ITO 25(3)(1), MUMBAI V. MANIKLAL RAMCHARITRA PANDEY, MUMBAI

ITA 2567/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1740 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 16-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: READ AS UNDER ON FACTS; IN C
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B , MUMBAI BEFORE SHRI JOGINDER SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 2567 /MUM/201 4 ASSESSMENT YEAR: 20 08 - 09 INCOME TAX OFFICER, 25(3),MUMBAI ROOM NO. 307, 3 RD FLOOR, BLDG. C - 11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051, VS. SHRI MANIKLAL RAMCHARITRA PANDEY B - 1304, GOKUL GAGAN, THAKUR, COMPLEX, KANDIVALI (EAST), MUMBAI 400 101 PAN NO. A GHPP 7059 H APPELLANT .. RESPONDENT DATE OF HEARING : 15 / 11 /2016 DATE OF PRONOUNCEMENT: 17 /11/2016 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE REVENUE . THE RELEVANT ASSESSMENT YEAR IS 2008 - 09 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 35 , MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.49,02,244/ - MADE ON ACCOUNT OF SUNDRY CREDITORS BY AO THOUGH THE ASSESSEE COULD NOT FURNISH ALL THE CONFIRMATION APPELLANT BY SHRI PURSHOTTAM KUMAR, DR RESPONDENT BY SHRI M. SUBRAMANIAM, AR ITA NO: 2567 /MUM - 201 4 2 WITH COMPLETE ADDRESSES AND PANS OF THE PARTY TO PROVE THE GENUINENESS OF THE CREDITORS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON THE GROUND OF WAGES AND LABOUR OF RS.10,88,103/ - THOUGH THE ASSESSEE HAS NOT SUBSTANTIATED THE EXPENSES CLAIMED WITH REQUIRED EVIDENCE. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 3. BRIEFLY STATED , THE FACTS ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY 2008 - 09 ON 30.09.2008 DECLARING THE TOTAL INCOME OF RS.6,42,690/ - . AS THE ASSESSEE FAILED TO FILE THE CONFIRMATIONS OF THE SUNDRY CREDITORS, THE ASSESSING OFFICER (AO) MADE AN ADDITION OF RS.49,02,244/ - ALSO THE AO DISALLOWED 10% OF THE TOTAL SALARY/WAGES (LABOUR CHARGES) AS THE ASSESSEE FAILE D TO FILE THE BILLS AND DETAILS AND IT COMES TO RS.10,68,103/ - 4 . THE ASSESSEE FILED APPEAL AGAINST THE ORDER OF THE AO BEFORE THE LD. CIT(A). THE ASSESSEE ALSO FILED BEFORE THE LD. CIT(A) THE REQUIRED CONFIRMATIONS, COPY OF ACCOUNT AND DETAILS. THE L D. CIT(A) SENT THE SAID DETAILS TO THE AO WITH A DIRECTION TO MAKE ENQ UIRY AND SEND A REMAND REPORT. THE REMAND REPORT SUBMITTED BY THE AO HAS BEEN REPRODUCED BY THE LD. CIT(A) AT PAGE 3 - 5 OF THE ORDER. THE LD. CIT(A) FOUND THAT IN RESPECT OF SUNDRY CREDITORS OF RS .49,02,244/ , THE ASSESSEE HA D FILED DETAILS OF CREDITORS ACC OUNT FROM 1.04.2006 TO THE SUBSEQUENT YEARS WHEN THE PAYMENTS WER E SHOWN TO HAVE BEEN MADE AND THE ASSESSEE ALSO SUBMITTED WHEREVER POSSIBLE THE PAN AND CONFIRMATION S WITH COMPLETE ADDRESS. THERE WA S NO DISCREPANC Y FOUND IN THE PAYMENTS MADE SUBSEQUENTLY AND SINCE THE ASSESSEE HAD FILED CONFIRMATIONS OF 14 DIFFERENT PARTIES AND THE AO AFTER COMPARING THE LEDGER ACCOUNT HA D FOUND NO DISCREPANC Y , THE L D. CIT(A) TOOK NOTE OF THE ABOVE FACTS AND DELETED THE ADDITION OF RS.49,02,244/ - MADE BY THE AO. ITA NO: 2567 /MUM - 201 4 3 4.1 IN RES PECT OF DISALLOWANCE OF WAGES AND THE LABOUR TO THE EXTENT OF RS.10,68,103/ - , THE L D. CIT(A) FOUND THAT THE ASSESSEE HA D SUBMITTED VARIOUS REGISTER S ALONG WITH THE NAMES OF THE LABOURER S AND THE EVIDENCE OF THEM RECEIVING THE SAID PAYMENTS AND THE BOOKS OF THE ASSESSEE ARE AUDITED . T HERE FORE, SHE DELETED THE ADDITION OF RS. 10,68,103/ - . 5 . THE L D. DR SUPPORT S THE ADDITION OF RS.49,02,244/ - MADE BY THE AO IN RESPECT OF SUNDRY CREDITORS. HE ALSO SUPPORT S THE DISALLOWANCE OF RS.10,68,103/ - MADE BY THE AO TOWARDS SALARY/WAGES (LABOUR CHARGES). 6 . THE L D. COUNSEL OF THE ASSESSEE SUPPORT S THE ORDER DATED 31.01.2014 PASSED BY THE L D. CIT(A). 7 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RELEVAN T MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE IS IN THE BUSINESS OF LABOUR CONTRACT, PROJECT CONTRACT AND SUPPLY OF MANPOWER . BEING A LABOUR INTENSIVE INDUSTRY, MAJOR COMPONENT S OF EXPENDITURE ARE WAGES, LABOUR CHARGES PAID TO UNSKILLED LABOUR . THE BREAKUP OF SUNDRY CREDITORS AMOUNTING TO RS.49,02,244/ - IS AS UNDER: - A) MOBILISATION ADVANCE (MGL) RS.4,45,142.00 B) SUNDRY RS.44,57,102.17 ______________ RS.49,02,244.17 ______________ OF THE ABOVE, AMOUNT OF RS.34,21,016/ - PERTAINS TO EARLIER ASSESSMENT YEARS. A PERUSAL OF THE SUND RY CREDITORS FOR THE AY 2007 - 08 AND 2008 - 09 INDICATE THAT MOST OF THE CREDITORS PERTAIN TO THE ASSESSMENT YEARS PRIOR TO 2008 - 09. THEREFORE, THERE IS MERIT IN THE FINDING OF THE L D. CIT(A) THAT THE ASSESSEE HAD SUBMITTED DURING THE REMAND PROCEEDINGS, ITA NO: 2567 /MUM - 201 4 4 WHEREVER POSSIBLE THE PAN AND ALSO CONFIRMATIONS WITH COMPLETE ADDRESSES. IN THE REMAND PROCEEDINGS NO DISCREPANCIES HAVE BEEN FOUND BY THE AO AFTER EXAMINATION OF CONFIRMATION OF 14 DIFFERENT PARTIES AND COMPARISON OF THE LEDGER ACCOUNT. IN VIEW OF THE FOREGOING FACTS, WE UPHOLD THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.49,02,244/ - MADE BY THE AO TOWARDS SUNDRY CREDITORS. 7.1 WE FIND THAT THE AO HAS MADE THE ADHOC DI SALLOWANCE @ 10% ON PAYMENT TOWARDS SALARY/WAGES (LABOUR CHARGES). THE ACCOUNTS OF THE ASSESSEE ARE AUDITED U/S 44AB OF THE ACT. THE AO HAS NOT FOUND ANY SPECIFIC DISCREPANC Y IN THE AUDITED ACCOUNT S OF THE ASSESSEE. WE AGREE WITH THE FINDING OF THE L D. CIT (A) THAT THE ASSESSEE HA D SUBMITTED DURING THE REMAND PROCEEDINGS BEFORE THE AO VARIOUS REGISTER S ALONG WITH THE NAMES OF THE LABOURERS AND THE EVIDENCE OF THEM RECEIVING SAID PAYMENTS. IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER OF THE LD. CIT(A) IN DELETIN G THE ADDITION OF RS.10,68,103/ - . 8 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 17 /11/2016 SD/ - SD/ - ( JOGINDER SINGH ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : DATED: 17 /11/2016 AKS/ ON TOUR (DOC) ITA NO: 2567 /MUM - 201 4 5 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI