SHRI SHRI VIMLESH KUMAR SHARMA, KORBA(CG) V. THE INCOME TAX OFFICER 2(1), BILASPUR(CG)

ITA 193/BIL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4926 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Assessee Lawyers: G S AGARWAL
• Keywords: TDS; Set aside
• Section: 40(a)(ia); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER . / ITA NO. 193 /RPR/20 16 / ASSESSMENT YEAR : 2010 - 11 SHRI VIMLESH KUMAR SHARMA , TRANSPORT CONTRACTOR, BANKI MOGRA, KORBA (C.G.) PAN : AAEFV3587H ....... / APPELLANT / V/S. THE INCOME TAX OFFICER - 2(1), BILASPUR (C.G.) / RESPONDENT A SSESSEE BY : SHRI G.S. AGARWAL REVENUE BY : SHRI D.K. JAIN / DATE OF HEARING : 16 .05 .2019 / DATE OF PRONOUNCEMENT : 17 .05 .2019 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), BILASPUR (C.G.) D ATED 28.03.2016 FOR THE ASSESSMENT YEAR 2010 - 11 AS PER THE FOLLOWING GROUNDS OF APPEAL ON RECORD: 2 ITA NO. 193 / RPR /20 16 A.Y. 2010 - 11 1. T HAT UNDER THE FACTS AND THE LAW, THE LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) ERRED IN CONFIRMING THE AD - HOC DISALLOWANCE OF RS. 1,50,000/ - MADE BY THE LEARNED ASSESSING OFFICER OUT OF DIRECT EXPENSES. PRAYED THAT DISALLOWANCE IS UNDER PRESUMPTION & SURMISES AND BE DELETED. 2. THAT UNDER THE FACTS AND THE LAW , THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FURTHER ERRED IN CONFIRMING THE DISALLOWA NCE OF RS.3,65,317/ - OUT OF RS. 5,63 , 412/ - MADE BY THE LEARNED ASSESSING OFFICER U/S. 40(A)(IA) FOR NO N - DEDUCTION OF TAX ON FINANCE ' CHARGES U/S 194A FROM PAYMEN TS MADE TO VARIOUS NBFCS, REJECTING THE EXPLANATIONS FILED. PRAYED THAT THE DEDUCTEES HAVE CONSIDERED THE INCOME IN THEIR RETURN OF INCOME AND PAID THE TAXES AND THAT NO AMOUNT IS OUTSTANDING AS PAYABLE AS ON END OF THE YEAR TO THE DEDUCTEES. PRAYED THAT D ISALLOWANCE OF RS. 3,65,3 I 7/ - BE DELETED. 2. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN TRANSPORT CONTRACT FILED ITS RETURN OF INCOM E ON 16.01.2011 DECLARING TOTAL INCOME OF RS.59,980/ - WHICH WAS PROCESSED U/S.143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER RE FERRED TO AS THE ACT ). THE CASE WAS SELECTED FOR SCRUTINY UNDER CA SS AND ACCORDINGLY, THE NOTICE U/S.143(2) OF THE ACT WAS ISSUED AND SERVED UPON TH E ASSESSEE FIXING HEARING OF THE C ASE WHEREIN THE LD. AR OF THE ASSESSEE APPEARED BEFORE THE ASSESSING OFFICER TIME TO TIME AND THE CASE WAS DISCUSSED WITH THE ASSESSING OFFICER. THE ASSESSING OFFICER PASSED ASSESSMENT ORDER BY MAKING CERTAIN ADDITIONS/ DISALLOWANCES AS APPEARING IN HIS ORDER. 3 ITA NO. 193 / RPR /20 16 A.Y. 2010 - 11 3. WITH REGARD TO THE GROUND NO.1, IT PERTAINS TO DISALLOWANCE ON ACCOUNT OF CONTRACT RECEIPTS. THE FACTS IN RELATION TO THIS GROUND IS THAT THE ASSESSEE FIRM H AS SHOWN CONTRACT EXPENSES OF R S.81,46,599/ - AS DIRECT EXPENSES. THESE EXPENSES PERTAIN TO SALARY OF S TAFF, FUEL, SPARE PARTS FOR VEHICLES, REPAIRING CHARGES AND FINANCE C HARGES ETC. OUT OF THIS AMOUNT, RS.51,57,899/ - PERTAINS TO R EPAI R AND MAINTENANCE. FURTHERMORE, THE ASSESSING OFFIC ER NOTICED THAT THERE ARE DIRECT EXPENSES ALSO OUT OF WHICH THE ASSESSING OFF ICER HAD NOTED THAT THE VOUCHERS HAD NOT BE EN MAINTAINED PROPERLY. THE ASSESSEE COULD NOT PRODUCE ORIGINAL BILLS AND VOUCHERS, INFLATIO N OF EXPENSES IN SUPPORT OF SOME OF THE EXPENDITURES UNDER DIFFERENT HEADS AND HENCE TO PRO TECT THE INTEREST OF REVENUE A L UMP SUM DISALLOWANCE OF RS.1,50,000/ - WAS MADE AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE . THE FINDING OF THE ASSESSING OFFICER WAS UPHELD BY THE LD. CIT(APPEALS). 4. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE HA VE ALSO ANALYZED THE FACTS AND CIRCUMSTANCES IN THIS CASE. WE FIND THAT ORIGINAL BILLS , VOUCHERS AND RELEVANT DOCUMENTS WERE NOT PRODUCED BY THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER HAS N OTED IN HIS ORDER THAT CERTAIN BILLS, VOUCHERS WERE DEFINITELY BEFORE HIM THOUGH NOT BEING SATISFIED. THEREFORE, NEITHER THE ASSESSING OFFICER NOR THE LD. CIT(APPEALS) HAS DENIED THE GENUINE NE SS OF THE CONTRACT RECEIPTS. THE REVENUE HAS NOT 4 ITA NO. 193 / RPR /20 16 A.Y. 2010 - 11 BROUGHT IN ANY CONTRARY MATERIAL ON RECORD TO DEMONSTRATE THAT THERE IS ANY LOSS OF THE REVENUE. IN SUCH CIRCUMSTANCES, DISALLOWANCE OF RS.1,50,000/ - ASSUMES THE CHARACTER OF AD - HOC DISALLOWANCE WHICH IS NOT PERMISSIBLE WITHIN THE FRAME WORK OF INCOME TAX STATUES. WE TAKE GUIDANCE FROM THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL , RAIPUR IN THE CASE OF ACIT VS. M/S. MANGILAL PAGARIA IN ITA NO.54/BLPR/2011 WHEREIN THE TRIBUNAL HAS HELD AS UNDER: 9.WE H AVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL B EFORE US. WE FIND THAT ASSE S SEE - FIRM HAD FURNISHED BOOKS OF ACCOUNT AND AUDITED STATEMENT OF ACCOUNTS AND THE AO WAS NOT ABLE TO PIN - POINT THE DEFECTS IN SUCH DOCUMENTS, THAT THE QUANTITY OF MATERIAL USED IN LABOUR CHARGES INCURR ED WERE CERTIFIED FROM TIME TO TIME BY THE COMPETENT AUTHORITIES AND THE AO WAS NOT ABLE TO NEGATE THE CLAIM MADE BY THE ASSESSEE. IT IS ALSO FOUND THAT THE AO HAD NO T DISPUTED ABOUT THE LABOUR AN D CONTINGENCY PAYMENT THOUGH HE HAD MADE AN AD - HOC DISALLOWA NCE. WE ARE OF THE OPINION THAT THE TAX LIABILITY CANNOT BE FASTENED TO THE ASSESSEE BY THE AO W ITHOUT BRI NGING SOME POSITIVE EVIDENCE AGAI NST THE A SSESSEE ON RECORD, THAT THE DISA LLO WANCE OF ADDITION HAS TO BE BACKED BY SOME DOCUM ENTARY/ORAL EVIDENCE WHICH COULD PROVE THAT THE CLAIM MADE BY IT OF AN EXPENDITURE WAS NOT GENUINE. IN THE CASE UNDER CONSIDERATION, THE AO HAS MADE A LUMP SUM DISALLOWANCE, BUT SAME IS NOT BACKED BY ANY EVIDENCE. CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE UNDER CONS IDERATION, WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEG AL OR FACTUAL INFIRMITY .THEREFORE, CONFIRMING HIS ORDER, WE DECIDE GROUND NO. 2 AGAINST THE AO. RESPECTFULLY, FOLLOWING THE AFORESAID DECISION OF THE CO - ORDINATE BENCH OF THE TRIBU NAL, WE ALLOW THE GROUND NO. 1 RAISED IN APPEAL BY THE ASSESSEE. 5 ITA NO. 193 / RPR /20 16 A.Y. 2010 - 11 5. THAT WITH REGARD TO GROUND NO.2, THE LD. AR OF THE ASSESSEE SUBMITTED THAT DISALLOWANCE HAS BEEN MADE BECAUSE CERTAIN CERTIFICATES OF THE CHARTERED ACCOUNTANTS WAS NOT ACCEPTED BY THE LD. CIT(APPEALS). THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL, RAIPUR IN ITA NO.69/RPR/2015 FOR THE ASSESSMENT YEAR 2010 - 11 IN THE CASE OF PRADEEP CHAND RA JHA VS. DCIT , THE LD. AR OF THE ASSESSEE SUBMITTED THAT THIS ISSUE WAS RESTORED TO THE FILE OF T HE ASSESSING OF FICER FOR THE PURPOSE OF VERIFICATION. IT IS THE CONTENTION OF THE LD. AR OF THE ASSESSEE THAT CE RTIFICATES FROM CHARTERED ACCOUNTANTS WAS NOT ACCEPTED BY THE LD. CIT(APPEALS) AND IN THE INTEREST OF JUSTICE, THE ASSESS ING OFFICER MAY VERIFY THE VERACITY OF THESE CERTIFICATES OF THE CHARTERED ACCOUNTANTS AND FOR THIS LIMITED PURPOSE, THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. 6. PER C ONTRA, THE LD. DR HAS PLACED RELIANCE ON THE ORDER OF THE SUB ORDINATE AUTHORITIES. 7. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS AND WE OBSERVED THAT IN THE CASE OF THE ASSESSEE, CERTIFICATES OF THE CHARTERED ACCOUNTANTS WAS NOT ACCEPTED BY THE LD. CIT(APPEALS). ON THE SIMILAR ISSUE IN ITA NO.69/RPR/2015 (SUPRA.), THE CO - ORDINATE BENCH OF THE TRIBUNAL HAS HELD AS FOLLOWS: 6 ITA NO. 193 / RPR /20 16 A.Y. 2010 - 11 9.WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE LOWER AU THORITIES AND MATERIAL AVAILABLE ON RECORD. IN RESPECT OF THE FIRST DISPUTED ISSUE U/S.40( A)(IA) OF THE ACT, THE CONTENTION OF THE LD. AR THAT THE ASSE SSEE IS HAVING CERTIFICATE OF C.A. ISSUED IN RESPECT OF TDS AND DEMONS T RATED BEF O RE US IN PAPER BOOK AT PAGE 1 TO 4 EXPLAINING FORM NO.27A ISSUED BY THE C.A. ON THIS ISSUE, THE LD. DR SUBMITTED THAT THIS INFOR MATION WAS NOT AVAILABLE WITH THE ASSESSING OFFICER . CONSIDERING THE OVERALL ASPECT OF THE FACT THAT NBCSS HAVE OFFERED ITS INCOME, THE MATTER HAS TO BE VERIFIED BY THE ASSESSING OFFICER. AC CORDINGLY, WE REMIT THE ISSUE TO THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE AND PASS ORDER AS PER LAW. RESPECTFULLY, FOLLOWING THE SAME PROPOSITION, WE SET ASIDE THE ORDER OF THE LD. CI T(APPEALS) ON THIS ISSUE AND RESTORE T HE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR V ERIFICATION OF THE CERTIFICATES OF THE CHARTERED ACCOUNTANTS. THE ASSESSING OFFICER SHALL GRANT REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE IN ACCORDANCE WITH LAW. HENCE, GROUND NO. 2 RAISED IN APPEA L BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED ON 17 TH DAY OF MAY , 201 9 . SD/ - SD/ - MITHA LAL MEENA PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / RAIPUR ; / DATED : 17 TH MAY, 2019. SB 7 ITA NO. 193 / RPR /20 16 A.Y. 2010 - 11 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE COMMISSIONER OF INCOME TAX (APPEALS), BILASPUR (C.G.) 4. THE COMMISSIONER OF INCOME TAX, BILASPUR (C.G.) 5. , , , / DR, ITAT, RAIPUR BENCH, RAIPUR. 6. / GUARD FILE. // TRUE C O PY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, RAIPUR.