Shri P.Ramaraju, Surat V. The Dy.CIT.,Circle-2, Surat

ITA 2413/AHD/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5937 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-04-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 28-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA SRDR
• Assessee Lawyers: RAJESH UPADHYA A R
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD , , , , BEFORE SHRI KUL BHARAT , JUDICIAL MEMBER AND , SHRI T.R. MEENA, ACCOUNTANT MEMBER .. , !' ! # $ ! # $ ! # $ ! # $ ITA NO. 2413/AHD/2010 ASSESSMENT YEAR :2007-08 SHRI P. RAMARAJU [PROP. WESTERN TRADERS] C/O WESTERN TRADERS 343, ARIHANT COMPLEX, UDHNA MAIN ROAD, SURAT. V/S . DY. CIT, CIRCLE 2, AYAKAR BHAVAN, MAJURA GATE, SURAT. PAN NO. A DNPR2050B (APPELLANT) .. (RESPONDENT) % & ' ! / BY REVENUE SHRI RAJ MEHRA, SR. D.R. ! & ' ! /BY ASSESSEE SHRI RAJESH UPADHYA, A.R. () & ' /DATE OF HEARING 22.04.2014 *+, & ' /DATE OF PRONOUNCEMENT 29.04.2014 O R D E R PER : SHRI T. R. MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF ASSESSEE WHICH H AS EMANATED FROM THE ORDER OF CIT(A)-II, SURAT, DATED 21.06.2010 FOR ASSESSMENT YEAR 2007-08. THE SOLE GROUND OF APPEAL IS AGAINST CONFIRMING THE ADDITION OF RS. 1 LAC ON ACCOUNT OF AD-HOC DISALLOWANCE UNDER THE HEAD LABO UR EXPENSES WITHOUT REJECTING BOOKS OF ACCOUNT AND IGNORING THE FACT. 2. THE A.O. FOUND THAT ASSESSEE HAD DEBITED LABOUR EXPENSES OF RS.10,31,365/-. THE A.O. ASKED TO FURNISH THE COPY OF LEDGER ACCOUNT ALONG ITA NO. 2413/AHD/10, P. RAMARAJU VS. DCIT FOR A.Y. 07-08 PAGE 2 WITH SUPPORTING EVIDENCE TO JUSTIFY THE CLAIM OF TH E EXPENSES AT THE TIME OF ASSESSMENT PROCEEDING. HE OBSERVED THAT ON VERIFIC ATION OF THE DETAILS FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN G, IT WAS NOTICED THAT MOST OF THE PAYMENTS WERE MADE IN CASH AND PROPER B ILLS/VOUCHERS WERE NOT AVAILABLE WITH THE ASSESSEE. IN ABSENCE OF PROPER SUPPORTING EVIDENCES, THE AUTHENTICITY OF THE CLAIM OF THE EXPENSES COULD NOT BE VERIFIED PROPERLY. CONSEQUENTLY, HE MADE A LUMP SUM DISALLOWANCE OF RS .1 LAC OUT OF THE TOTAL LABOUR EXPENSES. THE ASSESSEE CARRIED THE MATTER B EFORE THE CIT(A) WHO HAD CONFIRMED THE ADDITION BY OBSERVING THAT A.O. HAD M ADE DISALLOWANCE ON ACCOUNT OF ASSESSEES UNSUPPORTED CLAIM BUT THE A. R. HAD BEEN UNABLE TO PROVE THE AUTHENTICITY OF SUCH CLAIM. IF THE EXPEN DITURE WAS GENUINE, SUCH DETAILS WOULD HAVE BEEN MAINTAINED AND SHOULD HAVE BEEN PRODUCED BEFORE THE A.O. ALL THE PAYMENTS WERE MADE IN CASH. THUS , A.O. JUSTIFIED TO DISALLOW RS. 1 LAC. 3. BEFORE US, THE LD. A.R. ARGUED THAT ASSESSEES L ABOUR EXPENSES HAVE HEAVILY GONE DOWN IN COMPARISON TO PREVIOUS YEAR AN D NO SPECIFIC DEFECT IN BILL/VOUCHER WERE POINTED OUT BY THE A.O. AT THE TI ME OF ASSESSMENT PROCEEDING. HE HAD ALSO NOT REJECTED THE BOOK RESU LT U/S. 145(3) OF THE IT ACT. FOR HIS SUPPORT, HE RELIED IN CASE OF ASSTT. CIT V. GANPATI ENTERPRISES LTD. (2013) 142 ITD 0118 (DEL-TRIB), WHEREIN SIMILAR ADDITIONS WERE DELETED BY THE HONBLE ITAT. THUS, HE REQUESTED TO DELETE THE ADD ITION. AT THE OUTSET, LD. SR. D.R. SUPPORTED THE ORDER OF THE CIT(A). AFTER CONS IDERING BOTH THE SIDES AND FACTS OF THE CASE, IT IS FOUND THAT THE A.O. HAD NO T POINTED OUT ANY PARTICULAR BILL, WHICH HAS BEEN PAID CASH. FURTHER LABOUR EXP ENSES WERE NOT HELD NON- ITA NO. 2413/AHD/10, P. RAMARAJU VS. DCIT FOR A.Y. 07-08 PAGE 3 GENUINE BY THE A.O. HE SIMPLY MADE ADDITION ON EST IMATION BASIS, WHICH HAS BEEN CONFIRMED BY THE CIT(A). THE CO-ORDINATE ITAT BENCH IN CASE OF ASSTT. CIT V. GANPATI ENTERPRISES LTD.(SUPRA) HAS HELD AS UNDER: SCHEME OF ACT DOES NOT AUTHORIZE THE AO TO MAKE A DISALLOWANCE ACCORDING TO HIS WISHES, RATHER IT PROVIDES THAT HE SHOULD FIRST POINT OUT THE DEFECTS IN THE ACCOUNTS OF ASSESSEE. AO NOWHERE IN DICATED WHAT WAS THE TOTAL AMOUNT OF EXPENDITURE CLAIMED BY ASSESSEE, WH ICH SPECIFIC VOUCHER WAS NOT IN ACCORDANCE WITH LAW. IN A JUST SWEEPING STATEMENT, AO OBSERVED THAT ON VERIFICATION, SOME OF THE EXPENSES WERE FOUND TO BE UNVERIFIABLE, BUT WHAT WERE THOSE EXPENSES, HE SHOU LD MAKE OUT IN THE ASSESSMENT ORDER, ONLY THEN HE COULD DISALLOW THEM. THUS, WE HAVE CONSIDERED VIEW THAT LD. CIT(A) WAS N OT RIGHT IN CONFIRMING THE ADDITION MADE BY THE A.O. ACCORDINGLY, ASSESSEES APPEAL IS ALLOWED. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 29.04.2014 SD/- SD/- ( KUL BHARAT ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA !- !- !- !- & && & ./ ./ ./ ./ 0!/, 0!/, 0!/, 0!/, / COPY OF ORDER FORWARDED TO:- 1. % / REVENUE 2. ! / ASSESSEE 3. 4 / CONCERNED CIT 4. 4- / CIT (A) 5. /8 .( , , / DR, ITAT, AHMEDABAD 6. 8:; <= / GUARD FILE. BY ORDER/ !- !, >/ % , $