The Ranasan Group Majoor Kamdar Sahakari Mandli Ltd., Sabarkantha V. The Income tax Officer,S.K.Ward-2, Sabarkantha

ITA 3110/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9377 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 11-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 04-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B
• Assessee Lawyers: S N DIVATIA
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.3110/AHD/2015 ( / ASSESSMENT YEAR : 2008-09) THE RANASAN GROUP MAJOOR KAMDAR SAHKARI MANDLI LTD., AT & PO RANASAN, TAL.PRANTIJ DIST.SABARKANTHA 383 305 / VS. THE INCOME TAX OFFICER SK WARD-2 HIMATNAGAR-383 001 DIST.SABARKANTH ./ ./ PAN/GIR NO. : AAAFT 9281 A ( ' / APPELLANT ) .. ( #' / RESPONDENT ) ' $ / APPELLANT BY : SHRI S.N. DIVATIA, AR #' % $ / RESPONDENT BY : SHRI B.PANDA, SR.DR &'( % ) / DATE OF HEARING 11/02/2016 *+, % ) / DATE OF PRONOUNCEMENT 26/02/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-2, AHMEDABAD [CIT(A) IN SHORT] DATED 27/08/2015 PERTAINING TO ASSESSMENT Y EAR (AY) 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL:- ITA NO.3110 /AH D/2015 THE RANASAN GROUP MAJOOR KAMDAR SAHKARI MANDLI LT D. VS. ITO ASST.YEAR 2008-09 - 2 - [1] THE LD. CIT (A) HAS ERRED IN CONFIRMING THE DI SALLOWANCE OF THE FOLLOWING EXPENSES THROUGH THE TOTAL INCOME OF THE COLLECTIVE DISPOSAL OF LABOUR OF ITS MEMBERS IS DEDUCTIBLE U/S. 80P(2)(VI) OF THE I. T. ACT. NET PROFIT AS PER PROFIT AND LOSS A/C. RS.1,56,991/- LABOUR EXPENSES RS.5,00,000/- NOT ALLOWABLE EXPENSES RS.3,33,192/- TOTAL RS.9,90,183/- [2] THE LD. CIT (A) IS ALSO ERRED IN DISALLOWING THE LABOUR EXPENSES OF RS. 5,00,000/- IS NOT LEGAL. THE APPELLANT SUBMITS THAT SEPARATE DISALLOWANCE IS NOT REQUIRED AS THE INCOME OF THE APPELLANT IS DEDUCTIBLE U/S. 80P(2)(VI) OF T HE I. T. ACT UNDER THE HEAD ' COLLECTIVE DISPOSAL OF LABOUR OF ITS MEMBERS'. [3] THE APPELLANT THEREFORE PRAYS THAT THE HON. T RIBUNAL SHOULD DECIDE THAT THE INCOME OF THE APPELLANT IS FROM THE COLLECTIVE DISPOSAL OF LABOUR AND HENCE DEDUCTIBLE. [4] THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALT ER, EDIT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL AT THE T IME OF OR BEFORE THE HEARING OF THE APPEAL. 2. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAI NST CONFIRMATION OF ADDITION OF RS.8,33,192/-. THIS IS SECOND ROUND OF LITIGATION. IN EARLIER ROUND, THE ISSUE WAS RESTORED BY THE TRIBUNAL TO TH E FILE OF ASSESSING OFFICER (AO) FOR DE NOVO ASSESSMENT. THE AO MADE ADDITION ON THE BASIS THAT NO EVIDENCE IN SUPPORT OF ASSESSEES CL AIM WAS FILED. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A), AND THE LD.CIT(A) DISMISSED THE APPEAL ON THE GROUND THAT THE ASSESSE E HAS NOT FURNISHED THE ITA NO.3110 /AH D/2015 THE RANASAN GROUP MAJOOR KAMDAR SAHKARI MANDLI LT D. VS. ITO ASST.YEAR 2008-09 - 3 - REQUISITE DETAILS IN SUPPORT OF ITS CLAIM. AGGRIEV ED BY THIS ORDER, THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 3. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE AUTHORITIES WERE NOT JUSTIFIED IN MAKING THE ADDITION AND CONFIRMING THE SAME. HE SUBMITTED THAT THE ASSESSEE WAS NOT GIVEN SUFFICIEN T OPPORTUNITY TO REPRESENT HIS CASE. HE REITERATED THE SUBMISSIONS AS WERE MADE IN THE STATEMENT OF FACTS. 3.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT IT WAS INCUMBENT UPON THE ASSESSEE TO PROVE THE EXPENDITURE BY FILING SUPPORTING EVIDENCES. BUT TH E ASSESSEE IN THE PRESENT CASE HAS GROSSLY FAILED TO DO SO. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO OBSERVED THAT THE ISSUES RAISED BY THE AO IN THE ORIGINAL ASSESSMENT ORDER DATED 08/12/08/2014 STILL STOOD UNSUPPORTED. IT WAS OBSERVED THAT THE GENUINENESS OF THE TRANSACTIO N OF THE LABOUR EXPENSES, THE ASSESSEE COULD NOT FURNISH ANY SUPPOR T EVIDENCE. FURTHER, IT IS OBSERVED THAT THE NOTICE TO THIS EFFECT WAS GIVE N TO THE ASSESSEE BUT THE ASSESSEE COULD NOT SUBSTANTIATE. ON APPEAL TO THE LD.CIT(A), THE LD.CIT(A) HAS RECORDED AT PAGE NO.2 OF HIS ORDER AS UNDER:- ITA NO.3110 /AH D/2015 THE RANASAN GROUP MAJOOR KAMDAR SAHKARI MANDLI LT D. VS. ITO ASST.YEAR 2008-09 - 4 - DATE OF ISSUE OF NOTICE DATE OF HEARING FIXED MODE OF SERVICE RESPONSE FROM APPELLANT 23/03/2015 12/05/2015 BY SPEED POST AR OF THE APPELLANT SOUGHT ADJOURNMENT AND THE CASE WAS ADJOURNED TO 21/05/2015 - 21/05/3025 - AR OF THE APPELLANT SOUGHT ADJOURNMENT AND THE CASE WAS ADJOURNED TO 17/06/2015 17/06/2015 - NOBODY ATTENDED THE HEARING. 07/07/2015 17/07/2015 BY SPEED POST AR OF THE APPELLANT SOUGHT ADJOURNMENT AND THE CASE ADJOURNED TO 28/07/2015 - 28/07/2015 - AR OF THE APPELLANT SOUGHT ADJOURNMENT AND THE CASE WAS ADJOURNED TO 29/07/2015. - 29/07/2015 - NOBODY ATTENDED AND THE CASE WAS ADJOURNED TO 11/08/2015. - 11/08/2015 - AR OF THE APPELLANT SOUGHT ADJOURNMENT AND THE CASE WAS ADJOURNED TO 25/08/2015. 4.1. THE LD.CIT(A) PROCEEDED TO DECIDE THE ISSUES I N PARA 2.3 TO 3.1 BY OBSERVING AS UNDER:- 2.3. DECISION: ITA NO.3110 /AH D/2015 THE RANASAN GROUP MAJOOR KAMDAR SAHKARI MANDLI LT D. VS. ITO ASST.YEAR 2008-09 - 5 - I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION OF THE APPELLANT. IN THIS CASE, ORIGINAL ASSESSMENT U/S. 143(3) HAS BEEN COMPLETED ON 08/12/2010 WITH THE AD DITION OF RS.5 LACS AS UNEXPLAINED LABOUR EXPENSES, RS.1,27,213/- AS INCOM E TAX, RS.15,225/- AS SURCHARGE AND RS.1,90,754/- AS PENALTY TOTALLING TO RS.8,33,192/-. ON APPEAL OF THE APPELLANT, THE CIT(A), AHMEDABAD-VIII, VIDE ORDER DATED 09/11/2012, HAS CONFIRMED THE ADDITION. AGAINST THE ORDER OF CI T(A), ON APPEAL OF THE APPELLANT, THE HON'BE IT AT IN ITA NO. 476/AHD/2013 DATED 31/10/2013 HAS RESTORED BACK FOR DE-NOVO ADJUDICATION TO THE FILE OF THE AO FOR DECIDING THE MATTER AFRESH, AFTER MAKING NECESSARY VERIFICATION AND ALLOWING DUE OPPORTUNITY OF HEARING TO THE APPELLANT. 2.4. DURING THE COURSE OF SET ASIDE ASSESSMENT P ROCEEDINGS, THE AO ISSUED VARIOUS NOTICES WHICH HAVE BEEN DISCUSSED IN THE AS SESSMENT ORDER ITSELF AND ALSO ISSUED A SHOW CAUSE NOTICE. HOWEVER, THE AR OF THE APPELLANT SUBMITTED THAT THE BOOKS OF ACCOUNTS ARE LOST AND IN ITS SUPP ORT HE FILED THE AFFIDAVIT. IT WAS ALSO OBSERVED THAT THE BOOKS OF ACCOUNTS OF THE APPELLANT HAS NOT BEEN GOT AUDITED AS IT WAS THE LABOUR CO-OPERATIVE MANDLI. S INCE NO BOOKS OF ACCOUNTS WERE PRODUCED NOR ANY VOUCHERS BILLS FOR THEIR CLAI M WERE PRODUCED, THEREFORE, THE CLAIM OF EXPENSES WERE NOT VERIFIABLE IN ABSENC E THEREOF. THUS, THE AO HAS MADE THE ADDITION OF THE ORIGINAL AMOUNTS WHICH HAV E BEEN SUBJECTED TO ADDITION IN THE ORIGINAL ASSESSMENT ORDER. 2.5. IN THE APPELLATE PROCEEDINGS, THE VARIOUS L ETTERS WERE ISSUED TO THE APPELLANT CALLING FOR THE FURNISHING OF THE INFORMA TION'S /. WRITTEN SUBMISSIONS BUT NO COMPLIANCE WAS MADE. 2.6. HAVING CONSIDERED THE FACTS AND SUBMISSIONS, I T IS APPARENT THAT THE APPELLANT HAS NOT SUBMITTED ANY DETAILS AND COPIES OF BILLS VOUCHERS IN SUPPORT OF THE CLAIM OF EXPENDITURES TOWARDS LABOUR EXPENSE S, PENALTIES ETC. EVEN THE CLAIM OF EXPENDITURE TOWARDS INCOME TAX AND SURCHAR GE IS NOT A DEDUCTIBLE EXPENDITURE. THE APPELLANT HAS NOT OBTAINED ANY AUD IT REPORT AND ALSO DID NOT SUBMIT THE BOOKS OF ACCOUNTS FOR VERIFICATION TO SH OW THEIR BONAFIDES, BUT IT WAS SIMPLY STATED THAT THE BOOKS WERE LOST, HENCE C OULD NOT BE PRODUCED. EVEN IN SUPPORT OF ITS CONTENTION, THE APPELLANT HAS NOT PROVIDED ANY COPY OF FIR LODGED FOR PROOF FOR THE SUBMISSION. THUS, THE CLAI MS MADE BY THE APPELLANT ITA NO.3110 /AH D/2015 THE RANASAN GROUP MAJOOR KAMDAR SAHKARI MANDLI LT D. VS. ITO ASST.YEAR 2008-09 - 6 - TOWARDS LABOUR EXPENSES WERE HELD TO BE NON - GENUI NE AND FICTITIOUS AND ONLY CONCOCTED TRANSACTIONS TO CLAIM THE DEDUCTION ONLY. THEREFORE, THE AO'S ACTION FOR MAKING THE DISALLOWANCE IS FOUND CORRECT AND JU STIFIED. ALTHOUGH SEVERAL OPPORTUNITIES WERE GRANTED BY THE AO AND ALSO BY TH IS OFFICE, BUT HAS TOTALLY FAILED TO PROVIDE THE SUPPORTING EVIDENCES IN RESPE CT OF THE CLAIMS. THUS, THE ADDITIONS MADE BY THE AO ARE CONFIRMED. THE RELATED GROUNDS OF APPEAL ARE ACCORDINGLY DISMISSED. 3. THE THIRD GROUND OF APPEAL IS AS UNDER.- 'THE APPELLANT THEREFORE REQUESTS THAT THE ADDITION S MADE BY THE LD. AO SHOULD BE DELETED U/S. 80P(2)(VI) OF THE ACT.' 3.1. DECISION: I HAVE CONSIDERED THE FACTS OFTHE CASE AND CONTENT ION OF THE APPELLANT. THE GROUND OF APPELLANT WITH REGARD TO CLAIM OF DEDUCTI ON U/S. 80P(2)(VI) OF THE I. T. ACT, WHICH IS IN RESPECT OF THE INCOME DERIVED F ROM COLLECTIVE DISPOSAL OF THE LABOURS OF ITS MEMBERS. HOWEVER, THERE IS NOTHING O N RECORD TO VERIFY THE CLAIM OF THE APPELLANT UNDER THE SPECIFIED PROVISIONS. SI NCE, THERE IS THE DISALLOWANCE OF PENALTY AND UNEXPLAINED LABOUR EXPENSES FOR WHIC H THE ELIGIBILITY FOR THE DEDUCTIONS HAS NOT BEEN SUBSTANTIATED, THUS, WITHOU T VERIFICATION IN ABSENCE OF ANY DETAILS AND SUBMISSIONS, THE CLAIM IS NOT GRANT ED. THE GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 4.2. THE ONLY CONTENTION OF THE ASSESSEE FOR NON-FU RNISHING OF THE EVIDENCES IN THE STATEMENT OF FACTS IS AS UNDER:- THE HEARING OF THE APPEAL BEFORE LD.CIT(A) WAS FIX ED ON 25/08/2015. HOWEVER, ON THAT DATE DUE TO THE AGITA TION OF PATIDAR COMMUNITY THE ROADS OF AHMEDABAD MOSTLY CLOSED ON T HAT DATE AND THEREFORE THE A.R. OF THE APPELLANT WAS NOT ABL E TO APPEAR BEFORE THE LD.CIT(A) ON 25/08/2015 & 26/08/2015 ON ACCOUNT OF GUJARAT BANDH AND THEREFORE NO OPPORTUNITY HAS BEEN AVAILABLE TO THE APPELLANT. ITA NO.3110 /AH D/2015 THE RANASAN GROUP MAJOOR KAMDAR SAHKARI MANDLI LT D. VS. ITO ASST.YEAR 2008-09 - 7 - 4.3. FROM THE RECORDS, IT IS EVIDENCE THAT THE ASSE SSEE WAS GIVEN SUFFICIENT OPPORTUNITY TO FURNISH THE EVIDENCES IN SUPPORT OF ITS CLAIM OF EXPENSES. THE AUTHORITIES BELOW HAVE RECORDED THAT NO EVIDENCES WERE FURNISHED. EVEN BEFORE THIS TRIBUNAL ALSO, NO PAPE R-BOOK IS FILED BY THE ASSESSEE ENCLOSING THE EVIDENCES RELATED TO EXPENDI TURE CLAIMED. UNDER THESE FACTS, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE ASSESSEE. HENCE, THE GROUNDS RAISED IN THIS ASSESSEES APPEAL ARE DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 26 TH DAY OF FEBRUARY, 2016 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 26/ 02 /2016 0)..& , '.&../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 123 4 / CONCERNED CIT 4. 4 ( ) / THE CIT(A)-2, AHMEDABAD 5. 5'6 &23 , ) 23 , , 1 / DR, ITAT, AHMEDABAD 6. 689 :( / GUARD FILE. / BY ORDER, #5 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD ITA NO.3110 /AH D/2015 THE RANASAN GROUP MAJOOR KAMDAR SAHKARI MANDLI LT D. VS. ITO ASST.YEAR 2008-09 - 8 - 1. DATE OF DICTATION .. 23.2.16 (DICTATION-PAD 7+ PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..25/2/16 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 26.2.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .26.2.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER