Shri Bhadresh Kumar S. Shah, Ahmedabad V. Asstt. Commissioner Of Income Tax, Bharuch

ITA 3079/AHD/2014

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2125 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 21-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S R MEENA
• Assessee Lawyers: ANIL R SHAH
• Keywords: TDS
• Section: 143(3); 234B; 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH : SURAT BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER ITA.NO.3079/AHD/2014 ASSESSMENT YEAR 2010-2011 SHRI BHADRESHKUMAR S. SHAH, GANDHI BAZAR, AT & PO NETRANG, TAL. VALIA DIST. BHARUCH. C/O. SHRI ANIL R. SHAH, C.A., SHREEJI HOUSE, 4 TH FLOOR, B/H. M.J. LIBRARY, ELLIS BRIDGE, AHMEDABAD PIN 380 006. VS. THE ACIT, BHARUCH CIRCLE, BHARUCH. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI ANIL R. SHAH, C.A. & MS. KINJAL SHAH, C.A. FOR REVENUE : SHRI S.R. MEENA, SR. DR DATE OF HEARING : 24.07.2019 DATE OF PRONOUNCEMENT : 24.07.2019 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-VI, BARODA, DATED 22.09.2014, FOR THE A.Y. 2010-2011, IN WHICH THE ASSESSEE CHALLENGED THE DISALLOWANCE OF CERTAIN EXPENSES. 2 ITA.NO.3079/AHD/2014 SHRI BHADRESHKUMAR S. SHAH, NETRANG, TAL. VALIA DIST. BHARUCH. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME DECLARING INCOME OF RS.22,49,790/-. THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSMENT UNDER SECTION 143(3) WAS MADE VIDE ORDER DATED 25.03.2013 AFTER DISALLOWING RS.20,18,280/- ON ACCOUNT OF LABOUR CHARGES, RS.3,90,599/- ON ACCOUNT OF PETROL AND DIESEL EXPENSES, RS.4,13,371/- ON ACCOUNT OF FREIGHT EXPENSES, RS.23,75,319/- ON ACCOUNT OF LABOUR CHARGES PAYABLE AND RS.4,53,315/- UNDER SECTION 40(A)(IA) OF THE I.T. ACT, 1961. THE ASSESSEE CHALLENGED THESE ADDITIONS BEFORE THE LD. CIT(A). THE LD. CIT(A), HOWEVER, DISMISSED THE APPEAL OF ASSESSEE. ALL THESE DISALLOWANCES ARE IN CHALLENGE IN APPEAL BEFORE THE TRIBUNAL. 3. THE LD. CIT(A) NOTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O. NOTICED THAT ASSESSEE HAD CLAIMED EXPENSES ON ACCOUNT OF LABOUR CHARGES OF RS.1.82 CRORES, OUT OF WHICH, 05 SUMS HAVE BEEN PAID IN EXCESS OF RS.20,000/- IN CASH AMOUNTING TO RS.20,18,280/-. THE A.O. REQUIRED THE ASSESSEE TO PRODUCE RELEVANT BILLS AND VOUCHERS ALONG WITH EMPLOYEE REGISTER TO VERIFY GENUINENESS OF THE 3 ITA.NO.3079/AHD/2014 SHRI BHADRESHKUMAR S. SHAH, NETRANG, TAL. VALIA DIST. BHARUCH. PAYMENT. HOWEVER, THE ASSESSEE FAILED TO DO SO. THE A.O. ASKED THE EXPLANATION OF ASSESSEE AS TO WHY THE SAME BE NOT DISALLOWED. THE ASSESSEE ARGUED IN REPLY THAT HE WAS A ROAD CONTRACTOR AND HIS LABOUR PAYMENTS WERE ONLY 30% OF THE TOTAL RECEIPTS WHICH IS QUITE REASONABLE IN THIS TYPE OF WORK. THE ASSESSEE SUBMITTED THAT WHEREVER APPLICABLE TAX WAS DEDUCTED AND ONLY RS.20,18,280/- WAS PAID TO MISCELLANEOUS LABOURERS ON VOUCHERS AT SITE. HOWEVER, THE ASSESSEE CLAIMED THAT DUE TO DISPUTE WITH HIS EARLIER ACCOUNTANT WHO DID NOT HANDOVER THE RELEVANT VOUCHERS TO THE ASSESSEE, HE WAS UNABLE TO PRODUCE THE RELEVANT BILLS AND VOUCHERS BEFORE A.O. THE A.O. HELD THAT IN THE ABSENCE OF RELEVANT EVIDENCES, IT WAS NOT POSSIBLE TO VERIFY THE GENUINENESS OF THE PAYMENTS AND IDENTITY OF THE PAYEE IS ALSO NOT BEEN ESTABLISHED. HE HAS, THEREFORE, HELD THAT THE AMOUNT IN QUESTION HAS NOT BEEN WHOLLY AND EXCLUSIVELY INCURRED FOR THE PURPOSE OF BUSINESS. THE A.O. IN ALTERNATE HELD THAT AMOUNT IS NOT ALLOWABLE DEDUCTION ON ACCOUNT OF NON-DEDUCTION OF TDS. THE LD. CIT(A) CONFIRMED THE ADDITION BECAUSE ASSESSEE FAILED TO PRODUCE EVEN A SINGLE 4 ITA.NO.3079/AHD/2014 SHRI BHADRESHKUMAR S. SHAH, NETRANG, TAL. VALIA DIST. BHARUCH. BILL OR VOUCHER FOR THE IMPUGNED CASH PAYMENT FOR VERIFICATION. THE LD. CIT(A) ACCORDINGLY CONFIRMED THE ADDITION. 3.1. AS REGARDS THE DISALLOWANCE OF RS.3,90,599/- ON ACCOUNT OF PETROL AND DIESEL EXPENSES, ASSESSEE HAS MADE CASH PAYMENTS, BUT, FAILED TO PRODUCE THE BILLS AND VOUCHERS FOR THE CLAIM OF SAME EXPENDITURE. THE A.O. ACCORDINGLY MADE THE ADDITION. ASSESSEE SUBMITTED THAT PROVISIONS OF TDS WOULD NOT APPLY, THEREFORE, ADDITION CANNOT BE MADE. THE LD. CIT(A) HOWEVER, NOTED THAT ASSESSEE FAILED TO PRODUCE BILLS AND VOUCHERS OF THESE EXPENDITURE, THEREFORE, EXPENSES ARE BOGUS IN NATURE AS SAME ARE NOT VERIFIABLE. THE LD. CIT(A) ACCORDINGLY UPHELD THE ADDITION. 3.2. AS REGARDS THE DISALLOWANCE OF RS.4,13,371/- OUT OF FREIGHT EXPENSES, THE A.O. SIMILARLY NOTED THAT ASSESSEE MADE CASH PAYMENTS, BUT, NO BILLS AND VOUCHERS TO VERIFY GENUINENESS OF THE PAYMENTS HAVE BEEN FURNISHED. THE LD. CIT(A) ON THE SAME REASONING THAT NO BILLS AND VOUCHERS HAVE BEEN PRODUCED, CONFIRMED THE ADDITION. 5 ITA.NO.3079/AHD/2014 SHRI BHADRESHKUMAR S. SHAH, NETRANG, TAL. VALIA DIST. BHARUCH. 3.3. AS REGARDS ADDITION OF RS.23,75,319/- ON ACCOUNT OF LABOUR CHARGES PAYABLE BY ASSESSEE, THE A.O. ASKED THE ASSESSEE TO EXPLAIN THIS ISSUE AND FURNISHED EVIDENCE IN SUPPORT OF THE SAME. THE ASSESSEE SUBMITTED THAT AMOUNTS HAVE BEEN DEBITED AS PROVISION FOR THE MONTH OF MARCH WHICH HAVE BEEN PAID IN SUBSEQUENT YEAR. FURTHER, NO BILLS AND VOUCHERS HAVE BEEN PRODUCED. THE A.O. ACCORDINGLY MADE THE ADDITION. THE ASSESSEE SIMILARLY DID NOT PRODUCE ANY BILLS AND VOUCHERS BEFORE THE LD. CIT(A) AND EVEN NO EVIDENCE OF PAYMENTS MADE IN SUBSEQUENT YEAR HAVE BEEN FILED. THE LD. CIT(A) ACCORDINGLY CONFIRMED THE ADDITION. 3.4. AS REGARDS DISALLOWANCE OF RS.4,53,315/- FOR NON- DEDUCTION OF TDS, THE ASSESSEE DID NOT OBJECT TO THE ADDITION BEFORE THE A.O, THEREFORE, ADDITION WAS MADE ON AGREED BASIS. THE LD. CIT(A) IN THE ABSENCE OF NON- DEDUCTION OF TDS AND THAT ASSESSEE HAD NO OBJECTION FOR THE ADDITION, DISMISSED THIS GROUND OF APPEAL OF ASSESSEE. 6 ITA.NO.3079/AHD/2014 SHRI BHADRESHKUMAR S. SHAH, NETRANG, TAL. VALIA DIST. BHARUCH. 4. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. LEARNED COUNSEL FOR THE ASSESSEE MERELY CONTENDED THAT PROVISIONS OF TDS WOULD NOT APPLY TO THE CASE. HOWEVER, HE DID NOT REFER TO ANY EVIDENCE WITH REGARD TO GENUINENESS OF THE PAYMENT ON ACCOUNT OF ALL THESE EXPENSES. NO BILLS AND VOUCHERS HAVE BEEN PRODUCED BEFORE US TO SUBSTANTIATE THE GENUINENESS OF THE PAYMENTS. LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT G.P. RATE OF THE ASSESSEE IS BETTER, THEREFORE, ALL ADDITIONS MAY BE DELETED. 5. ON THE OTHER HAND, LD. D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT NO INTERFERENCE IS REQUIRED IN THE MATTER. THE A.O. DISALLOWED THE ABOVE EXPENSES FOR WANT OF EVIDENCE THAT ASSESSEE DID NOT PRODUCE BILLS AND VOUCHERS IN SUPPORT OF THE CLAIM OF DEDUCTION OF THE EXPENDITURE. SINCE ASSESSEE CLAIMED DEDUCTION OF THE EXPENDITURE, THEREFORE, BURDEN IS UPON THE ASSESSEE TO PROVE THAT EXPENDITURE HAVE BEEN 7 ITA.NO.3079/AHD/2014 SHRI BHADRESHKUMAR S. SHAH, NETRANG, TAL. VALIA DIST. BHARUCH. INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS WHICH SHOULD ALSO BE SUPPORTED BY BILLS AND VOUCHERS. HOWEVER, ASSESSEE FAILED TO PRODUCE ANY BILLS AND VOUCHERS IN SUPPORT OF THE ABOVE CLAIM OF EXPENDITURE. THE AUTHORITIES BELOW IN ALTERNATIVELY CONFIRMED THE DISALLOWANCES FOR NON-DEDUCTION OF TDS. SINCE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE EXPENDITURE, THEREFORE, WHETHER TDS PROVISION WOULD APPLY OR NOT WOULD NOT BE RELEVANT. EVEN ON ONE ISSUE OF DISALLOWANCE OF RS.4,53,315/- BEING TESTING CHARGES, THE ASSESSEE ADMITTED FOR THE ADDITION BEFORE THE A.O. THEREFORE, ASSESSEE HAS NO RIGHT TO DISPUTE THE STATEMENT MADE BEFORE THE AUTHORITIES BELOW. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY ERROR IN THE ORDERS OF THE AUTHORITIES BELOW IN DISALLOWING ALL THESE EXPENSES. IN VIEW OF THE ABOVE, GROUND NOS. 1 TO 5 OF THE APPEAL OF ASSESSEE ARE DISMISSED. 7. ON GROUND NO.6, ASSESSEE CHALLENGED THE LEVY OF INTEREST UNDER SECTION 234B AND 234D OF THE I.T.ACT. LEARNED COUNSEL FOR THE ASSESSEE DID NOT ARGUE ON THIS GROUND. FURTHER CHARGING OF INTEREST IS MANDATORY AND 8 ITA.NO.3079/AHD/2014 SHRI BHADRESHKUMAR S. SHAH, NETRANG, TAL. VALIA DIST. BHARUCH. CONSEQUENTIAL IN NATURE. NO INTERFERENCE IS CALLED FOR IN THE MATTER. 8. IN THE RESULT, APPEAL OF ASSESSEE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (O.P.MEENA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED 24 TH JULY, 2019 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT, SURAT BENCH, SURAT 6. GUARD FILE. //BY ORDER// ASST. REGISTRAR, ITAT, SURAT BENCH BENCH.