DCIT, Gurgaon V. Sh. Deepak Bansal, Gurgaon

ITA 2297/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3927 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Additional evidence
• Section: 142(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO.2297/DEL/2015 A.Y. : 2008-09 DCIT, CIRCLE 1(1), GURGAON VS. SH. DEEPAK BANSAL, J-4/32, 1 ST FLOOR, DLF CITY, PHASE-II, GURGAON (PAN: AHKPB1208L) (ASSESSEE) (RESPONDENT) REVENUE BY : MS. ASHIMA NEB, SR. DR ASSESSEE BY : NONE ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THIS APPEAL AGAINST THE IMPUGN ED ORDER DATED 04.2.2015 OF THE LD. CIT(A)-I, NEW DELHI RELEVA NT TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED IN THIS APPEAL READ AS UNDER: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE UNDER THE HEADS WAGES AND SALARY, SITE PREPARATION, SHUTTERING MATERIAL, MACHINERY MAINTENANCE, SANITARY 2 AND PLUMBING MATERIAL, CARTAGE INWARDS, FREIGHT CARTAGE AND TRANSPORT EXPENSES (RS. 1,39,77,399/-) U/S. 40(A(IA) WITHOUT ESTABLISHING THE GENUINENESS OF THE ADDITIONAL EVIDENCE PRODUCED DURING THE APPELLATE PROCEEDINGS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE UNDER THE HEADS WAGES AND SALARY, SITE PREPARATION SHUTTERING MATERIAL, MACHINERY MAINTENANCE, SANITARY AND PLUMBING MATERIAL, CARTAGE INWARDS, FREIGHT CARTAGE AND TRANSPORT EXPENSES (RS. 1,39,77,399/-) U/S. 40A(IA) BY RELYING UPON THE DOCUMENTS PRODUCED DURING THE APPELLATE PROCEEDINGS AS ADDITIONAL EVIDENCE EVEN THOUGH THE AO HAS RAISED CONCERNS ABOUT THEIR GENUINENESS. 3. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND GROUNDS OF APPEAL OR AT THE TIME OF HEARING OF APPEAL. 3 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED ITS E-RETURN ON 25.9.2008 DECLARING INCOME OF RS.1,51,3 00/- WHICH WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 196 1 (HEREINAFTER REFERRED AS THE ACT) ON 16.10.2009 AT THE RETURNED IN COME. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY THROU GH CASS. ACCORDINGLY, STATUTORY NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 4.8.2009 BY THE AO. AGAIN NOTICES U/S. 143(2) OF THE ACT WAS ISSUED ON 11.9.2009 AND 22.9.2009 AND SERVICE OF NO TICE WAS ALSO EFFECTED THROUGH AFFIXTURE ON 18.9.2009 BY THE AO. THE CASE OF THE ASSESSEE WAS RECEIVED ON TRANSFER. ACCORDINGLY, NOTI CE U/S. 142(1) OF THE ACT ALONGWITH QUESTIONNAIRE WAS ISSUED BY THE AO ON 15.6.2010 FIXING THE CASE FOR 24.6.2010. AGAIN NOTI CE U/S. 143(2) OF THE ACT AND 142(1) OF THE ACT ALONGWITH DETAILED QUES TIONNAIRE WAS ISSUED ON 16.8.2010 FIXING THE CASE FOR 30.8.20 10. THE ASSESSEE HAS NOT COMPLIED TO THE NOTICES ISSUED ON 15.6.2010 AND ON 16.8.2010. THEREFORE, A SHOW CAUSE NOTICE FOR NO N COMPLIANCE TO NOTICES ISSUED U/S. 143(2) OF THE ACT AND U/S. 142(1) OF THE ACT WAS ISSUED ON 15.10.2010 FOR FIXING THE CASE FOR 27.10.2 010, BUT NONE APPEARED ON THE FIXED DATE AND CASE WAS FINALLY ADJO URNED FOR 13.12.2010 VIDE NOTICE DATED 9.12.2010 AND AGAIN ON 13.12.2010 NOBODY APPEARED NOR FURNISHED ANY INFORMATION/ DOCU MENT AS INQUIRED. ON ACCOUNT OF FAILURE ON THE PART OF THE AS SESSEE, THE AO 4 COMPLETED THE ASSESSMENT AT RS. 2,21,76,212/- U/S. 143 (3) OF THE ACT VIDE ORDER DATED 14.12.2010 AND MADE THE VARIOUS ADDITIONS, ON THE BASIS OF THE SHOW CAUSE NOTICE DATED 09.12.2010 AS MENTIONED IN THE ASSESSMENT ORDER AT PAGE NO. 3 TO 7 . AGAINST THE AFORESAID ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A)-I, GURGAON, WHO VIDE HIS IMPUGNED ORDER DA TED 04.02.2012 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGG RIEVED WITH THE ORDER OF THE LD. CIT(A)-I, GURGAON, THE REVENUE IS I N APPEAL BEFORE THE TRIBUNAL. 4. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 5 . IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE WAS SENT BY THE REGISTERED AD POST BUT NOBODY PRESENT ON BEHALF OF THE ASSESSEE AND NOR ANY APPLICATION FOR ADJOURNMENT HAS BEEN FILED. KE EPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ISSUE INVOLVED IN THE PRESENT APPEAL, WE ARE OF THE VIEW THAT NO USEFUL P URPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND AGAIN TO THE ASSES SEE ON THE SAME ADDRESS, THEREFORE, WE ARE DECIDING THE PRESENT APP EAL EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 5 6. WE HAVE HEARD LD. DR AND PERUSED THE RELEVANT REC ORDS, ESPECIALLY THE IMPUGNED ORDER. THE GROUNDS RAISED BY THE REVENUE ARE COMMON AND IDENTICAL I.E. RELATING TO GENUINENES S OF THE ADDITIONAL EVIDENCE PRODUCE DURING THE APPELLATE PR OCEEDINGS ON THE BASIS OF WHICH THE LD. CIT(A) HAS DELETED THE ADD ITION OF RS. 1,39,77,399/- UNDER THE HEADS WAGES AND SALARY, SIT E PREPARATION, SHUTTERING MATERIAL, MACHINERY MAINTENANCE, SANITARY A ND PLUMBING MATERIAL, CARTAGE INWARDS, FREIGHT CARTAGE AND TRANSP ORT EXPENSES, U/S. 40(A(IA) OF THE ACT. ON THIS ISSUE, WE FIND THA T THE ASSESSEE DURING THE APPELLATE PROCEEDINGS HAS FILED THE ADDITI ONAL EVIDENCES VIDE HIS LETTER DATED 17.1.2011 STATING THEREIN AS UND ER:- I (ASSESSEE) WAS NOT GIVEN PROPER OPPORTUNITY OF BEI NG HEARD AS MY COUNSEL REQUESTED FOR AN ADJOURNMENT O N 13.12.2010 BUT THE AO WITHOUT CONSIDERING THE REQU EST PASSED THE ASSESSMENT ORDER ON 14.12.1010 THROUGH REASONABLE TIME WAS STILL AVAILABLE. I (ASSESSEE) WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE BEFORE THE AO AND THESE EVIDENCES ARE RELEVANT TO THE GROUNDS OF APPEAL. I MYS ELF WAS NOT ABLE TO ARGUE MY CASE INDEPENDENTLY WITHOUT THE HELP OF MY COUNSEL. 6 6.1 WE FURTHER NOTE THAT LD. CIT(A) SENT THE ADDITIONAL EVIDENCE TO THE AO FOR EXAMINATION BOTH WITH REGARD TO ITS ADMISSIBI LITY AS WELL AS THE MERITS OF ADDITION MADE AND IN THE LIGHT OF ADD ITIONAL EVIDENCE, THE AO SUBMITTED THE FOLLOWING REPORT :- ''AS FAR AS CIRCUMSTANCES OF THE CASE ARE CONCERNED, I AM OF THE OPINION THAT THE ASSESSEE WAS NEVER REFUSED TO ADMIT THE EVIDENCES PRODUCED BY HIM NOR THERE CERTAIN GENUINE CIRCUMSTANCES WHICH PREVENTED HIM TO PRODUCE THE EVIDENCE WHICH HE WAS CALLED UPON AS NO SUCH COMMUNICATION HAS BEEN RECEIVED IN THIS OFFICE. THEREFORE, ADDITIONAL EVIDENCES SHOULD NOT BE CONSIDE RED IN VIEW OF THE CIRCUMSTANCES AND RULE 46 A OF THE INC OME TAX RULES 1962'. 6.2 WE FURTHER NOTE THAT ADMISSIBILITY OF ADDITIONAL E VIDENCE IS GOVERNED BY RULE 46A OF INCOME TAX RULES WHICH LAYS DOWN THE FOLLOWING FOUR CONDITIONS IN WHICH ADDITIONAL EVIDEN CE CAN BE ADMITTED. '(A) WHERE THE A.O HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR 7 (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE A.O. (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE A.O. ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL: OR (D)WHERE THE A.O HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL.' 6.3 WE OBSERVE THAT ASSESSEE IN HIS LETTER BEFORE THE LD. CIT(A) SUBMITTED THAT THE A.O DID NOT GIVE HIM ADJOURNMENT WHE N HE REQUESTED FOR THE SAME ON 13-12-2010 AND WENT ON TO P ASS THE ASSESSMENT ORDER ON 14-12-2010. THE INFORMATION WHIC H THE ASSESSEE WANTED TO SUBMIT INCLUDED WAGES AND WORKER B ENEFIT EXPENSES, SHUTTERING MATERIAL EXPENSES, EXPENSES ON ACCOUNT OF MACHINERY MAINTENANCE, FREIGHT CARTAGE AND TRANSPORT EXPENSES. THE EVIDENCE HAD TO BE PROCURED FROM KATHUA DISTRIC T OF J&K WHERE THE WORK WAS UNDERTAKEN BY THE ASSESSEE, WHICH NEEDE D SOME TIME. THE A.O ON THE OTHER HAND CONTENDED THAT ENOUGH O PPORTUNITY WAS GIVEN TO THE ASSESSEE WHICH WAS NOT AVAILED OF B Y HIM AND THUS 8 THE ADDITIONAL EVIDENCE SHOULD NOT BE ADMITTED. ON GOIN G THROUGH THE FACTS OF THE CASE, IT WAS OBVIOUS THAT THE FATE OF A DDITION MADE BY THE A.O HINGES CRITICALLY ON THE ADDITIONAL EVIDE NCE SUBMITTED BY THE ASSESSEE. FURTHERMORE, THERE IS SUBSTANCE IN ASSESS EES SUBMISSIONS BEFORE THE LD. CTI(A) THAT GIVEN THE TYPE O F EVIDENCE REQUIRED BY THE AO, HE COULD HAVE BEEN GIVEN ONE MOR E OPPORTUNITY TO THE ASSESSEE TO FILE THE EVIDENCE BEFORE PASSING THE ASSESSMENT ORDER. 6.4 IN ADDITION TO ABOVE, WE FIND THAT THE JUDGEMEN T OF BOMBAY HIGH COURT IN THE CASE OF PRABHAVATI S. SHAH VS CIT ( 1998) 231 ITR 1 BOMBAY IS EXTREMELY IMPORTANT IN THIS CASE WHEREIN I T HAS BEEN HELD THAT RESTRICTIONS PLACED ON ASSESSEE BY RULE 46 A TO PRODUCE ADDITIONAL EVIDENCE DO NOT AFFECT POWERS OF APPELLATE ASSISTANT COMMISSIONER (AAC) U/S 250 OF THE INCOME TAX ACT. IN THIS CASE, SUMMONS WERE ISSUED TO CREDITORS OF ASSESSEE FROM WH OM HE HAD TAKEN LOAN. THESE SUMMONS CAME BACK UNSERVED AND LOA N AMOUNT WAS TREATED AS UNDISCLOSED INCOME. BEFORE AAC ASSESSE E SOUGHT TO PRODUCE DOCUMENTARY EVIDENCE WHICH WAS REFUSED TO B E ENTERTAINED. IT WAS HELD THAT AAC SHOULD HAVE ADMITTED EV IDENCE IN EXERCISE OF POWER U/S 250(5). 9 6.5 KEEPING IN VIEW OF THE ABOVE SAID PRECEDENT, THE LD. CIT(A) HAS RIGHTLY HELD THAT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS SHOULD BE ADMITTED, HENCE, WE UPHOLD THE ACTION OF THE LD. CIT(A) ON THE ISSUE. AS REGARDS THE MERITS OF THE CASE, WE FIND THAT AO MADE THE ADDITION OF RS. 1,71,85,574/- ON ACCOUNT OF NON-DEDUCTION OF TDS ON PAYMENTS MADE BY THE ASSESSEE. THE AO ON PERUSAL OF THE TRA DING AND PROFIT AND LOSS ACCOUNT NOTICED THAT THE ASSESSEE HA D MADE PAYMENTS OF RS. 1,71,85,574/- WITHOUT DEDUCTING TA X AT SOURCE. IN THE ABSENCE OF ANY DETAILS PROVIDED BY THE ASSESSEE W HICH COULD HAVE ENABLE THE AO TO ASCERTAIN THE NATURE OF THESE EXPENSES AND TO EXAMINE THE LIABILITY OF THE ASSESSEE TO TDS IN RES PECT OF THESE EXPENSES, THE AO HELD THAT THE ASSESSEE BY NOT DEDUCTI NG TAX AT SOURCE VIOLATED PROVISIONS OF TDS RESULTING IN DISAL LOWANCE OF RS. 1,71,85,574/- AS PER PROVISIONS OF SECTION 40(A)(I A) OF THE ACT. AGAINST THE AFORESAID ADDITION, THE ASSESSEE APPEALE D BEFORE THE LD. CIT(A). WE NOTE THAT THE AO MADE THE ADDITION PRI MARILY IN VIEW OF THE FACT THAT THE ASSESSEE DID NOT GIVE ANY D ETAILS REGARDING THE SAID EXPENSES AS A RESULT OF WHICH THE ASSESSEE S LIABILITY OF TDS COULD NOT BE EXACTLY ASCERTAINED BY THE AO. HOWEVE R, DURING THE COURSE OF APPELLATE PROCEEDINGS THE ASSESSEE GAVE ONE VOLUME OF PAPER BOOK OF AROUND 250 PAGES WHICH INCLUDED DE TAILS OF THE 10 AFORESAID EXPENSES AND THESE DETAILS WERE SENT TO THE A O FOR HIS COMMENT, WHO SUBMITTED HIS COMMENTS VIDE HIS REMAND REPORT BEFORE THE LD. CIT(A). LD. CIT(A) AFTER ADMITTING TH E ADDITIONAL EVIDENCES AND EXAMINING THE REMAND REPORT HAS GIVEN H IS FINDING FROM PAGE NO. 14 TO 19. THE RELEVANT FINDINGS OF THE LD. CIT(A) ARE REPRODUCED AS UNDER:- 8.4.A) WAGES AND SALARY (RS. 65,45,311/-). THE A.O DISALLOWED THE ENTIRE WAGES AND WORKERS BENEFIT EXPENSES AMOUNTING TO RS. 65,45,311/- ON THE GROUND THAT THE APPELLANT COULD NOT GIVE ANY DETAILS AND THUS HE PROCEEDED TO HOLD THAT THE ENTIRE WAGES AND WORKER EXPENSES WERE SUBJECT TO TDS AND THE. NON-DEDUCTION OF TDS RESULTED IN ATTRACTION OF PROVISIONS OF SECTION 4G(A)(IA) OF THE INCOME TAX ACT. THE ADDITIONAL EVIDENCE SUBMITTED INCLUDED LEDGER COPY OF WAGES OF LABOUR CHARGES ALONG WITH THE DAILY/MONTHLY ATTENDANCE SHEET OF EMPLOYEES. AS PER THESE DETAILS, THERE WERE NO EMPLOYEES IN RESPECT OF WHICH TDS PROVISIONS WERE APPLICABLE. THE A.O ON THE OTHER HAND PROCEEDED TO REJECT THE SALARY/WAGES REGISTER ON THE GROUND THAT THE EVIDENCE MUST HAVE BEEN FABRICATED. IN ORDER TO 11 SUBSTANTIATE THE SAME, THE A.O STATED THAT AT SOME INSTANCES SEX OF THE EMPLOYEE HAD BEEN MENTIONED INSTEAD OF RANK AND VICE-A-VERSA. IN THE REJOINDER TO THE REMAND REPORT THE APPELLANT SUBMITTED THAT THE A.O HAD NO BASIS TO PROVE THAT THE EVIDENCE IN THE FORM OF WAGES REGISTER WAS FABRICATED. FURTHERMORE, IT WAS SUBMITTED THAT MENTIONING OF SEX INSTEAD OF RANK AND VICE-A-VERSE WAS A CLERICAL MISTAKE AND SHOULD NOT BE GIVEN UNDUE IMPORTANCE. THE STAFF OF THE APPELLANT WORKING IN KATHUA DISTRICT OF J&K WHERE THIS PROJECT WAS UNDERTAKEN WAS NOT VERY EDUCATED AND THERE WAS EVERY LIKELIHOOD OF COMMITTING SUCH A MISTAKE. I AGREE WITH THE CONTENTIONS OF THE APPELLANT. THE WAGES/SALARY WHICH WERE DISALLOWED WERE IN RESPECT OF WORKERS/EMPLOYEES ENGAGED IN A PROJECT IN A KATHUA DISTRICT OF J&K. THE APPELLANT BY PRODUCING THE WAGES/SALARY REGISTER COULD SUBSTANTIATE THE FACT THAT THERE WAS NO EMPLOYEE/WORKER WHOSE INCOME WAS ABOVE THE INCOME LIMIT IN RESPECT OF WHICH TDS PROVISIONS ARE APPLICABLE. THE A.O'S OBSERVATIONS THAT THE EVIDENCE IN THE FORM OF WAGES 12 REGISTER HAVE BEEN FABRICATED DOES NOT HAVE ANY BASIS AND IS THUS REJECTED. ACCORDINGLY I HOLD THAT SINCE TDS- PROVISIONS WERE NOT APPLICABLE IN RESPEC T OF WAGES/ SALARY AMOUNTING TO RS. 65,45,311/ -, NO ADDITION WAS CALLED FOR BY INVOKING THE PROVISIONS O F SECTION 40(A)(IA) OF THE INCOME TAX ACT. ACCORDINGLY THE APPELLANT GETS A RELIEF OF RS. 65,45,311/- B) SIT PREPARATION EXPENSES:- AS IN THE CASE OF WAGES/SALARY, NON- SUBMISSIONS OF DETAILS BY THE APPELLANT LED TO THE ADDITION OF RS. 36,61,340/- BY THE A.O U/S 40(A)(IA) OF THE INCOME TAX ACT. AS PER THE ADDITIONAL EVIDENCE SUBMITTED, THIS EXPENDITURE WAS INCURRED IN THE PROJECT UNDERTAKEN AT KATHUA DISTRICT OF J&K TO IMPROVE THE CONDITION OF LAND UNDER CONSTRUCTION IN WHICH THERE WERE A LOT OF PITS AND HOLES. THE EXPENDITURE WAS INCURRED IN RELATION TO LAND FILLING WORK. SOME SAMPLE VOUCHERS WERE ALSO ENCLOSED IN SUPPORT OF THE EXPENSES INCURRED. GIVING THE DETAILS OF THESE EXPENSES, THE APPELLANT SUBMITTED THAT SINCE THIS WORK WAS DONE THROUGH LABOUR, THERE WAS NO TDS LIABILITY. THE A.O 13 IN HIS REMAND REPORT SUBMITTED THAT THE DETAILS WERE NOT PROPER AS NO ADDRESSES OR PAN OF THE LABORERS ENGAGED IN SITE PREPARATION WERE GIVEN. THE APPELLANT IN HIS REJOINDER SUBMITTED THAT SINCE THE LAND FILLINGS PAYMENTS WERE MADE TO LABOURERS IN KATHUA DISTRICT OF J&K, THESE PAYMENTS WERE MADE IN CASH TO PEOPLE RESIDING IN SMALL VILLAGES, PEOPLE WHO LIVE IN CLUSTERS OR MIGRATE FREQUENTLY TO DIFFERENT PLACES AS PER AVAILABILITY OF JOB. IT WAS NO T POSSIBLE TO GIVE THEIR ADDRESSES AND PAN'S. AFTER HAVING CONSIDERED THE NATURE OF THESE EXPENSES, THE EVIDENCE SUBMITTED TOGETHER WITH THE EXPLANATION GIVEN BY THE APPELLANT IN HIS REJOINDER TO REMAND REPORT, I AGREE WITH HIS SUBMISSIONS AND HOLD THAT THERE IS NO BASIS IN A.O'S SUBMISSION THAT THE APPELLANT SHOULD HAVE GIVEN ADDRESSES AND PAN PARTICULARS OF THESE PERSONS. ACCORDINGLY ON THE BASIS OF EVIDENCE GIVEN BY THE APPELLANT TOGETHER WITH THE FACTS OF THE CASE, I HOLD THAT THE A.O ERRED IN MAKING THE ADDITION OF 36,61,340/- ON ACCOUNT OF SITE PREPARATION EXPENSES 14 C) C,D,E- SHATTERING MATERIAL, MACHINERY' MAINTENANCE EXPENSES, SANITARY AND PLUMBING MATERIAL- THE ASSESSEE INCURRED A SUM OF RS. 25,96,311/-, RS. 15,63,314/- AND RS. 12,68,431/- RESPECTIVELY UNDER THESE HEADS. THESE EXPENSES WERE MADE FOR PURCHASE OF SHUTTERING MATERIAL, SANITARY MATERIAL AND FOR MAINTENANCE OF MACHINERY. ON A PERUSAL OF THE DETAILS GIVEN IN SUPPORT OF THESE EXPENSES, THE A.O FOUND THAT OUT OF TOTAL EXPENSES OF RS. 54,28,055/-, THE APPELLANT GAVE ADDITIONAL EVIDENCE IN RESPECT OF RS. 16,69,317/-. OUT OF THIS AMOUNT, 53% OF THE EXPENSES WERE INCURRED IN CASH AND WERE NOT SUPPORT BY VOUCHERS. ON THIS BASIS, THE A.O HELD THAT 53% OF THE TOTAL EXPENSES CANNOT BE TREATED AS GENUINE, WHICH MEANS THAT 47% OF THE TOTAL EXPENSES AMOUNTING TO RS. 25,52,185/- WERE ADEQUATELY SUPPORTED AND HENCE NEED TO BE ALLOWED. I AGREE WITH THE DETAILED EXAMINATION OF EXPENSES DONE BY THE A.O AND ACCORDINGLY AN AMOUNT OF RS. 28,78,870/- IS DISALLOWED OUT OF A TOTAL AMOUNT OF RS. 54,28,055/- DISALLOWED ON 15 ACCOUNT OF SANITARY MATERIAL, MACHINERY MAINTENANCE, SHUTTERING AND PLUMBER MATERIAL. THE APPELLANT ACCORDINGLY GETS A RELIEF OF RS. 25,52,185/-. D) F,G,H - THESE REPRESENT DISALLOWANCE ON ACCOUNT OF CARRIAGE INWARD(RS. 5,63,150/-), LEGAL AND PROFESSIONAL CHARGES (RS. 1,23,664/-) AND ACCOUNTING CHARGES (1,20,000/-). AS REGARDS CARRIAGE INWARD, THE APPELLANT SUBMITTED THAT IT REPRESENTED PAYMENT TO DRIVERS FOR TRANSPORTATION. IN THE ADDITIONAL EVIDENCE THE APPELLANT GAVE VEHICLE NUMBER AND PAYMENT DETAILS OF THESE EXPENSES ON A PERUSAL OF WHICH IT WAS REVEALED THAT NO ONE WAS PAID IN EXCESS OF RS: 20,000/- WHICH COULD HAVE RESULTED IN ATTRACTION OF PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT. THE A.O IN HIS REMAND REPORT HAS HARPED ON THE POINT THAT THERE IS EVERY POSSIBILITY THAT THIS EVIDENCE MAY HAVE BEEN CREATED SUBSEQUENTLY. BUT IN VIEW OF LACK OF ANY BASIS BEHIND A.O'S STATEMENT, AND EXHAUSTIVE DETAILS SUBMITTED BY THE APPELLANT I HOLD THAT NO ADDITION IN RESPECT OF CARRIAGE INWARD SHOULD 16 HAVE BEEN MADE BY INVOKING U/S 40(A)(IA) OF THE INCOME TAX ACT. ACCORDINGLY THE APPELLANT GETS A RELIEF OF RS. 5,63,150/-. AS REGARDS LEGAL AND PROFESSIONAL CHARGES, THE APPELLANT HAS GIVEN FULL DETAILS, GIVING THE NAMES OF PERSONS TO WHOM THESE PAYMENTS WERE MADE. THE APPELLANT ALSO GAVE A COPY OF VOUCHERS SUBSTANTIATING THE PAYMENT MADE TO THESE PERSONS. THE A.O IN HIS REMAND REPORT SIMPLY SUBMITTED THAT SINCE ADDRESS AND PAN WERE NOT GIVEN BY THE APPELLANT, HE COULD NOT CONDUCT NECESSARY VERIFICATION. ON A PERUSAL OF THESE DETAILS IT IS REVEALED THAT SINCE THE AMOUNT PAID TO THESE PERSONS WAS NOT SUBSTANTIAL, THE EVIDENCE GIVEN BY THE APPELLANT WAS SUFFICIENT ENOUGH AND THERE WAS NO NEED FOR FURTHER VERIFICATION. ACCORDINGLY THE APPELLANT GETS A RELIEF OF 1,23,664/--ON ACCOUNT OF LEGAL AND PROFESSIONAL CHARGES. AS REGARDS ACCOUNTING CHARGES THE APPELLANT GAVE DETAILS AS PER WHICH THE TOTAL AMOUNT OF RS. 1,20,000/- WAS GIVEN TO FOUR PERSONS ON ACCOUNT OF 17 SALARY IN THE ACCOUNTS DEPARTMENT. THESE PEOPLE INCLUDE SOURAV (RS. 55,000/-), JYOTI KHURANA (RS. 5,000/-), AMIT KHURANA (RS. 25,000/-) AND VIPIN (35,000/-). SINCE THE AMOUNT WAS LESS THAN THE MAXIMUM AMOUNT WHICH IS NOT LIABLE TO TDS, THE APPELLANT RIGHTLY DID NOT DEDUCT ANY TDS IN RESPECT OF PAYMENT TO THESE FOUR PERSONS. ACCORDINGLY I HOLD THAT THE A.O WRONGLY MADE THE ADDITION OF RS. 1,20,000/- U/S 40(A)(IA) OF THE INCOME TAX ACT ON ACCOUNT OF ACCOUNTING CHARGES. THE APPELLANT GETS THE CONSEQUENTIAL RELIEF. E) I AND J FREIGHT & BUSINESS PROMOTION EXPENSES- THESE INCLUDE PAYMENT ON ACCOUNT OF FREIGHT, CARTAGE AND TRANSPORT (RS. 6,58,412/-) AND BUSINESS PROMOTION EXPENSES (RS. 85,641/-). AS REGARDS FREIGHT CHARGES AND TRANSPORT, THE APPELLANT GAVE DETAILS AS PER WHICH THIS PAYMENT WAS MADE TO TEMPO/TRUCK OPERATORS AND THE AMOUNT PAID WAS LESS THAN THAT SUBJECT TO TDS PROVISIONS. THE A.O'S OBSERVATIONS THAT THIS EVIDENCE MAY HAVE BEEN CREATED AND MODIFIED SUBSEQUENTLY DOES NOT HAVE ANY BASIS TO BANK UPON. FURTHERMORE, DETAILS OF 18 FREIGHT, CARTAGE AND TRANSPORTATION REVEALS THAT NO ONE WAS PAID IN EXCESS OF RS. 20,000/- IN ONE INSTALMENT AND RS. 50,000/- IN THE AGGREGATE. CONSIDERING THESE FACTS, THE DISALLOWANCE TO RS. 6,58,412/- ON ACCOUNT OF FREIGHT CARTAGE AND TRANSPORT EXPENSES IS HEREBY , ALLOWED. 8.6 HENCE, AFTER A CAREFUL CONSIDERATION OF THE FACTS OF THE CASE TOGETHER WITH THE SUBMISSIONS OF THE APPELLANT, THE REMAND REPORT OF THE A.O AND THE REJOINDER TO THE REMAND REPORT I HOLD THAT THE A.A ERRED IN MAKING THE ADDITION OF RS. 1,43,06,704/- BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT. SINCE THE DETAILS GIVEN BY THE APPELLANT IN THE VOLUMINOUS PAPER BOOK ALONG WITH OTHER EVIDENCE MAKE IT CRYSTAL CLEAR THAT IN MOST OF THE CASES, TDS PROVISIONS WERE NOT APPLICABLE, THE A.O BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT ERRED IN MAKING ADDITION TO THE EXTENT OF RS 1,43,06,704/-. ACCORDINGLY, GROUND NO.2 OF THE APPEAL IS PARTLY ALLOWED. 6.6 ON GOING THROUGH THE AFORESAID FINDING OF THE LD . CIT(A) ON THE ISSUES IN DISPUTE, WE ARE OF THE VIEW THAT CIT(A) HA S RIGHTLY DELETED THE ADDITION IN DISPUTE, BECAUSE THE DETAILS GIVEN BY THE ASSESSEE IN THE VOLUMINOUS PAPER BOOK ALONG WITH OTH ER EVIDENCE MAKE IT CRYSTAL CLEAR THAT IN MOST OF THE CASES, TDS PR OVISIONS WERE NOT APPLICABLE. THEREFORE, WE DO NOT FIND ANY INFIR MITY IN THE WELL 19 REASONED ORDER PASSED BY THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND HENCE, WE UPHOLD THE FINDING OF THE LD. CIT(A) ON TH IS ISSUE AND ACCORDINGLY, REJECT THE GROUNDS RAISED BY THE REVENUE . 7 IN THE RESULT, THE APPEAL FILED BY THE REVENUE ST ANDS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 19/01/2018. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 19/01/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHE S