Shree Gopal Viniyog (P )Ltd, Kolkata V. ITO, Wd-5(1), kolkata,

ITA 183/KOL/2007

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8037 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2012
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 24-01-2007
• Court: TRIBUNAL
• Department Lawyers: D J MEHTA SR DR
• Assessee Lawyers: A K TIBREWAL FCA LD
• Keywords: Opportunity of being heard
• Section: 80IB

Judgement Text

, C , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C , CALCUTTA () BEFORE , SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER. /AND !'!# 1%&, ) SHRI GEORGE MATHAN, JUDICIAL MEMBER ' / ITA NO. 183/KOL/2007 (&' )*/ ASSESSMENT YEAR: 2003-04 M/S. SHREE GOPAL VINIYOG P.LTD. PAN : AAECS 9494B I.T.O WARD 5(1), KOLKATA (%, / APPELLANT ) - & - - VERSUS - . (.%,/ RESPONDENT ) %, / 0 / FOR THE APPELLANT: / SHRI A.K. TIBREWAL, FCA, LD.AR .%, / 0 / FOR THE RESPONDENT: / SHRI D.J. MEHTA, SR. DR &1 / 2 /DATE OF HEARING : 31-10-2012 3) / 2 /DATE OF PRONOUNCEMENT: 9-11-2012 4 / ORDER !'!# 1%&, ) SHRI GEORGE MATHAN, JUDICIAL MEMBER.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST ORD ER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-V, KOLKATA DATED 15-12-2006 FOR THE ASSES SMENT YEAR 2003-04. 2. A.K. TIBREWAL, FCA, LEARNED AR REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI D.J. MEHTA, LEARNED SR. DR REPRESENTED ON BEHALF OF THE REVENUE 3. IN THE ASSESSEES APPEAL, THE ASSESSEE HAS RAISE D FOLLOWING GROUNDS OF APPEAL:- (1) THAT THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS) IS ARBITRARY BASED ON SURMISES AND BAD IN LAW AS WELL AS ON FACT S. (2) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL B Y CONFIRMING DISALLOWANCE OF DEDUCTION OF RS. 36,87,830/- U/S 801B OF THE I.T. A CT WRONGLY MADE BY THE LEARNED ASSESSING OFFICER. (3) THAT THE LEARNED CIT(A) DISALLOWED THE APPELLAN TS CLAIMS FOR DEDUCTION U/S 801B OF THE I.T. ACT WITHOUT FULLY APPRECIATING THE \ FACTS OF THE CASE, WITHOUT ALLOWING REASONABLE OPPORTUNITY OF BEING HEARD AND ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) OUGHT TO HAVE ALLOWED APPELLANTS CLAIMS FOR DEDUCTIONS U/S 801B OF THE I.T. ACT. (4) THAT THE APPELLANT CRAVES THE LEAVE TO AMEND OR ALTER ANY OF THE ABOVE GROUNDS AND FURTHER TO TAKE ADDITIONAL GROUND OR GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. ITA NO.183/KOL/07-C-GM 2 4. IT WAS SUBMITTED BY THE LEARNED AR FOR THE ASSESSEE THAT THE ISSUE IN THE APPEAL WAS AGAINST THE ACTION OF THE LEARNED COMMISSIONER OF INCOME-TA X (APPEALS) IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER DENYING THE ASSESSEE THE BENEFI T OF DEDUCTION U/S. 80IB OF THE INCOME-TAX ACT 1961 ON THE GROUND THAT THE ASSESSEE DID NOT EMPLOY 10 W ORKERS AS REQUIRED U/S. 80IB(2)(IV) OF THE I.T ACT 1961. HE ALSO SUBMITTED THAT THE ASSESSEE HAD TAKEN WORKERS ON CONTRACT FROM M/S. MISRA & CO. IT WAS SUBMITTED THAT 8 WORKERS WAS SUPPLIED BY M/S. MISR A & CO. AND THE ASSESSEE HAD 3 EMPLOYEES. IT WAS SUBMITTED THAT THE ASSESSEE EMPLOYED MORE THAN 1 0 WORKERS AND CONSEQUENTLY, IN VIEW OF THE DECISIONS OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. PRITHVIRAJ BHOORCHAND REPORTED IN (2005) 280 ITR 94 (GUJ), THE HONBLE BOMBAY HIGH CO URT IN THE CASE OF CIT VS. JYOYI PLASTIC WORKS PVT. LTD REPORTED IN (2011) 339 ITR 491 (BOM) AND T HE HONBLE DELHI COURT IN THE CASE OF CIT VS. NANDA MINT & PINE CHEMICALS LTD REPORTED IN (2012) 345 ITR 60 (DEL) THE WORKERS TAKEN ON CONTRACT FROM M/S. MISRA & CO. WERE TO BE TREATED AS INCLUDI BLE WORKERS FOR THE PURPOSE OF THE 10 WORKERS REQUIRED U/S. 80IB(2)(IV) OF THE ACT. 5. IN REPLY, SHRI D.J. MEHTA, LEARNED SR. DR HAS SUBMITTED THAT THE CONTRACT WORKERS COULD NOT BE TREATED AS THE WORKERS EMPLOYED BY THE ASSESSEE AS THE WORKERS WERE NOT ON THE ROLLS OF THE ASSESSEE. IT WAS FURTHER SUBMITTED BY HIM THAT SECTION 80IB OF T HE ACT WAS FOR THE PURPOSE OF DEVELOPMENT OF BACKWARD AREAS AND EMPLOYMENT GENERATION FOR SUCH BACKWARD AREAS. IT WAS THE FURTHER SUBMISSION THAT IN THE DECISION OF THE HONBLE DELHI HIGH COUR T IN THE CASE OF NANDA MINT & PINE CHEMICALS LTD (REFER TO SUPRA), THE HONBLE DELHI HIGH COURT HA S HELD THAT : .. THE ASSESSING OFFICER HAS NOT EXAMINED AND CO NSIDERED THE NATURE OF CONTROL AND SUPERVISION EXERCISED BY THE APPELLANT . IT IS NOT THE CONTENTION OF THE REVENUE AND IT IS NOT THE FINDING OF THE ASSESSING OFFICER THAT THE ALLEGED WORKERS WERE ENGAGED ON JOB WORK BASIS AND THE RES PONDENT EMPLOYER DID NOT EXERCISE CONTROL AND SUPERVISION OVER THE WORKMEN. THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL HAVE HELD THA T THE WORKERS INCLUDING CASUAL AND CONTRACTUAL WORKERS WERE WORKING IN THE DIRECT SUPERVISION AND CONTROL OF THE RESPONDENT ASSESSEE. IT HAS BEEN HEL D THAT THE CASUAL/CONTRACT WORKERS WERE PAID SALARY BY THE RESPONDENT-ASSESS EE AS SHOWN BY THE SALARY REGISTER PRODUCED BEFORE THE ASSESSING OFFICER. . 5.1. IT WAS SUBMITTED THAT A PERUSAL OF THE AGREEME NT AS HAS BEEN EXTRACTED BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER CLEARLY SHOWED THAT THE AGE NCY BEING M/S. MISRA & CO. MAINTAINED ADMINISTRATIVE SUPERVISION OVER THE WORKERS AND ONL Y TECHNICAL GUIDANCE OF THE ASSESSEE COMPANY WAS GIVEN TO THE WORKERS HIRED. IT WAS SUBMITTED THAT EVEN THE 8 WORKERS, WHO WERE BEING PROVIDED BY M/S. MISRA & CO. WERE NOT UNDER THE CONTROL AND SUP ERVISION EXERCISED BY THE ASSESSEE COMPANY AND CONSEQUENTLY, IN VIEW OF THE DECISION OF THE HONB LE DELHI HIGH COURT IN THE CASE OF NANDA MINT & PINE CHEMICALS LTD (REFER TO SUPRA), THE ASSESSEE D ID NOT HAVE REQUISITE THE 10 WORKERS FOR CLAIMING SUCH DEDUCTION U/S. 80IB OF THE ACT. ITA NO.183/KOL/07-C-GM 3 6. ON A SPECIFIC QUERY BY THE BENCH TO THE LEARNED AR FOR THE ASSESSEE THAT THE ASSESSING OFFICER HAD MENTIONED IN HIS ASSESSMENT ORDER THAT THE ASSE SSEE HAD EMPLOYED 3 EMPLOYEES TO WHOM SALARY WERE DIRECTLY PAID BY THE ASSESSEE AND THE SAID 3 EMPLOYEES WERE NOT THE WORKERS AS REQUIRED U/S. 80IB(2) OF THE ACT. THE LEARNED AR FURTHER SUBMITTE D THAT THE TDS HAVE BEEN MADE ON THE PAYMENT MADE TO M/S. MISRA & CO. AND THERE WAS DIRECT PAYM ENT MADE TO SOME OTHER WORKERS TO THE EXTENT OF RS. 21,221/-. IT WAS, HOWEVER, SUBMITTED BY HIM TH AT HE HAD NO OBJECTION IF THE ISSUE WAS RESTORED T O THE FILE OF THE ASSESSING OFFICER FOR VERIFYING T HE NO. OF WORKERS. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THOUGH THE ASSESSING OFFICER MENTIONS IN PAG E 2 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS EMPLOYED 3 [THREE] EMPLOYEES AND IN PAGE 3 OF THE A SSESSMENT ORDER THE ASSESSING OFFICER MENTIONS THAT THE ASSESSEE COMPANY HAS EMPLOYED NO WORKER. A DMITTEDLY, IN VIEW OF THE DECISIONS OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF PRITHVIRA J BHOORCHAND (REFER TO SUPRA) AS ALSO THE HONBLE BOMBAY HIGH COURT IN THE CASE OF JYOYI PLASTIC WOR KS PVT. LTD (REFER TO SUPRA) AND THE HONBLE DELHI HIGH COURT IN THE CASE OF NANDA MINT & PINE CHEMIC ALS LTD (REFER TO SUPRA) THE CONTRACT WORKERS, WHO ARE HIRED FOR CARRYING ON THE MANUFACTURING AC TIVITY WOULD HAVE TO BE CONSIDERED AS WORKERS OF THE ASSESSEE. HOWEVER, THIS COMES TO ONLY 8 [EIGHT] . AS TO WHETHER THE ASSESSEE HAS ANY CONTROL AND SUPERVISION OVER THE SAID CONTRACT WORKERS IS NOT C LEAR IN SO FAR AS THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER HAS EXTRACTED ONLY PORTION OF THE AGREEMENT AND THE FULL AGREEMENT IS ALSO NOT BEFO RE US. A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOW S THAT THE ASSESSING OFFICER HAS NOT EXAMINED THE MANUFACTURING PROCESS OF THE ASSESSEE AND WHETHER T HE ASSESSEE IS DOING THE MANUFACTURING ACTIVITY AT ALL. MAY BE THE ASSESSING OFFICER ONCE, HE CAME TO THE CONCLUSION THAT THE 8 [EIGHT] WORKERS WERE CONTRACT WORKERS SUPPLIED FROM M/S. MISRA & CO. WE RE NOT LIABLE TO BE TREATED AS WORKERS EMPLOYED BY THE ASSESSEE FOR THE PURPOSE OF SECTION 80IB(2) DID NOT DEEM IT FIT TO GO INTO THE OTHER ISSUES. IN ANY CASE AS THE FACTS ARE NOT CLEAR FROM THE ASSESS MENT ORDER OR THE ORDER OF THE LEARNED COMMISSIONE R OF INCOME-TAX (APPEALS), THE ISSUE OF ELIGIBILITY OF DEDUCTION U/S. 80IB OF THE ACT IN THE CASE OF ASSE SSEE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER F OR RE-ADJUDICATION AFRESH AFTER GRANTING THE ASSES SEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS CLAIM. 7.1 WE MAY ALSO MENTION HERE THAT IN THE COURSE O F HEARING THE LEARNED AR FOR THE ASSESSEE PLACED BEFORE US THE COPY OF THE ORDER OF THE LEARNED COMM ISSIONER OF INCOME-TAX (APPEALS) FOR THE ASSESSMENT YEAR 2004-05 DATED 04-06-2008, WHEREIN T HE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S. 80IB OF THE ACT. IT WAS FURTHER SUBMITTED BY THE LEARNED AR FOR THE ASSESSEE THAT T HIS ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS DATED 04-06-2008 HAS BEEN ACCEPTED BY THE REVENUE AND NO SECOND APPEAL HAS BEEN FILED ITA NO.183/KOL/07-C-GM 4 AGAINST THIS SAID ORDER. THE LEARNED SR. DR HAS NOT BEEN ABLE TO CONFIRM WHETHER THE SAID ORDER HAS BECOME FINAL OR ANY APPEAL HAS BEEN FILED AGAINST T HE SAID ORDER. HOWEVER, A PERUSAL OF THIS ORDER DAT ED 04-06-2008 SHOWS THAT IT DOES NOT TALK OR REFER TO THE ORDER OF THE LD. CIT(A) FOR THE ASSESSMENT YE AR 2003-04. IN THE CIRCUMSTANCES, WE ARE NOT GOING IN TO THE VERACITY OR EXPRESSING ANY VIEWS IN RESPECT OF THE SAID ORDER OF THE LEARNED COMMISSIONER OF INCOM E-TAX (APPEALS FOR THE ASSESSMENT YEAR 2004-05 DATED 04-06-2008, AS IT IS NOT THE SUBJECT MATTER OF THE PRESENT APPEAL.. IN THE CIRCUMSTANCES, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL P URPOSE.. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSE 5 4 6 & 7 58 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 9/11/2 012 *PP/SPS 4 / ((9 :9); / COPY OF THE ORDER FORWARDED TO: 1. . %, / THE APPELLANT : SHREE GOPAL VINIYOG (P) LTD 10/1 D LAL BAZAR ST. BLOCK B 3 RD FL., KOL-1 2 .%, / THE RESPONDENT- I.T.O WARD 5(1), KOL. 3 4. . . (4& / THE CIT, (4& ( )/ THE CIT(A) 5 . <(7 (& / DR, KOLKATA BENCH 6 . GUARD FILE . .9 (/ TRUE COPY, 4&/ BY ORDER, 5 ! /ASSTT REGISTRAR SD/ - SD/ - ( , ) ( PRAMOD KUMAR, ACCOUNTANT MEMBER ) ( !'!# 1%& , ) (GEORGE MATHAN, JUDICIAL MEMBER) ( (( (2 2 2 2 ) )) ) DATE:9/11-2012