ACIT, Meerut V. Shri Tej Ram Singh, Meerut

ITA 242/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3637 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 23-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 17-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRUJANI MOHANTY
• Assessee Lawyers: GAJENDER SINGH
• Keywords: Corroborative evidences; Assessment record
• Section: 68

Judgement Text

ITA NO. 242/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 242/DEL/2011 A.Y. : 2007-08 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-2, MEERUT VS. SHRI TEJ RAM SINGH, 4-B, TIRUPATI GARDEN, ROORKEE ROAD, MEERUT (PAN : ANRPS9158D) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. GAJENDER SINGH, A.R. DEPARTMENT BY : MS. SRUJANI MOHANTY, D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 28.10. 2010 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE FIRST ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION MADE U/S 68 OF THE IT ACT. 3. IN THIS CASE THE ASSESSING OFFICER HAD ADDED T OTAL AMOUNT OF TRADE CREDITORS DUE AT ` 73,16,973/- AS AT THE END OF THE PREVIOUS YEAR I.E. ON 31.3.2007. THE MAIN FINDING OF THE ASSESS ING OFFICER IS THAT IN SPITE OF GIVING OPPORTUNITIES, THE DETAILED LIST OF CREDITORS AS WELL AS ITA NO. 242/DEL/2011 2 IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDIT WO RTHINESS OF THE SUNDRY CREDITORS WERE NOT PROVIDED. THE ASSESSING OFFICER HAS HELD THAT THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION A BOUT THE NATURE AND SOURCE OF THE CREDITORS AND, THEREFORE, HE HAS FAILED TO DISCHARGE HIS ONUS U/S 68 OF THE IT ACT, 1961. THEREFORE, TH E TOTAL AMOUNT DUE TO THE SUNDRY CREDITORS HAS BEEN TREATED BY HER AS TH E INCOME OF THE ASSESSEE U/S 68. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) NOTED THE SUBMISSION AND HELD AS UNDER:- HAVING NOTED THE AFORESAID FACTS, I WAS OF OPIN ION THAT THE ADDITION OF TOTAL AMOUNT DUE TO ALL CREDITORS WAS ON LY MADE BY THE ASSESSING OFFICER BECAUSE THE DETAILS OF CRE DITORS, THEIR CONFIRMATIONS AND OTHER DESIRED INFORMATION WERE N OT FILED BY THE APPELLANT. AFTER CONSIDERING THE REMAND REPOR T, IN WHICH THERE WAS NO REFERENCE TO THE CONFIRMED COPIES OF AC COUNTS OF THE CREDITORS, I INVOKING MY POWERS AND DUTIES, WHICH AR E CO TERMINUS WITH THOSE OF THE ASSESSING OFFICER, ENTERED INTO T HE SHOES OF THE ASSESSING OFFICER AND DIRECTED THE APPELLANT TO PR ODUCE BOOKS OF ACCOUNTS ALONG WITH SUPPORTING EVIDENCES AND VOUCHE RS. THE BOOKS OF ACCOUNTS WERE PRODUCED AND TEST CHECKED. I, AFTER VERIFYING THE BOOKS OF ACCOUNT, BILLS, VOUCHERS AND MUSTER ROLLS, ITA NO. 242/DEL/2011 3 AM OF THE OPINION THAT THE CREDITORS SHOWN BY THE A PPELLANT HAVE ARISEN IN THE DUE COURSE OF BUSINESS AGAINST SUPPLI ES OF MATERIAL EXPENSES CREDITED TO THEM AND LABOUR EXPENSES PAYABL E. THE ASSESSING OFFICER HAS ALSO NOT DOUBTED THE GENUINE NESS OF EXPENSES EXCEPT MAKING AN ADHOC DISALLOWANCE OF ` 1 ,00,000/- AND, THEREFORE, THE ADDITION OF ` 73,16,973/- U/S 6 8 IS UNWARRANTED AND IS DELETED. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT A SSESSEE HAS SUBMITTED DULY THE DETAILS OF CREDITORS, CONFIRMATI ONS AND OTHER RELEVANT INFORMATION. LD. COMMISSIONER OF INCOME T AX (APPEALS) HAS GIVEN A FINDING THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS HIMSELF DONE THE VERIFICATION AND WAS OF THE OPINIO N THAT NO ADDITION IN THIS REGARD IS REQUIRED. IT IS ALSO NOTED TH AT THE CREDITORS WERE ON ACCOUNT OF SUPPLIES OF MATERIALS AND LABOUR EXPENSE S PAYABLE. THERE IS NO FINDING THAT ANY EXPENSE IN THIS REGARD IS BO GUS. IN OUR CONSIDERED OPINION, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DOES NOT NEED ANY INTERFERENCE ON OUR PA RT. HENCE, WE UPHOLD THE SAME. 7. THE NEXT ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF ` 59,49 ,586/- MADE BY THE ASSESSING OFFICER U/S. 40(A)(IA). ITA NO. 242/DEL/2011 4 8. ON THIS ISSUE THE ASSESSING OFFICER HAS MADE TH E DISALLOWANCE HOLDING THAT THE PAYMENT OF LABOUR WAS MADE TO LABOUR CONTRACTORS WITHOUT TDS DEDUCTION. THE ASSESSING OFFICER HAS REACHED A FINDING THAT NO MUSTER ROLLS WERE MAINTAINED BY THE APPELLA NT AND THE SAID FACT WAS BROUGHT TO THE ATTENTION OF THE APPELLANT DURI NG THE EXAMINATION OF BOOKS OF ACCOUNT. AS PER THE ASSESSING OFFICER THERE BEING NO SUBMISSION AGAINST THE SAME FROM THE APPELLANT, THE PROVISIONS OF SECTION 194C(2) WERE CONTRAVENED. THE ASSESSING O FFICER HOLDING THAT AS NO TDS WAS DEDUCTED FROM THE PAYMENTS TO THE CONTRACTORS, DISALLOWED THE TOTAL AMOUNT OF LABOUR EXPENSES TO T HE TUNE OF ` 59,49,687/- U/S 40(A)(IA). 9. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) NOTED THE SUBMISSIONS AND HELD AS UNDER:- I HAVE GONE THROUGH THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE A.R. FROM THE MATERIAL SUBMITTED I HAVE NOTED TH AT THE PAYMENT TO THE LABOUR HAS BEEN MADE THROUGH MUSTER ROLLS BY DIRECTLY EMPLOYING LABOUR. I HAVE ALSO VER IFIED THE SAME FROM THE BOOKS OF ACCOUNT AND MUSTER ROLLS PRODUCED BEFORE ME DURING APPELLANT PROCEEDINGS. NAMES OF THE GANG MAN ARE WRITTEN ON THE TOP OF MUSTER ROLLS. THE COPIES OF M USTER ROLLS AS WERE SENT TO THE ASSESSING OFFICER FOR SUBMISSION O F REMAND ITA NO. 242/DEL/2011 5 REPORT HAVE NOT BEEN COMMENTED UPON AND HAVE NOT BEE N EVEN REFERRED TO BY THE ASSESSING OFFICER IN THE REMA ND REPORT. IN ORDER TO VERIFY THE SUBMISSIONS OF THE A.R. AGAINST ASSESSING OFFICERS STATEMENT, I HAVE GONE THROUGH THE ASSESSM ENT RECORD AND FOUND THAT THERE IS NOTHING ON RECORD TO SUPPOR T THE STATEMENT OF THE ASSESSING OFFICER THAT THE FACT O F NON- MAINTENANCE OF MUSTER ROLLS WAS CONFRONTED TO THE APP ELLANT. FROM THE ORDER SHEET ENTRY DATED 18.12.2009, ON WHIC H DATE BOOKS OF ACCOUNT ALONG WITH BILLS AND VOUCHERS WERE PRODUCED BY THE APPELLANT AND HIS ACCOUNTANT, NO SUCH NOTING IS FOUND RECORDED ON THE ORDER SHEET. ALSO THERE IS NO MATER IAL IN ASSESSMENT RECORD IN ORDER TO UPHOLD THE FINDING TH AT THE PAYMENT TO LABOUR WAS MADE THROUGH CONTRACTORS. IN VIEW OF THIS I AM UNABLE TO SUBSCRIBE TO THE FINDING OF THE ASSE SSING OFFICER THAT THE PAYMENT OF LABOUR WAS MADE THROUGH CONTRAC TORS. IN VIEW OF MATERIAL ON RECORD, THE PAYMENT OF LABOUR WAS MADE THROUGH MUSTER ROLLS DIRECTLY EMPLOYING THE LABOUR A ND NOT THROUGH CONTRACTORS. ON THE FACTS THERE WAS NO CO NTRAVENTION OF SECTION 194C(2) AND THEREFORE THE DISALLOWANCE U/S 40(A)(IA) BEING UNLAWFUL IS DELETED. 10. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BE FORE US. ITA NO. 242/DEL/2011 6 11. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT L D. COMMISSIONER OF INCOME TAX (APPEALS) HAS GIVEN A FINDING THAT CO PIES OF MUSTER ROLLS WERE PROVIDED. HE HAS FOUND THAT LABOUR PAYMENTS WERE DIRECTLY MADE. HE HAS GIVEN A FINDING THAT THERE IS NO MATERI AL TO PROVE THAT PAYMENT WAS MADE THROUGH CONTRACTORS. IN VIEW OF T HE CATEGORICAL FINDING OF THE LD. COMMISSIONER OF INCOME TAX (APPEA LS), WE FIND THAT THE ADDITION IN THIS REGARD IS NOT JUSTIFIED. HEN CE, WE DO NOT FIND ANY INFIRMITY OR ILLEGALITY IN THE ORDER OF THE LD. COMMI SSIONER OF INCOME TAX (APPEALS), ACCORDINGLY, WE UPHOLD THE SAME. 12. THE LAST ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF ` 50,00 0/- ON ESTIMATE BASIS. 13. ON THIS ISSUE ASSESSING OFFICER NOTED THAT ASS ESSEE HAS DEBITED ` 1,85,42,351/- UNDER THE HEAD MATERIAL EXPENSE AND SOME VOUCHERS WERE NOT AVAILABLE. HENCE, HE MADE DISALLOWANCE O F ` 1 CRORE ON ESTIMATE BASIS. 14. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION OF 50 LAKHS AND SU STAINED THE ADDITION OF ` 50 LAKHS. 15. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEF ORE US. ITA NO. 242/DEL/2011 7 16. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT T HE ADDITION IN THIS REGARD HAS BEEN MADE BY THE ASSESSING OFFICER ON AD HOC BASIS. IT IS NOT THE CASE THAT ANY EXPENSE HAS BEEN FOUND TO BE BOGUS. HENCE, WE FIND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS PASSED A REASONABLE ORDER, WHICH DOES NOT NEED ANY INTERFERE NCE ON OUR PART. ACCORDINGLY, WE UPHOLD THE SAME. 17. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/6/2011 UPO N CONCLUSION OF HEARING. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [A.D. JAIN] [A.D. JAIN] [A.D. JAIN] [A.D. JAIN] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 23/6/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES