Gayathri Constructions, CHENNAI V. ACIT, CHENNAI

ITA 2243/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9769 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 11-12-2015
• Court: TRIBUNAL
• Section: 143(3); 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.2243/MDS/2015 / ASSESSMENT YEAR : 2011-12 M/S GAYATHRI CONSTRUCTIONS 120/3 APSARA VIKAS APARTMENTS ANNA NAGAR WEST CHENNAI 600 102 VS. THE ASSTT. C OMMISSIONER OF INCOME-TAX NON-CORPORATE CIRCLE 7 CHENNAI [PAN AAHFG 5993 R ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI K.BALASUBRAMANIAN, ADVOCATE - TAX CONSULTANT /RESPONDENT BY : SHRI SASIKU MAR , JCIT / DATE OF HEARING : 24 - 02 - 2016 ! / DATE OF PRONOUNCEMENT : 01 - 04 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-7, CHENNA I, DATED 3.11.2015 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2. SHRI K. BALASUBRAMANIAN, LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE ASSESSEE-FIRM IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. DURING THE YEAR UNDER CONSIDERATIO N, THE ASSESSEE ITA NO.2243/15 :- 2 -: CLAIMED LABOUR CHARGES OF ` 3.04 CRORES AND MATERIAL EXPENSES OF ` 5.02 CRORES. THE ASSESSING OFFICER DISALLOWED 20% OF THE LABOUR CHARGES AND MATERIAL EXPENSES. ACCORDING TO THE LD . COUNSEL, THE ASSESSEE FILED AN APPLICATION U/S 154 OF THE ACT. THE ASSESSING OFFICER AFTER CONSIDERING THE APPLICATION OF THE ASSESSEE, ALLOWED THE CLAIM OF MATERIAL EXPENSES, HOWEVER, WITH REGARD TO LABOUR C HARGES, ALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT WHICH REFL ECTED IN THE BANK STATEMENT. ACCORDING TO THE LD. COUNSEL, THE TOTAL DISALLOWANCE AS PER THE ASSESSING OFFICERS ORDER IS ` 46.95,340/- INSTEAD OF ` 60,19,040/- IN THE ASSESSMENT ORDER PASSED U/S 143(3). ACCOR DING TO THE LD. COUNSEL, THE ASSESSEE HAS PRODUCED ALL THE BILLS, VOUCHERS AND BANK STATEMENTS BEFORE THE ASSESSING OFFICER, THEREFORE, THERE IS NO NEED FOR ANY DISALLOWANCE ON ESTIMATE BASIS. 3. ON THE CONTRARY, SHRI SASIKUMAR, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER ORIGINALLY DISALLOWED A SUM OF ` 60,19,040/- BEING 20% OF THE LABOUR CHARGES AND ANOTHER SUM OF ` 1,00,47,123/- BEING 20% OF THE MATERIAL EXPENDITURE. THE ASSESSING OFFICER ACCEPTED THE CL AIM OF THE ASSESSEE IN THE PETITION U/S 154 WITH REGARD TO MA TERIAL EXPENDITURE OF ` 1,00,47,123/-. HOWEVER, WITH REGARD TO LABOUR CHARG ES, THE ASSESSING OFFICER RESTRICTED THE DISALLOWANCE TO ` 46,95,340/-. ACCORDING TO THE ITA NO.2243/15 :- 3 -: LD. DR, IN THE PROCEEDINGS U/S 154, THE ASSESSING OFFICER CAN ONLY RECTIFY AN ERROR WHICH IS PRIMA FACIE ON RECORD. I N THIS CASE, THE ORIGINAL DISALLOWANCE WAS FOR NON-PRODUCTION OF BIL LS AND VOUCHERS. THEREFORE, IN THE PROCEEDING U/S 143(3), THE ASSES SING OFFICER HAS DISALLOWED 20% OF THE LABOUR CHARGES AND MATERIAL E XPENDITURE. ONCE THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON ESTIMATE BASIS AT 20%, IT CANNOT BE REEXAMINED IN A PROCEEDI NG U/S 154. ACCORDING TO THE LD. DR, THE PROCEEDING U/S 154 IS ONLY TO RECTIFY AN ERROR WHICH IS APPARENT ON THE FACE OF THE RECORD. IN THIS CASE, THE ASSESSING OFFICER WAS VERY REASONABLE AND HE DELETE D THE ADDITION MADE ON MATERIAL EXPENDITURE TO THE EXTENT OF ` 1,00,47,123/- AND ALSO REDUCED THE DISALLOWANCE IN RESPECT OF LABOUR CHARG ES. THEREFORE, ACCORDING TO THE LD. DR, THE ASSESSEE CANNOT HAVE ANY GRIEVANCE AT ALL. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PROCEEDING U/S 154 OF THE ACT IS TO RECTIFY AN ERROR WHICH IS APPA RENT ON THE FACE OF THE RECORD. IN THE CASE BEFORE US, 20% OF THE LAB OUR EXPENDITURE AND MATERIAL EXPENDITURE WAS DISALLOWED IN THE ASSESSME NT PROCEEDINGS U/S 143(3) OF THE ACT. SUBSEQUENTLY, ON THE APPLIC ATION FILED BY THE ASSESSEE, THE ASSESSING OFFICER ALLOWED THE MATERIA L EXPENDITURE TO THE ITA NO.2243/15 :- 4 -: EXTENT OF ` 1,00,47,123/- AND ALSO REDUCED THE LABOUR CHARGES T O ` 46,95,340/- INSTEAD OF ` 60,91,040/-. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT EXAMINATION OF THE BOOKS OF ACCOUNT AND OTHER RELEVANT MATERIAL FOR THE PURPOSE OF COMPUTING THE DISALLOWANCE TOWARDS LABOUR CHARGES AND MATERIAL EXPENDITURE CAN NOT BE SUBJECT MATTER OF PROCEEDING U/S 154 OF THE ACT . AS RIGH TLY SUBMITTED BY THE LD. DR, THE PROCEEDING U/S 154 IS ONLY TO RECTIFY AN ERROR WHICH IS APPARENT ON THE FACE OF THE RECORD. IN THE CASE BE FORE US, THE ERROR, IF ANY, CANNOT BE SAID AS APPARENT ON THE FACE OF THE RECORD. A DETAILED INVESTIGATION NEEDS TO BE DONE ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD TO FIND OUT WHETHER THE EXPENDITURE DISAL LOWED AT 20% IS CORRECT OR NOT. EVEN THOUGH THE ASSESSEE CLAIMS T HAT BOOKS OF ACCOUNT, VOUCHERS AND BANK STATEMENTS WERE PRODUCED BEFORE THE ASSESSING OFFICER, THE FACT REMAINS THAT THE VOUCHE RS WERE SELF-MADE VOUCHERS, THEREFORE, THE INFLATION OF EXPENDITURE CANNOT BE RULED OUT. BY TAKING INTO CONSIDERATION THE MATERIAL AVAILABL E ON RECORD, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT( A) HAS RIGHTLY RESTRICTED THE DISALLOWANCE TO 10% INSTEAD OF 20% D ISALLOWED BY THE ASSESSING OFFICER. THIS TRIBUNAL DO NOT FIND ANY R EASON TO INTERFERE WITH THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAM E IS CONFIRMED. ITA NO.2243/15 :- 5 -: 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST APRIL, 2016, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 1 ST APRIL, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF