE LABOUR CHARGES. THUS, WE CONFIRM THE ORDER OF CIT(A) ON THIS GROUND. ITA NO. 1761/AHD/2012 A.Y. 07-08 PAGE 6 6. THE SECOND AND THIRD GROUNDS OF REVENUES APPEAL ARE AGAINST GRANTING RELIEF OF RS.25,12,296/- ON ACCOUNT OF DISALLOWANCE U/S.43B OF THE ACT AND RESTRICTING THE DISALLOWANCE TO RS.52,054/- OUT OF TOTAL LIABILITY OF VAT U/S.43B OF THE ACT. THE A.O. OBSERVED THAT THE ASSESSEE HA D FOLLOWED MERCANTILE SYSTEM OF ACCOUNTING DURING THE YEAR UNDER CONSIDER ATION. THE RECEIPTS IN P&L ACCOUNT IS ACCOUNTED FOR NET OF SERVICE TAX. ON VE RIFICATION OF THE BALANCE SHEET, THE APPELLANT HAD SHOWN OUTSTANDING LIABILIT Y ON ACCOUNT OF SERVICE TAX PAYABLE AND VAT TAX PAYABLE TO GOVERNMENT AS UNDER: SERVICE TAX ON GTO PAYABLE RS. 2,62,952/- SERVICE TAX PAYABLE A/C RS. 50,94,884/- VAT TAX PAYABLE A/C RS. 3,45,483/- TOTAL RS. 57,03,319/- FROM THE ABOVE, IT IS SEEN THAT THE LIABILITIES ON ACCOUNT OF SERVICE TAX WAS RS.53,57,836/- AS ON 31.03.2007. OUT OF THIS, THE APPELLANT HAD PAID SERVICE TAX INCLUDING INTEREST OF RS.26,55,876/- AND RS.1,8 3,876/- ON 17.07.2007 AND 23.10.2007 RESPECTIVELY BEFORE THE DUE DATE OF RETU RN FILED. THE BALANCE AMOUNT OF RS.25,53,939/- REMAINED UNPAID. THE LD. A.O. GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE, WHICH WAS CONSIDERED BUT HE DID NOT SATISFY WITH THE SUBMISSION OF THE APPELLANT. AFTE R DISCUSSING THE VARIOUS CASE LAWS AND FACTUAL POSITION, HE MADE ADDITION OF RS. 25,53,939/- AS WELL AS RS.72,135/- U/S. 43B OF THE ACT. 7. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAD ALLOWED THE APPEAL PARTLY BY OBSERVING AS UNDER: ITA NO. 1761/AHD/2012 A.Y. 07-08 PAGE 7 (C) I HAVE PERUSED THE FACTS AS MENTIONED BY A.O. IN THE ASSTT. ORDER. I HAVE PERUSED THE FACTS WITH DETAILS AS SU BMITTED BY APPELLANT IN STATEMENT OF FACTS AS WELL AS IN PAPER BOOK. I HAVE ALSO PERUSED THE CASE LAW RELIED ON BY THE APPELLANT. A FTER VERIFICATION OF FACTS AS SUBMITTED BY APPELLANT AND ALSO THE FACTS THAT THESE DETAILS WERE FURNISHED BEFORE THE A.O., I AM CONVINCED THAT A.O. HAS NOT PROPERLY APPRECIATED THE FACTS AND LEGAL PROVISIONS . THE APPELLANT THROUGH THESE DETAILS CLEARLY DEMONSTRATED FOLLOWIN G POINTS: (I) THE LIABILITY TO PAY / DEPOSIT SERVICE TAX ARRIVES ONLY WHEN THE PAYMENT IS RECEIVED FOR THE SERVICE RENDERED TOWARD S WHICH THE SERVICE TAX IS COLLECTED. THIS IS SUPPORTED BY PRO VISION OF RULE 6(1) OF SERVICE TAX RULE 1994. (II) THE CENVAT CREDIT AND OTHER EDUCATION CESS ETC . IS AVAILABLE FOR SET OF AGAINST SUCH TAX PAYABLE TO THE APPELLANT AS PER SCHEME OF VAT. (III) THE APPELLANT EITHER PAID SUCH AMOUNT OR ADJU STED AGAINST SUCH CREDIT, AS CLEARLY EVIDENCED FROM THE COPY OF SERVICE TAX RETURN FILED BY IT ON 25/10/2007 FOR F.Y. 07-08 WHICH HAS ALL SUCH DETAILS WITH DETAILS OF PAYMENT AND ADJUSTMENT FROM 01/04/2 007 TO 30/09/2007 I.E. BEFORE FILING OF RETURN OF INCOME O N 29/10/2007. (IV) THE PROVISIONS OF SECTION 43B OF THE ACT IS AP PLICABLE ON THE SUMS PAYABLE OUT OF SUCH DUTY, TAX, CESS ETC. AND NOT ON PAID. RATHER IF SUCH AMOUNT IS PAID BEFORE DUE DATE OF FI LING OF RETURN OF INCOME THE SAME IS ALLOWED. THE PAYABLE HERE USE D BY THE LEGISLATURE IS DELIBERATE AS HELD RECENTLY BY THE H ONBLE SPECIAL BENCH OF ITAT VISHAKHA PATNAM IN THE CASE OF M/S. M ERILYN SHIPPING & TRANSPORTS V. ACIT RANGE-1 IN ITA NO. 477/VIJAY/2 008 FOR A.Y. 2005-06 ORDER DATED 9.4.2012. THE A.O. ALSO RELIED ON THE CASE OF REAL IMAGE MEDIA TECHNOLOGIES (P) LTD. REPORTED IN 306 ITR 106 WHEREIN THE ISSUE IS SQUARELY APPLICABLE IN THE CAS E OF APPELLANT. ITA NO. 1761/AHD/2012 A.Y. 07-08 PAGE 8 (V) IT IS ONLY AN AMOUNT OF RS.41,643/- WHICH HAS R EMAINED AS PAYABLE AS ACCEPTED BY APPELLANT AND VERIFIABLE. THIS IS THEREFORE, THE A.O. IS DIRECTED TO RESTRIC T THE DISALLOWANCE TO RS.41,643/- AND DELETE THE BALANCE ADDITION. THE APPELLANT GETS RELIEF OF RS.25,12,296 (2553939-4164 3). THE LD. CIT(A) FURTHER HELD AS UNDER: 4.4.3 I HAVE PERUSED THE FACTS AND SUBMISSION AS OBSERVED BY A.O. I HAVE PERUSED THE DETAILS IN THE CHALLAN W HICH CLEARLY SHOW THAT OUT OF TOTAL OUTSTANDING LIABILITY OR RS.3,45, 483 TOWARDS VAT AS ON 31/03/2007, THE APPELLANT COULD PAID ONLY RS. 2, 93,429(3,45,483- 52,054) AND THEREFORE HE ADMITTED THAT SUCH DISALLO WANCE U/S. 43B BE MADE FOR AN AMOUNT OF RS.52,054/- AT THE PLACE O F RS.72,135/- WHICH IS MADE BY A.O. ON SOME MISCALCULATION. FURT HER SINCE DATE OF PAYMENT OF CHALLAN FOR AMOUNT RS. 2,93,429 IS 29 /10/2007 I.E. BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME I N THE CASE OF APPELLANT I.E. 31/10/2007, IN SPITE OF THE SAME BEI NG PAID ON THE DATE OF FILING OF RETURN OF INCOME, THE SAME IS ALLOWABL E U/S 43B OF THE ACT. THE ADDITION SO MADE BY A.O. IS JUSTIFIED BUT UPHEL D TO THE EXTENT OF RS.52,054. THE BALANCE AMOUNT IS DIRECTED TO BE DE LETED. THE APPELLANT GETS RELIEF OF RS.20,081 (72,135-52,054). 8. NOW THE REVENUE IS BEFORE US. LD. SR. D.R. RELI ED UPON THE ORDER OF THE A.O. FROM THE SIDE OF THE ASSESSEE, LD. COUNSEL F ILED A COPY OF CHALLAN AND COPY OF LEDGER ACCOUNT AT PAGE NOS. 57 TO 85 AND CO PY OF SERVICE TAX LETTER DATED 06 TH AUGUST, 2009 AT PAGE NOS. 86, 87 TO 89 OF PAPER BO OK AND CLAIMED THAT OUT OF TOTAL OUTSTANDING SERVICE TAX AS ON 31. 03.2007 ONLY RS.41,643/- WAS REMAINED UNPAID AS ON 31.10.2007 ON DUE DATE OF RETURN FILED. HE HAS ALSO DRAWN OUR ATTENTION ON PAGE NOS. 6 TO 11 WHERE DETAILS OF PAYMENT OF ITA NO. 1761/AHD/2012 A.Y. 07-08 PAGE 9 SERVICE TAX AS WELL AS VAT HAVE BEEN GIVEN BY THE A PPELLANT. HE FURTHER RELIED UPON IN CASE OF ACIT V. REAL IMAGE MEDIA TECHNOLOGIES (P) LTD., [20 08] 306 ITR 0106, ITAT, CHENNAI B BENCH DECISION, WHEREIN IT WAS HELD THAT IF THERE IS NO LIABILITY TO MAKE THE PAYMENT TO THE CREDIT O F CENTRAL GOVERNMENT BECAUSE OF NON-RECEIPT OF PAYMENTS FROM THE RECEIVE R OF THE SERVICES, THEN IT CANNOT BE SAID THAT SUCH SERVICE-TAX HAS BECOME PAY ABLE IN TERMS OF CLAUSE (A) OF SECTION 43B BECAUSE THAT CLAUSE SPECIFICALLY MENTIONS SUM PAYABLE BY THE ASSESSEE. [PARA16] IN VIEW OF THE ABOVE OBSERV ATIONS, SINCE SERVICE-TAX WAS NO T PAYABLE BY THE ASSESSEE, THE RIGOUR OF SEC TION 43B COULD NOT HAVE BEEN APPLIED TO THE CASE OF THE ASSESSEE. UNDER TH ESE CIRCUMSTANCES, THERE WAS NOTHING WRONG WITH THE ORDER OF THE CIT(A) ON T HIS ISSUE AND THE SAME MAY BE CONFIRMED. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE CIT(A) HAS VERIFIED ALL THE ACCOUNTS O F THE SERVICE TAX AS WELL AS VAT ACCOUNT AND FINALLY HE DETERMINED THE TOTAL UNP AID TAX LIABILITY U/S. 43B RS.41,643/- AND OTHER PAYMENTS HAVE ALREADY BEEN MA DE ON OR BEFORE DUE DATE OF RETURN FILED BY THE ASSESSEE ON THE BASIS O F SERVICE TAX RECEIVED BY THE APPELLANT. THUS, WE DO NOT FIND ANY REASON TO INTE RVENE IN THE ORDER OF THE CIT(A). ACCORDINGLY, REVENUES APPEAL, ON BOTH GRO UNDS, IS DISMISSED. 10. GROUND NO.4 IS AGAINST DISALLOWANCES AMOUNTING TO RS.23,414/- U/S. 43A(3) OF THE IT ACT. THE A.O. HELD THAT THE ASSES SEE HAS MADE CASH PAYMENT EXCEEDING RS.20,000/- TO ABADA MUSABHAI ISM AILBHAI, SUB- CONTRACTOR AND VIOLATED THE PROVISIONS OF 40A(3) OF THE IT ACT ON FOUR PAYMENTS ITA NO. 1761/AHD/2012 A.Y. 07-08 PAGE 10 MENTIONED IN THE ASSESSMENT ORDER. THE APPELLANT H AD SUBMITTED BEFORE THE A.O. THAT HE HAD DEDUCTED TDS ON THESE PAYMENTS U/S . 194C AND ALSO THERE WAS NO BANKING FACILITY IN THE AREA WHERE WORK HAS BEEN EXECUTED. BUT THE LD. A.O. WAS NOT SATISFIED WITH THE EXPLANATION. HE DI SALLOWED 20% EXPENSES OUT OF RS.1,17,067/- I.E. RS. 23,414/- U/S. 40A(3) OF T HE IT ACT. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAD PARTLY ALLOWED THE APPEAL BY OBSERVING THAT THE PAYMENT MADE TO THE ABOVE PARTY, HAD BEEN DULY CONFIRMED BY HIM, SUBJECT TO TDS PROVISION AND ALSO SUPPORTED BY THE VOUCHER SHOWING NOT EVEN A SINGLE PAYMENT IS ABOVE RS.20,000/- AND THEREFORE, IT IS NOT COVERED U/S.40A(3) OF THE IT ACT. AS PER ITAT, AHM ADABAD ORDER IN THE CASE OF LEADER TRANSPORT CO. [2010] 006 ITR (TRIB) 229, WHEREIN ON IDENTICAL FACTS, THE ITAT HAD DECIDED THE CASE IN FAVOUR OF THE APPE LLANT. THUS, CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF RS.23,414/- . WE HAVE ALSO HEARD FROM BOTH THE SIDES ON THIS ISSUE AND IT IS FOUND THAT T DS HAS ALREADY BEEN DEDUCTED BY THE APPELLANT U/S. 194C OF THE IT ACT A ND NO SINGLE PAYMENT IS MORE THAN RS.20,000/- FOR WHICH THE EVIDENCE PLACED ON PAGE NOS.123 TO 134 OF THE PAPER BOOK FILED. THE ASSESSEE RELIED UPON IN CASE OF CIT VS. S.S.P. (P.) LTD. IN IT APPEAL NO. 535 OF 2010 (PUNJAB & HARYANA HIGH COURT), IS SQUARELY APPLICABLE. THUS, WE CONFIRM THE ORDER OF THE CIT(A). ACCORDINGLY, REVENUES APPEAL ON THIS GROUND IS DISMISSED. 11. GROUND NOS. 5 & 6 ARE AGAINST DELETING THE DISA LLOWANCE OF RS. 73,333/- OUT OF VEHICLE EXPENSES AND RS.16,750/- OUT OF TELE PHONE EXPENSES. THE A.O. DISALLOWED THE EXPENSES OUT OF VEHICLE EXPENSES AT RS.73,333/- OUT OF TOTAL ITA NO. 1761/AHD/2012 A.Y. 07-08 PAGE 11 VEHICLE EXPENSES OF RS.3,66,667/- FOR NON BUSINESS PURPOSE AND NOT MAINTAINING PROPER RECORD AND SIMILARLY AT RS.16,75 0/- OUT OF TELEPHONE EXPENSES. THE ASSESSEE CARRIED THE MATTER BEFORE T HE CIT(A) WHO HAS CONSIDERED ALL THE FACTS AND DELETED THE ADDITIONS BY OBSERVING THAT THE ASSESSEES STATUS IS AOP, THE APPELLANT HAD FILED R ETURN OF FBT WHEREIN ALL CARES OF PERSONAL EXPENSES HAS BEEN TAKEN. THUS, I T WAS HELD BY CIT(A) THAT NO SEPARATE DISALLOWANCES WERE WARRANTED. AFTER HE ARING BOTH THE PARTIES ON THESE ISSUES AND CONSIDERING THE PAPER BOOK AT PAGE NOS. 136 AND 137 IN CASE OF AOP AND FBT, HAS ALREADY BEEN PAID ON THESE SERVICES. NO FURTHER DISALLOWANCE CAN BE MADE BY THE A.O. ACCORDINGLY, WE CONFIRM THE ORDER OF THE CIT(A). ON THESE GROUNDS, WE DISMISS THE REVEN UES APPEAL. 12. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 15.03.2013 SD/- SD/- (G.C.GUPTA) (T.R. MEENA) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;