ACIT, New Delhi V. M/s. Opera House Exports Ltd, New Delhi

ITA 2752/DEL/2012

• Counselvise Citation: 275220114 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 17-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 06-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VED JAIN; MRS RANO JAIN CAS
• Assessee Lawyers: MRS REN UKA JAIN GUPTA SENIOR
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E: NEW DELHI) BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2752/DEL/ 2012 (ASSESSMENT YEAR : 2008-09) ACIT, CIRCLE 13 (1), VS. M/S. OPERA HOUSE EXPORTS LTD., NEW DELHI. D 12/2, OKHLA INDUSTRIAL AREA, PHASE II, NEW DELHI 110 020. (PAN : AAACO0020F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN & MRS. RANO JAIN , CAS RESPONDENT BY : MRS. REN UKA JAIN GUPTA, SENIOR DR O R D E R PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE EMANATES FROM THE ORDER OF THE CIT (APPEALS)-XVI, NEW DELHI DATED 13.01.2012. 2. THE ASSESSEE COMPANY IS ENGAGED IN THE JOB WORK FOR READYMADE GARMENTS. THE RETURN OF INCOME WAS FILED ON 19.09.2 008. THE ASSESSEE COMPANY CLAIMED RS.63,60,730/- UNDER THE HEAD JOB WORK CHARGES PAID IN THE PROFIT & LOSS ACCOUNT. THE ASSESSING O FFICER HELD THAT NO TDS WAS DEDUCTED. THE ASSESSING OFFICER ASKED FOR B ILLS AND VOUCHERS. THE ASSESSEE SUBMITTED COPIES OF PAYMENT SHEETS TO THE TAILORS. THE ASSESSEE WAS ALSO HAVING A SISTER CONCERN, NAMELY, M/S. ONS CREATION ITA NO.2752/DEL/2012 2 PVT. LTD. AND ITS ASSESSMENT WAS ALSO UNDER SCRUTIN Y DURING RELEVANT PERIOD. LD. AR SUBMITTED THAT WHILE SUBMITTING THE DETAILS THERE WAS MIX UP IN FILING THE DETAILS. THE DETAILS OF M/S. ONS C REATION PVT. LTD. WERE SUBMITTED AS DETAILS OF ASSESSEE AND ON THAT BASIS, THE ASSESSING OFFICER REACHED AT A CONCLUSION THAT PAYMENTS TO THE TAILOR S WERE FABRICATED. IN APPEAL BEFORE CIT (A), ASSESSEE SUBMITTED PROPER DE TAILS AS ADDITIONAL EVIDENCE WHICH HAS BEEN DULY CONSIDERED AND ALLOWED RELIEF TO ASSESSEE. THE CIT (A) HAS GRANTED THE RELIEF TO THE ASSESSEE BY HOLDING AS UNDER :- 3.6 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT AND I HAVE ALSO PERUSED THE ASSESSMENT ORDER. THE FACT TH AT THE APPELLANT HAS PAID THE FABRICATION CHARGES FOR THE PURPOSE OF ITS BUSINESS IS NOT IN DISPUTE. THE AR OF THE APPELLANT HAS STATED THAT TH E SAME HAVE BEEN PAID TO VARIOUS TAILORS WORKING UNDER THE APPELLANT COMPANY AS SALARIED EMPLOYEES. THE SALARY PAID TO SUCH TAILORS IS DIRECTLY BOOKED UNDER THE HEAD 'FABRICATION CHARGES' AS AGAINST UND ER THE HEAD 'SALARY & WAGES'. THE SAID ACCOUNTING PROCESS HAS BEEN FOLLOW ED BY THE APPELLANT IN THE PAST AS WELL. THE AR HAS ALSO STAT ED THAT SINCE NO EMPLOYEE WAS PAID A SUM OVER AND ABOVE THE MINIMUM LIMIT WHICH ATTRACTS THE PROVISIONS OF TAXATION NO TDS WAS DEDU CTED. THE AR HAS ALSO PRODUCED THE WAGE SHEETS FOR THE PERIOD UNDER CONSIDERATION THROUGH WHICH THE PAYMENT HAS BEEN MADE TO VARIOUS TAILORS/LABORERS. ON GOING THROUGH THE SAME I FIND STRENGTH IN THE AR GUMENTS FORWARDED BY THE APPELLANT COMPANY. THE ASSESSING O FFICER HAS NOT BROUGHT FORWARD ANY FACT TO NEGATE THE GENUINENESS OF THE WAGE SHEETS PRODUCED BEFORE HIM. HE HAS ALSO NOT BROUGHT FORWAR D ANY FACT TO PROVE THAT THE PAYMENT WAS MADE TO SOME CONTRACTOR ON WHICH THE APPELLANT WAS LIABLE TO DEDUCT TDS. ALSO IT IS PRAC TICALLY IMPOSSIBLE FOR ANY ASSESSEE TO HAVE SEPARATE CONTRACTS WHICH A TTRACT LIABILITY TO DEDUCT TDS WITH SO MANY TAILORS TO WHOM PAYMENTS HA VE BEEN MADE. THE FACT THAT THE APPELLANT HAS PAID THE AMOUNT HAS ALSO NOT BEEN DISPUTED. THE FACT THAT THE SAME WAS PAID TO ITS OW N EMPLOYEES IS CLEARLY EVIDENT FROM THE WAGE SHEETS. THE SAME CLEA RLY STATE THE MONTHS OF PAYMENT, NAMES OF THE EMPLOYEES, AMOUNTS PAID AND CONTAIN THE SIGNATURES OF THE RESPECTIVE EMPLOYEES. THE APPELLANT HAS HUGE AMOUNT APPEARING UNDER THE HEAD MACHINERIES IN ITS SCHEDULE OF FIXED ASSETS. IT CAN BE PRESUMED THAT THESE MACHINE S WOULD HAVE BEEN USED BY THESE EMPLOYEES ONLY. CONSIDERING THESE FAC TS I FIND THAT THE DISALLOWANCE OF RS.63,60,730/- MADE BY THE ASSESSIN G OFFICER IS ITA NO.2752/DEL/2012 3 WITHOUT APPRECIATING THE FACTS OF THE CASE AND THE NATURE OF BUSINESS OF THE APPELLANT COMPANY. THE SAME, THEREFORE, CANNOT BE SUSTAINED. IN VIEW OF THE FACTS, THE DISALLOWANCE OF RS.63,60,730 1- AS DISCUSSED ABOVE IS DELETED. 3. NOW, THE REVENUE IS IN APPEAL BEFORE US BY TAKIN G THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE TAILORS WERE NOT ON THE COMPANYS ROLE AND ALLOWED RELIEF TO THE ASSESSEE O F RS.63,60,730/- ON ACCOUNT OF TAILORS SALARY. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN NOT PROVIDING ANY FINDINGS ON THE SIGNIFIC ANT FACT THAT THE NAME OF THE TAILORS, MONTH OF PAYMENT AND EVEN THE AMOUNT OF PAYMENT ARE SAME FOR THE ASSESSEE COMPANY AS WELL A S FOR M/S ONS CREATIONS PVT. LTD. IN OTHER WORDS, THE SAME EMPLOY EE HAS WORKED AT THE SAME TIME FOR BOTH THE COMPANIES. 3. THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FR ESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL. 4. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE ASSESSEE IS ENGAGED IN THE JOB WORK AND A SISTER CONCERN OF THE ASSESSE E IN THE NAME OF M/S. ONS CREATION PVT. LTD. WAS ALSO ENGAGED IN THE SAME BUSINESS. SCRUTINY ASSESSMENTS OF BOTH WERE GOING ON TOGETHER. DURING THE ASSESSMENT PROCEEDINGS OF ASSESSEE, THE DETAILS OF JOB WORK CH ARGES OF M/S. ONS CREATION PVT. LTD. WERE FILED IN THE CASE OF ASSESS EE INADVERTENTLY AND THIS CREATED A MISUNDERSTANDING AND ASSESSING OFFICER HE LD THE JOB CHARGES OF ASSESSEE WERE NOT GENUINE AND FABRICATED. IN THE AP PEAL BEFORE THE CIT (A), THE ASSESSEE SUBMITTED THE CURRENT DETAILS OF JOB CHARGES ALONG WITH NECESSARY DETAILS. THE CIT (A) ADMITTED THE ADDITIO NAL EVIDENCES AND ON THAT BASIS, THE RELIEF HAS BEEN GRANTED. THESE EXPE NSES WERE PAID TO ITA NO.2752/DEL/2012 4 VARIOUS TAILORS WORKING WITH THE ASSESSEE AS SALARY /WAGES TO TAILORS/WORKERS AND WERE BOOKED UNDER THE HEAD FAB RICATION CHARGES AS AGAINST THE HEAD SALARY AND WAGES. THE WAGE SHEET WAS ALSO PRODUCED. SINCE NO AMOUNT WAS PAID TO ANY OF THE EMPLOYEE EXC EEDING THE MINIMUM LIMIT TO ATTRACT THE TDS PROVISIONS, THEREF ORE, NO TDS WAS DEDUCTED. NO DEFECTS HAVE BEEN FOUND IN THE WAGE SH EETS PRODUCED BEFORE THE AUTHORITIES BELOW EVIDENCING THE PAYMENTS TO VA RIOUS TAILORS AND LABORERS. THE REVENUE HAS FAILED TO NEGATE THE GENU INENESS OF THE WAGE SHEETS PRODUCED BEFORE THE AUTHORITIES BELOW. KEEPI NG THESE FACTS IN VIEW, WE FIND NO MERITS IN THE APPEAL OF THE REVENUE, HEN CE THE SAME STANDS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF OCTOBER, 2013. SD/- SD/- (A.D. JAIN) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 29 TH DAY OF OCTOBER, 2013 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT NEW DELHI