SPACE KRAFT INTERIORS, MUMBAI V. ITO 22(2)(4), NAVI MUMBAI

ITA 27/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0429 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 03-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 02-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay
• Section: 143(3); 133(6); 194C

Judgement Text

ITA NO.27/M/2013 AY 2006- 07 SPACE KRAFT INTERIOR 1 INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MU MBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBERAND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO 27/MUM/2013 FOR ASSESSMENT YEAR 2006-07 IN THE MATTER OF M/S SPACE KRAFT INTERIORS GULISTAN APARTMENT ( GR FLOOR) NEAR GOVANDI BRIDGE, CHEMBUR, MUMBAI-400088 (PAN: ABEFS3690K) ----------- APPELLANT VERSU S INCOME TAX OFFICER- 22(2)(4) INCOME TAX OFFICES, VASHI COMMERCIAL COMPLEX, VASHI RAILWAY STATION BUILDING, VASHI, NAVI MUMBAI-400088 ---------- RESPONDENT APPELLANT THROUG H : MS. DINKLE HARIYA -AR RESPONDENT THROU GH : DR. A.K. NAYAK - DR APPEAL HEARD ON : 19 JUNE 2017 DATE OF ORDE R : 19 JUNE 2 017 ORDER UNDER SECTION 254(1) OF INCOME-TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER ; 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF INCOME -TAX ACT(CT) IS DIRECTED AGAINST THE ORDER OF COMMISSIONER (APPEALS )-19, MUMBAI DATED 31 ST OCTOBER 2012 FOR ASSESSMENT YEAR 2006-07. THOUGH, THE ASSESSEE HAS RAISED AS MANY AS FOUR GROUNDS OF APPEAL, HOWEVER, AS PER OUR CONSIDERED VIEW THE ONLY SUBSTANTIAL GROUND OF APPEAL IS WH ETHER THE LEARNED COMMISSIONER (APPEALS) ERRED IN SUSTAINING THE ACTI ON OF ASSESSING OFFICER ITA NO.27/M/2013 AY 2006- 07 SPACE KRAFT INTERIOR 2 FOR DISALLOWANCE OF AMOUNT OF RS. 8,23,000/-UNDER SECTION 40 (A)(IA) OF THE INCOME-TAX ACT. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGE D IN THE BUSINESS OF CIVIL CONTRACT, FILED RETURN OF INCOME FOR RELEVANT ASSES SMENT YEAR ON 27 TH OCTOBER 2006 DECLARING TOTAL INCOME AT RS. 1,76,670 /-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 26 TH DECEMBER 2008. THE ASSESSING OFFICER WHILE FRAMING ASSESSMENT ORDER MADE THE DIS ALLOWANCE OF RS.8,23,000/- UNDER SECTION 40(A)(IA) HOLDING THAT THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE WHILE MAKING THE PAYMENT ON ACCOUNT OF LABOUR CHARGES. ON APPEAL BEFORE COMMISSIONER (APPEALS) TH E ACTION OF ASSESSING OFFICER WAS SUSTAINED. FURTHER, AGGRIEVED BY THE OR DER OF COMMISSIONER (APPEALS) THE PRESENT APPEAL IS FILED BEFORE US. 3. WE HAVE HEARD THE LEARNED AR OF THE ASSESSEE AND TH E LEARNED DR FOR REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. ON PERUSAL OF RECORD WE FIND, THAT THERE IS ONE-DAY DELAY IN FILING THE APPEAL BEFORE TRIBUNAL. IN SUPPORT OF CONDONATION OF DELAY AN AFFIDAVIT OF SH. PAVAN KUMAR PRABHAKAR IS FILED ON RECORD. IN THE AFFIDAVIT, THE DEPONENT STATED THAT THE TIME LIMIT TO FILE THE APPEAL BEFORE THE TRIBUNAL W AS 01.0.2013. THE ADVOCATE OF ASSESSEE WAS OUT OF STATION FROM 30 DEC EMBER 2012 TO 1 ST JANUARY 2013, AND HIS OFFICE WAS CLOSED, THUS THE A PPEAL COULD BE FILED ONLY ON 02.01.2013. THE LEARNED AR FOR ASSESSEE PRA YED FOR CONDONING ITA NO.27/M/2013 AY 2006- 07 SPACE KRAFT INTERIOR 3 ONE DAY DELAY IN FILING THE PRESENT APPEAL. THE L EARNED DR FOR THE REVENUE NOT OPPOSED THE PRAYER OF APPLICATION FOR CONDONATI ON OF DELAY. CONSIDERING THE CONTENTION OF BOTH THE PARTIES THE DELAY OF ONE DAY IN FILING THE PRESENT APPEAL IS CONDONED IN THE INTEREST OF J USTICE. ON THE MERIT OF THE APPEAL THE LEARNED AR OF THE ASSESSEE ARGUED THAT T HE ASSESSEE PAID THE LABOUR CHARGES TO THE WORKING PERSON DIRECTLY AND S OMETIME THE PAYMENTS WERE MADE THROUGH THE TEAM LEADERS WHO WERE SUPERVI SING AND CONTROLLING THE CASUAL LABOUR AND BROUGHT THE LABOUR FOR DEPLOY MENT ON SITE. THERE WAS NO WRITTEN CONTRACT BETWEEN THE ASSESSEE AND THE CA SUAL LABOURERS. THE ASSESSEE FILED THE CONFIRMATIONS OF THOSE TEAM LEAD ERS/ SUPERVISORS BEFORE THE LOWER AUTHORITIES WHICH ARE ALSO PLACED ON RECO RD IN THE PAPER BOOK. THE ASSESSEE MADE THE PAYMENT ON THE BASIS OF ACTUA L WORK CARRIED OUT BY CASUAL LABOURERS. IN SUPPORT OF HER SUBMISSION THE LEARNED AR RELIED UPON THE DECISION OF JAIPUR AND PUNE BENCH OF TRIBUNAL I N ITA VERSUS TULSI RAM MODI [2015] 53 TAXMAN.COM 167(JAIPUR-TRIB) AND DCIT VERSUS MONISHA CONSTRUCTION COMPANY [2015] 53 TAXMAN.COM 3 15 (PUNE-TRIB). ON THE OTHER HAND THE LEARNED DR FOR THE REVENUE SU PPORTED THE ORDER OF AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDING OBSERVED THAT THE ASSESSEE UNDERTAKES MA JOR JOB WORK OF M/S ITA NO.27/M/2013 AY 2006- 07 SPACE KRAFT INTERIOR 4 JWC LOGISTICS PARK PRIVATE LIMITED. THE ASSESSEE IN CURRED EXPENSES ON ACCOUNT OF LABOUR CHARGES. THE ASSESSEE WAS ASKED T O PROVIDE THE NAME AND ADDRESS OF THE PARTIES TO WHOM THE LABOUR CHARG ES OF MORE THAN RS.1.00/- LAKH WAS PAID. THE ASSESSEE FURNISHED HIS REPLY AND CONTENDED THAT RS. 1,70,000/- WAS PAID TO BENGAL FURNITURE AN D WORK, CHAKKI GALI BHGAT SINGH NAGAR NO.1, LINK ROAD, GOREGOAN (WEST) MUMBAI, RS.1,25,000/- WAS PAID TO MAMTA POP WORKS (PAN : A BRT0124P), SATHI EKTA MANDAL CHAWL, SALT PAN ROAD NO.216, SAN GAM NAGAR WADALA, RS.1,82,000/- WAS PAID TO PREMA FACADE SYS TEM, 401, BUILDING, 52 CTS6A PART, MAHADA, SR,263,96T/S SRD ROAD, PROJE CT LINK ROAD KANDIWALI(W) MUMBAI, AND RS. 1,65,000/- WAS PA ID TO PRUSOTTAM ( PAN :BKHP6206D) DATA NAGAR, NIMONIYA BAUG, NEAR GO VANDI BRIDGE MUMBAI. THE PAYMENTS WERE MADE THROUGH CHEQU ES. THE ASSESSING OFFICER FURTHER OBSERVED THAT BESIDES THE 4 PARTIES A PAYMENT OF RS. 1,28,000/- WAS MADE TO THE MR. NANKAN ALI AND R S.53,000/- TO RIAZ AHMED. IN ORDER TO VERIFY THE GENUINENESS OF TRANSA CTION NOTICES UNDER SECTION 133(6) WERE ISSUED TO THE PARTIES. THE ASSE SSING OFFICER OBSERVED THAT NOTICES ISSUED TO ALL THE PARTIES WERE RETURN BACK UNSERVED. THE ASSESSING OFFICER CONCLUDED THAT MERE PAYMENT MADE BY CHEQUES DOESNT PROVE THAT AMOUNT HAS BEEN INCURRED WHOLLY AND EXCL USIVELY FOR THE PURPOSE OF BUSINESS. IT WAS FURTHER CONCLUDED THAT THE ASSESSEE WAS ITA NO.27/M/2013 AY 2006- 07 SPACE KRAFT INTERIOR 5 REQUIRED TO DEDUCT THE TAX AT SOURCE AS PER SECTION 194C OF THE ACT. AS NO TAX AT SOURCE WAS DEDUCTED, THUS, THE ASSESSING OFF ICER DISALLOWED THE ENTIRE AMOUNT OF RS. 8,23,000/- UNDER SECTION 40(A) (IA) OF THE ACT. THE LEARNED COMMISSIONER (APPEALS) CONFIRMED THE ADDITI ON ON SIMILAR LINES. WE HAVE NOTICED THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL TO DISPROVE THE CONTENTION OF ASSESSEE THAT THE PAY MENTS WERE MADE EITHER DIRECTLY OR TO THE SUPERVISOR/TEAM LEADERS O F THE CASUAL LABOURER. FURTHER, WE HAVE NOTICED THAT ASSESSEE HAS DISCHARG E HIS PRIMARY ONUS IN PROVIDING THE NAMES AND DETAILS OF ALL CASUAL LABOU R AND THEIR SUB- CONTRACTOR/ SUPERVISOR/ TEAM LEADERS. THERE WAS NO WRITTEN CONTRACT BETWEEN THE ASSESSEE AND THE SAID LABOURERS. WE HAV E SEEN THAT THE COORDINATE BENCH OF TRIBUNAL IN MANISHA CONSTRUCTIO N COMPANY (SUPRA) AND IN TULSI RAM MODI (SUPRA) ALMOST ON SIMILAR FAC TS HELD THAT, WHEN THE ASSESSEE MADE PAYMENTS TO CASUAL WORKER WORKING UNDER ITS DIRECT SUPERVISION AND CONTROL ON DAILY WAGES BASIS AND / OR IT IS NOT BEING A CASE OF CONTRACTS PAYMENT, THUS THE ASSESSEE IS NO T REQUIRED TO DEDUCT TAX AT SOURCE WHILE MAKING THE SAID PAYMENT. THUS, RESP ECTFULLY FOLLOWING THE DECISION OF COORDINATE BENCHES, WE HOLD THAT TH E PROVISION OF SECTION 194C IS NOT APPLICABLE IN THE PRESENT CASE. HENCE, THE GROUND OF APPEAL RAISED BY ASSESSEE IS ALLOWED. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS ALLOWED. ITA NO.27/M/2013 AY 2006- 07 SPACE KRAFT INTERIOR 6 ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JUNE 2 017. SD/- SD/- (G.S.PANNU) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI; DATED 19/06/2017 S.K.PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE