DCIT, New Delhi V. M/s Neha Jewellers Pvt. Ltd., New Delhi

ITA 1764/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3428 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 21-07-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 11-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR SENIOR
• Assessee Lawyers: S P AGGARWAL
• Keywords: Unexplained investment; Unexplained expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I : NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.1764/DEL./2011 (ASSESSMENT YEAR : 2007-08) DCIT, CENTRAL CIRCLE 12, VS. M/S. NEHA JEWELLERS PVT. LTD., NEW DELHI. 1170, KUCHA MAHAJANI, CHANDNI CHOWK, DELHI 110 006. (PAN : AAACN7129G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.P. AGGARWAL, CA REVENUE BY : SHRI B.R.R. KUMAR, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE ARISES OUT OF THE ORDER OF THE CIT (APPEALS)- I, NEW DELHI DATED 12.01.2011 FOR THE ASSESSMENT YE AR 2007-08. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE READ AS UNDER :- 1. THE ORDER OF THE LD. CIT (A) IS NOT CORRECT IN LAW AND FACTS. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LEAR NED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.17,37,467/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF DISALLOWANCE OF LABOUR CHARGES MADE TO FIVE PARTIES BY THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE COU LD NOT BE ABLE TO PRODUCE ANY COGENT EVIDENCE DURING THE COURSE OF AS SESSMENT PROCEEDINGS. ITA NO.1764/DEL./2011 2 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. 2. THE ONLY ISSUE INVOLVED IN THE GROUNDS OF APPEAL IS AGAINST THE DELETION OF ADDITION OF RS.17,37,467/- MADE BY THE ASSESSING OF FICER ON ACCOUNT OF NON- FURNISHING THE CONFIRMATION OF LABOUR CHARGES IN RE SPECT OF THE FOLLOWING:- S.NO. PARTY NAME LABOUR CHARGES 1. T.N. JEWELLERS 4,92,442.00 2. CHAJJU SINGH & SONS JEWELLERS 42,294.00 3. ANIL MAL 3,63,984.00 4. SHANKER MAJI 2,72,916.00 5. SUJIT SINGH 5,65,831.00 17,37,467.00 THE LEARNED DR SUBMITTED THAT THE ASSESSING OFFICER HAS CATEGORICALLY MENTIONED IN HIS ORDER THAT CONFIRMATION OF LABOUR CHARGES IN RE SPECT OF T.N. JEWELLERS, CHAJJU SINGH & SONS JEWELLERS, ANIL MAL, SHANKER MAJI AND SUNIT SINGH WERE NOT PROVIDED TO THE ASSESSING OFFICER AND FOR UNVERIFIABLE CLAIM , THE AMOUNT WAS ADDED AS UNEXPLAINED EXPENDITURE. THE CIT (A) DELETED THE A DDITION BY STATING THAT THE ASSESSEE SUBMITTED THE CONFIRMATION OF THESE PARTIE S BEFORE THE ASSESSING OFFICER ON 18.12.2009 AND THE SAME WERE PRODUCED BEFORE HIM. THE LEARNED DR SUBMITTED THAT THIS IS FACTUALLY INCORRECT. THERE IS CLEAR C UT FINDING THAT NOTHING WAS SUBMITTED IN THIS REGARD BEFORE THE ASSESSING OFFICER. THE C IT (A) HAS SIMPLY DELETED THE ADDITION BY STATING THAT HE HAS PERUSED THE PAPER B OOK AND CONSIDERED THE SUBMISSIONS WITHOUT GIVING ANY CLEAR FINDING IN THI S REGARD. HE SUBMITTED THAT OUT OF THE TOTAL LABOUR CHARGES OF RS.45,14,910/- DEBIT ED BY THE ASSESSEE, THE ASSESSING OFFICER DISALLOWED ONLY RS.17,37,467/- WHICH CLEARL Y ESTABLISHED THAT THE ASSESSEE ITA NO.1764/DEL./2011 3 HAS NOT SUBMITTED ANY DETAILS WHICH CAN VERIFY THE EXPENSES IN RESPECT OF THESE FIVE PERSONS AND HE PRAYED THAT THE ORDER OF THE CIT (A) MAY BE SET ASIDE. 3. ON THE OTHER HAND, THE LEARNED AR SUBMITTED THAT THESE DOCUMENTS WERE SUBMITTED BEFORE THE ASSESSING OFFICER WHICH WERE N OT CONSIDERED BY THE ASSESSING OFFICER AND THE CIT (A) DULY CONSIDERED THE SAME AN D DELETED THE ADDITION. HE RELIED ON THE ORDER OF THE CIT (A). HE ALSO PLEADE D THAT THE TDS HAS BEEN DEDUCTED ON THESE CHARGES PAID TO THESE PERSONS. THEREFORE, THE PAYMENTS WERE GENUINE AND VERIFIABLE. 4. WE HAVE HEARD BOTH THE SIDES. CIT (A) DELETED T HE ADDITION BY HOLDING AS UNDER :- 5. I HAVE CONSIDERED THE RIVAL POSITION CAREFULLY. DURING THE ASSESSMENT PROCEEDINGS AO HAD DISALLOWED AN AMOUNT OF RS.17,37 ,467/- AS UNEXPLAINED INVESTMENT 1 EXPENDITURE ON THE GROUND THAT THE CONFIRMATION OF THE LABOUR CHARGES WERE NOT PROVIDED AT TIME OF ASSESSMENT PROCEEDINGS. DURING THE APPELLATE PROCEEDING THE APPELLANT SUBMI TTED THAT THE APPELLANT COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF GOLD AND DIAMOND ORNAMENTS AND JEWELLERY FOR THE LAST MANY YEARS. DU RING THE PREVIOUS YEAR THE APPELLANT HAS MADE SALE OF RS.105712812/-. IN T HE NORMAL COURSE OF BUSINESS THE ASSESSEE HAS INCUR LABOUR CHARGES WHIC H ARE PAID TO OUT SIDE JOB WORKERS AS THE ASSESSEE DOES NOT HAVE ITS OWN M ANUFACTURING UNIT. DURING THE YEAR ASSESSEE INCURRED LABOUR CHARGES OF RS.4514910/- PAID TO 10 DIFFERENT PARTIES. THE APPELLANT HAVE FILED CONF IRMATION OF ACCOUNTS CONTAINING COMPLETE NAME, ADDRESS, PAN NO., 'IT RET URN, BANK STATEMENT ETC OF ALL THE PARTIES AND TDS HAS BEEN DEDUCTED AN D DEPOSITED IN ALL THE CASES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AO HAD MADE ADDITION IN CASE OF FOLLOWING 5 PARTIES S.NO. PARTY NAME LABOUR CHARGES (RS.) 1. T.N. JEWELLERS 4,92,442.00 2. CHAJJU SINGH & SONS JEWELLERS 42,294.00 3. ANIL MAL 3,63,984.00 4. SHANKER MAJI 2,72,916.00 5. SUJIT SINGH 5,65,831.00 ---------------- TOTAL RS. 17,37,467.00 ---------------- ITA NO.1764/DEL./2011 4 HOWEVER THE APPELLANT HAD SUBMITTED THAT THE CONFIR MATIONS OF THE ABOVE PARTIES WERE SUBMITTED TO THE AO VIDE LETTER DATED 18.12.2009 WHICH WAS PRODUCED AT THE TIME OF APPELLATE PROCEEDINGS. AFTE R PERUSAL OF THE PAPER BOOK SUBMITTED AND CAREFULLY CONSIDERING THE SUBMIS SION OF THE APPELLANT I AM OF THE CONSIDERED OPINION THAT THE DISALLOWANCE MADE BY THE AO ON THIS ACCOUNT IS UNCALLED FOR AND THEREFORE DIRECTED TO B E DELETED. THE APPEAL OF THE APPEAL ON THIS GROUND IS ALLOWED. THUS ALL THE FIVE GROUND OF APPEAL IS DISPOSED AS ABOVE. AFTER CONSIDERING THE PLEADINGS AND ON THE PERUSAL OF THE RECORD, WE HOLD THAT THERE IS NO EVIDENCE WHICH CAN PROVE THAT THE DETAILS WER E MADE AVAILABLE TO ASSESSING OFFICER. WHILE FINALIZING THE ASSESSMENT ORDER, TH E ASSESSING OFFICER HAS CATEGORICALLY STATED THAT THE ASSESSEE HAS FAILED T O FILE THE NECESSARY DOCUMENTS IN RESPECT OF THE FIVE PERSONS TO WHOM LABOUR CHARGES CLAIMED TO HAVE BEEN PAID. EXCEPT THE STATEMENT FROM THE ASSESSEE THERE IS NO EVIDENCE THAT SUCH DETAILS ON WHICH CIT (A) GRANTED THE RELIEF WERE FILED BEFORE THE ASSESSING OFFICER. THE CIT (A) HAD NOT GOT VERIFIED FROM THE RECORDS WITH ASSE SSING OFFICER. CIT (A) HAD NOT CALLED ANY REPORT IN THIS REGARD. IN VIEW OF THES E FACTS, WE SET ASIDE THE ORDER OF THE CIT (A) AND RESTORE THE APPEAL TO THE FILE OF THE C IT (A) TO DECIDE DE NOVO AS PER LAW. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 22 ND DAY OF JULY, 2011. SD/- SD/- (DIVA SINGH) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 22 ND DAY OF JULY, 2011 TS ITA NO.1764/DEL./2011 5 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-I, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.