ITO 25(3)(3), MUMBAI V. RATANSHI N. PATEL (HUF), MUMBAI

ITA 2961/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55799 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-10-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 07-05-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: N O N E
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI BENCHES MUMBAI BENCHES MUMBAI BENCHES D DD D, MUMBAI , MUMBAI , MUMBAI , MUMBAI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI T.R.SOOD T.R.SOOD T.R.SOOD T.R.SOOD ( (( (A.M.) A.M.) A.M.) A.M.) AND AND AND AND SHRI R.S. PADVEKAR SHRI R.S. PADVEKAR SHRI R.S. PADVEKAR SHRI R.S. PADVEKAR (J (J (J (J.M.) .M.) .M.) .M.) ITA NO.2961/MUM/2009 ASSESSMENT YEAR : 2005-06 INCOME TAX OFFICER, 25(3)(3), C-11, R.NO.304, PRATYKSHKAR BHAVAN, BANDRA KURLA COMPLEX BUILDING, BANDRA (E), MUMBAI 400051 VS. VS. VS. VS. RATNASHI N. PATEL (HUF), (PROP. NARAYAN CONSTRUCTIONS) B/605, HIGHLAND HARMONY, MAHAVIRNAGAR, KANIDVALI(W), MUMBAI 400067 PAN NO. AAHHR 3895 K (APPLICANT) (APPLICANT) (APPLICANT) (APPLICANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) APPLICANT BY : SHRI C.G.K. NAIR, SR.DR RESPONDENT BY : N O N E DATE OF HEARING: 24/10/2011 DATE OF PRONOUNCEMENT: 28/10/2011 O R D E R O R D E R O R D E R O R D E R PE PEPE PEP P P P R.S. PADVEKAR, (J R.S. PADVEKAR, (J R.S. PADVEKAR, (J R.S. PADVEKAR, (J. .. .M) M)M) M) IN THIS APPEAL THE REVENUE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD. CIT (A)-25 MUMBAI DATED 27.2.2009 FOR THE A SSESSMENT YEAR 2005- 06. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS: 1(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT (A) ERRED IN DIRECTING TO D ELETE THE ADDITIONS OF `20,51,714/- AND `63,000/- MADE ON ACC OUNT OF LABOUR CHARGES AND SUPERVISION CHARGES RESPECTIV ELY. (B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW AND ON THE BASIS OF SUBMISSIONS MADE BY THE APPELLANT, THE LD. CIT (A) ERRED IN HOLDING THAT TH E APPELLANT HAS PRODUCED THE LABOUR REGISTER SHOWING NAME, NUMBER OF DAYS, LABOUR CHARGES AND THEIR SIGNATURE, THUMB IMPRESSION BEFORE THE ASSESSING OFFICER EVEN THOUGH IN THE ASSESSMENT ORDER IT IS CLEARLY MENTIO NED THAT ASSESSEE HAS FAILED TO FURNISH ANY DETAILS WIT H REGARD TO THE LABOUR CHARGES. (C) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE LD. CIT (A) FURTHER ERRED IN IGNORING T HE PROVISIONS OF RUL-46A OF I.T. RULES 1962 AND NOT RE MANDING ITA NO.2961 OF 2009 RATNASHI N PATEL (HUF) MUMBAI 2 THE MATTER TO THE ASSESSING OFFICER O EXAMINE EVIDE NCES PRODUCED BEFORE HER IN CONNECTION WITH LABOUR CHARG ES AND LOAN CONFIRMATION. 2(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE LD. CIT (A) ERRED IN TREATING THE L OAN OF M/S ASHAPURA CONSTRUCTION OF `2,09,212/- AS GENUINE AND DIRECTING TO DELETE THE ADDITION MADE ON THIS GROUN D WHEN NO LOAN CONFIRMATION WAS FILED BY THE ASSESSEE BEFO RE THE ASSESSING OFFICER. (B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW AND ON THE BASIS OF SUBMISSIONS MADE BY THE APPELLANT, THE LD. CIT (A) ERRED IN HOLDING THAT AS SESSEE ALONG WITH HIS LETTER DATED 17.09.2007 HAD FILE LOA N CONFIRMATION AT THE TIME OF ASSESSMENT EVEN THOUGH IN THE ASSESSMENT ORDER IT IS CLEARLY MENTIONED THAT ASSES SEE HAS FILED ONLY A COPY OF LEDGER ACCOUNT OF THE SAID LOAN 2. WHEN THIS MATTER WAS CALLED FOR HEARING, THE LD. DR FOR THE REVENUE WAS PRESENT. NONE APPEARED ON BEHALF OF THE ASSESSE E. FROM THE RECORDS IT IS SEEN THAT IN SPITE OF REPEATED ISSUING OF NOT ICES, THE ASSESSEE NEVER APPEARED. WE, THEREFORE, DECIDED TO DISPOSE OF THIS APPEAL AFTER HEARING THE LD. DR. 3. THE ASSESSEE HUF IS A BUILDING LABOUR CONTRACTOR FOR M/S HIRANANDANI BUILDERS. THE RETURN FILED BY THE ASSES SEE WAS SELECTED FOR SCRUTINY, BUT THE ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT ON THE REASON THAT THERE WAS NO RESPONSE FROM THE ASSESSEE IN SPITE OF DULY SERVING OF NOTICES. THE ASSESSING OFFICER MADE THE FOLLOWING ADDITIONS: I) LOANS - `2,09,212/- II) LABOUR CHARGES - `20,61,714/- III) SALARY TO SUPERVISOR - `63,000/- IV) LOW WITHDRAWAL - `26,000/- ITA NO.2961 OF 2009 RATNASHI N PATEL (HUF) MUMBAI 3 THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A) WHO DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LOANS, LABOUR CHARGES AND SALARY TO SUPERVISOR BUT ENHANCE D INCOME BY ESTIMATING PERSONAL WITHDRAWALS. 4. SO FAR FIRST ISSUE IS CONCERN, THE REVENUE HAS R AISED THE GRIEVANCE FOR DELETING THE ADDITION OF `20,51,714/- AND `63,0 00/- MADE BY THE A.O. ON ACCOUNT OF LABOUR CHARGES AND SUPERVISORS SALAR Y. WE FIND THAT THE LD. CIT (A) HAS GIVEN CATEGORICAL FINDING THAT THIS WAS THE FIRST YEAR THAT THE ASSESSEES TURNOVER HAS EXCEEDED `40.00 LAKHS AND T HE ACCOUNTS WERE AUDITED AND THE ASSESSEE HAS SHOWN NET PROFIT AT 8% . THE LD. CIT (A) HAS FURTHER OBSERVED THAT SO FAR AS THE ISSUE OF NON DE DUCTION OF TDS IS CONCERNED, THE SAID PROVISION WAS NOT APPLICABLE AS IN THE PRECEDING YEAR THE ASSESSEE WAS NOT REQUIRED TO GET HIS ACCOUNT AU DITED. SO FAR AS THE ISSUE OF SALARY TO THE SUPERVISOR IS CONCERNED, THE LD. CIT (A) HAS OBSERVED THAT ONE DHARMENDRA BARDE WAS THE SUPERVISOR WHO WA S PAID A SALARY OF `9000/- P.M. STARTING FROM SEPTEMBER, 2004 TO MARCH , 2005. THE LD. DR VEHEMENTLY ARGUED THAT WHEN THE ASSESSING OFFICER A SKED FOR THE DETAILS, THE ASSESSEE NEVER BOTHERED TO APPEAR OR/AND TO FIL E THE REQUIRED DETAILS BEFORE THE ASSESSING OFFICER, BUT SURPRISINGLY THE ASSESSEE APPEARED BEFORE THE LD. CIT (A) AND FILED THE DETAILS AND TH E ASSESSING OFFICER HAS NO OPPORTUNITY TO EXAMINE THE DETAILS FILED BY THE ASSESSEE. HE ARGUES THAT THE LD. CIT (A) EVEN DID NOT CALL FOR THE REMA ND REPORT, WHEN THE NEW EVIDENCE WAS FILED. ITA NO.2961 OF 2009 RATNASHI N PATEL (HUF) MUMBAI 4 5. SO FAR AS THE SECOND ISSUE IS CONCERNED, WE FIND THAT THE ASSESSEE HAD ONLY FILED LOAN CONFIRMATION BEFORE THE ASSESSI NG OFFICER BUT DID NOT PRODUCE THE LOAN CREDITOR AND ACCEPTING VERSION OF ASSESSE, THE LD. CIT (A) HAS DELETED THE ADDITION. IN OUR OPINION, THE LD. C IT (A) SHOULD HAVE CALLED FOR THE OBJECTIONS OF THE ASSESSING OFFICER BEFORE DECIDING THE ISSUE. WE, THEREFORE, CONSIDER IT FIT TO RESTORE THE ENTIRE MA TTER TO THE FILE OF THE LD. CIT (A) FOR FRESH ADJUDICATION AFTER CALLING THE OB JECTIONS/REMAND REPORT FROM THE ASSESSING OFFICER. 6. IN THE RESULT, THE APPEAL FILED BY REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS DAY OF 28TH OCTOBER, 2011 . SD/- (T.R. SOOD) ACCOUNTANT MEMBER SD/- (R. S. PADVEKAR) JUDICIAL MEMBER MUMBAI, DATED: 28TH 28TH 28TH 28TH OCTOBER, OCTOBER, OCTOBER, OCTOBER, 2011 2011 2011 2011 VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (A) CONCERNED 4. THE CIT CONCERNED 5. DEPARTMENTAL REPRESENTATIVE, BENCH D MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO.2961 OF 2009 RATNASHI N PATEL (HUF) MUMBAI 5 DATE INITIAL DRAFT DICTATED ON 24. 10.2011 SR. P.S. DRAFT PLACED BEFORE THE AUTHOR 25-10-2011 SR. P.S . DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER AM/JM DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM APPROVED DRAFT COMES TO THE SR. PS SR. P.S. KEPT FOR PRONOUNCEMENT ON SR. P.S. FILE SENT TO THE BENCH CLERK SR. P.S. DATE ON WHICH FILE GOES TO THE HEAD CLERK DATE ON WHICH FILE GOES TO THE ASSTT. REGISTRAR FOR SIGNATURE ON THE ORDER. DATE OF DISPATCH