Shri Kuldipsingh Balvantsingh Sodhi, Baroda V. The ACIT.,Circle-3, Baroda

ITA 3144/AHD/2010

• Counselvise Citation: 314420514 RSA 2010
• Duration Of Justice: 3 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-10-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 26-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA
• Assessee Lawyers: N M DARJI A R
• Keywords: Bogus purchase; Opportunity of being heard; Additional evidence
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMADABAD , , , , BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND .., SHRI T.R. MEENA, ACCOUNTANT MEMBER !.. , ' # $ # $ # $ # $ ITA NO. 3144/AHD/2010 ASSESSMENT YEAR :2003-04 SHRI KULDIPSINGH BALVANTSINGH SODHI PROP. OF KAMALA ELECTRICALS 2, SHANTI NAGAR SOCIETY, GOTRI ROAD, BARODA V/S . THE ACIT, CIRCLE-3, BARODA PAN NO. A JHPS 7201F (APPELLANT) .. (RESPONDENT) %& ' ( BY APPELLANT SHRI N. M. DARJI, A.R. )%& ' ( /BY RESPONDENT SHRI O. P. BHATEJA, SR. D.R. *+, ' -' /DATE OF HEARING 08.10.2013 ./0 ' -' /DATE OF PRONOUNCEMENT 20.12.2013 O R D E R PER : SHRI T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF ASSESSEE WHICH H AS EMANATED FROM THE ORDER OF CIT(A)-II, BARODA DATED 12.08.2010 FOR ASSESSMENT YEAR 2003-04. THE EFFECTIVE GROUNDS OF ASSESSEES APPEAL ARE AS U NDER: 1. THE LD. CIT(A)-II, BARODA HAS ERRED IN LAW AND IN FACTS IN HOLDING THAT OUT OF AGRICULTURAL RECEIPT RS. 2,95,5 35/-, THE ACTUAL AGRICULTURAL INCOME AFTER EXPENDITURE INCURRED @ 40 % OF RECEIPT, WOULD REMAIN AT RS.1,77,323/-. ITA NO. 3144/AHD/10 A.Y. 03-04 PAGE 2 THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THAT THE AP PELLANT OWNS 17.88 ACRES OF AGRICULTURAL LAND, HE GETS TWO CROPS EVERY YEAR, THE AGRICULTURAL RECEIPTS ARE SUPPORTED BY BILLS AND IN A.Y. 2004-05, 2005-06 AND 2006-07 THE AO HAS ACCEPTED AGRICULTURA L INCOME AS PER RETURN OF INCOME FILED WHILE FINALISING THE ASS ESSMENT. 2. THE LD. CIT(A) HAS ERRED IN LAW AND IN FAC TS IN CONFIRMING THE DISALLOWANCE OF BRICK EXPENSES RS. 5,04,567/- (PURC HASED FROM SHRI RAMESH LAXMAN VAREEYA RS.1,69,567/- & SHRI GORDHAN LAXMAN VAREEYA RS. 3,35,000/- OF ZAKHAR DIST : JAMNAGAR) B Y NOT ADMITTING THE ADDITIONAL EVIDENCE PRODUCED BEFORE HIM UNDER R ULE 46 A. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FACTS T HAT I) IN THE RELEVANT GROUNDS OF APPEAL NO. 2 FILED WI TH FORM NO. 35, IT HAS BEEN STATED THAT THE COPY OF THE CONFIRMATIO N WAS PERSONALLY SUBMITTED TO THE AO ON 28/3/06, HOWEVER NO COGNIZANCE HAS BEEN TAKEN BY THE AO. II) VIDE ORDER SHEET ENTRIES DT. 8/3/2006 THE ASSE SSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE PURCHASES OF BRICKS MAD E BY THE ASSESSEE SHOULD NOT BE TREATED AS BOGUS AND ACCORDI NGLY THE ADDITION SHOULD NOT BE MADE TO THE TOTAL INCOME. III) VIDE ORDER SHEET ENTRIES HEARING WERE FIXED ON DATED 16/3/2006, 21/3/2006, 22/3/2006 & 23/3/2006 WITHIN SHORT SPAN OF TIME. IV) THE BRICKS PURCHASED FROM THESE PARTIES WERE UT ILIZED IN PERFORMANCE OF IOCL CONTRACT WORK PERTAINS TO CONST RUCTION OF SAMPLE MOTHER TERMINAL AT THE SITE SITUATED AT VADI NAR, JAKHAR VILLAGE DIST: JAMNAGAR. V) MOST OF THE PAYMENTS HAD BEEN MADE TO THESE PAR TIES BY A/C PAYEE CHEQUES. ITA NO. 3144/AHD/10 A.Y. 03-04 PAGE 3 VI) THE PURCHASES OF BRICKS RS. 1,04,000/- FROM MAN SUKH LAXMAN VAREEYA OF JAKHAR OF THE SAME GROUP HAS BEEN ACCEPT ED GENUINE AND ALLOWED AS EXPENSES BY THE AO. THE LD. CIT(A) HAS ACCEPTED ADDITIONAL EVIDENCE FIL ED UNDER RULE 46A IN DISPOSING GROUNDS OF APPEAL NO. 1 & 3 WHILE PASSING THE APPELLATE ORDER. HE IS THEREFORE UNJUSTIFIED IN NOT ADMITTING THE ADDITIONAL PRODUCED BEFORE HIM IN THIS GROUND OF AP PEAL. 3. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN RESTRICTING THE DISALLOWANCE OF LABOUR CHARGES TO THE EXTENT OF RS. 30,000/- OUT OF TOTAL DISALLOWANCE OF RS.50,000/- MADE BY TH E AO. 2. THE FIRST GROUND OF APPEAL IS REDUCING AGRICULTU RE INCOME FROM RS.2,95,535/- TO RS.1,77,323/-. THE A.O. OBSERVED THAT ASSESSEE HAD SHOWN AGRICULTURE INCOME AT RS.2,95,535/- BUT DID NOT FUR NISH ANY PROOF OF AGRICULTURE INCOME DURING THE COURSE OF ASSESSMENT PROCEEDING. THE A.O. GAVE REASONABLE OPPORTUNITY OF BEING HEARD TO SUPPLY THE EVIDENCE OF AGRICULTURE INCOME AND EXPENDITURE INCURRED TO EARN IT. HE GAV E AGAIN REASONABLE OPPORTUNITY ON ORDER SHEET ON 18.01.06, 08.03.06, 1 6.03.06, 21.03.06, 22.03.06 & 23.03.06. EVEN ASSESSEE DID NOT FURNISH THE PURCHASE BILL OF FERTILIZER, SEEDS ETC. IN ORDER TO GROW THE CROP AN D THE SALE BILL OF AGRICULTURE COMMODITY. THEREFORE, HE TREATED WHOLE AGRICULTURE INCOME AS EARNED UNDISCLOSED SOURCE OF INCOME AND MADE ADDITION OF R S.2,95,535/-. 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE A SSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAD ALLOWED THE ASSESSEES AP PEAL PARTLY. THE APPELLANT FILED ADDITIONAL EVIDENCE BEFORE THE CIT( A) WHICH HAS BEEN FORWARDED BY HIM TO THE A.O. BUT EXCEPT SALE BILL N OTHING WAS PRODUCED BEFORE ITA NO. 3144/AHD/10 A.Y. 03-04 PAGE 4 THE ASSESSING OFFICER AT THE TIME OF REMAND REPORT. THEREFORE, IT WAS OBSERVED BY THE LD. CIT(A) THAT APPELLANT HAD FAILE D TO JUSTIFY THE CLAIM OF AGRICULTURE INCOME TO THAT EXTENT SHOWN IN RETURN O F INCOME. IT IS UNBELIEVABLE THAT THERE WAS NO EXPENDITURE INCURRED FOR CULTIVAT ION ON DOING AGRICULTURE ACTIVITY. IF GROSS RECEIPT OF A FARMER IS IN NET I NCOME THEN INDIA WILL BE RICHEST LOOKING IN THE WORLD. THE APPELLANT HAD CLAIMED GR OSS RECEIPT AS INCOME AND HAD NOT SHOWN ANY EXPENDITURE. THE A.O. HAD RIGHTL Y POINTED OUT THAT 40% OF RECEIPT CONSIDERED AS EXPENDITURE INCURRED TOWARDS AGRICULTURE EXPENSES. ACCORDINGLY, HE REDUCED AGRICULTURE INCOME FROM RS. 2,95,535/- TO RS.1,77,320/-. 4. NOW THE ASSESSEE IS BEFORE US AND ARGUED THAT AP PELLANT OWNS 17.88 ACRES OF AGRICULTURE LAND. HE GETS TWO CROPS EVERY YEAR. THE AGRICULTURE RECEIPTS ARE SUPPORTED BY BILLS AND IN A.Y. 04-05, 05-06 & 06-07 THE A.O. HAD ACCEPTED AGRICULTURE INCOME AS PER RETURN OF INCOME FILED. THE ASSESSEE FILED EVIDENCE VIDE LETTER DATED 03.10.2005 REGARDING OWN ERSHIP OF AGRICULTURAL LAND, THE REPORTS OF PATWARI AND COPY OF THE SALE BILLS PRODUCED BEFORE THE A.O. NON AVAILABILITY OF DETAILS OF EXPENSES DOES NOT CONSTITUTE A GROUND FOR DISBELIEVING AGRICULTURAL INCOME. THE SALE BILL OF AGRICULTURE INCOME PERTAINED TO SALE IN MARKET RUN BY THE GOVERNMENT COMMITTEE I T IS NOT REQUIRED TO STATE THE MODE OF PAYMENT OR BEAR ANY REVENUE STAMP. AS REGARDS, THE AGRICULTURE EXPENSES INCURRED NO DETAILS HAVE BEEN CALLED FOR I N THE PAST ASSESSMENT YEAR. AS REGARDS SEED EXPENSES, THE ASSESSEE USES THE CURRENT YEAR CROP AS SEEDS IN THE SUBSEQUENT YEAR. THE OTHER EXPENSES A RE OF NOMINAL NATURE HENCE NO DETAILS HAD BEEN MAINTAINED. HE FURTHER A RGUED THAT AS REGARDS ITA NO. 3144/AHD/10 A.Y. 03-04 PAGE 5 OTHER EXPENSES OF SIMILAR NATURE, IT WAS NOT ANTICI PATED. THE NEED FOR SUCH BILLS BECAUSE SUCH DETAILS WERE NEVER CALLED FOR LA ST 20 YEARS. MOREOVER, INCOME TAX ACT DOES NOT PRESCRIBE ANY SPECIFIC RECO RD REQUIRED TO BE MAINTAINED REGARDING SUCH EXPENSES. IT WAS FURTHER ARGUED THAT IN PAST NO DISALLOWANCE HAS BEEN MADE EVEN IN SCRUTINY ASSESSM ENT. HE FURTHER RELIED UPON FOLLOWING CASES: I. INCOME TAX OFFICERS VS. RAJPAL SINGH, 99 TTJ (MU MBAI) 993 II. K.C. CHOUDHURY VS. INCOME TAX OFFICER (1984) 20 TTJ (GAU) 33 III. KAMAL KISHOR CHANDAK VS. INCOME TAX OFFICER,(2 006)103 TTJ (JD) 843 IN VIEW OF THE ABOVE CITATION, THE LD. CIT(A) WAS N OT JUSTIFIED BY HOLDING THAT 40% OF THE RECEIPT I.E. RS.1,18,215/- TREATED AS IN COME FROM OTHER SOURCE. AT THE OUTSET, LD. SR. D.R. SUPPORTED THE ORDER OF THE CIT(A) AND ARGUED THAT NUMBER OF OPPORTUNITIES HAD BEEN GIVEN BY THE LOWER AUTHORITIES. EVEN THEN, THE ASSESSEE DID NOT FURNISH EVIDENCE OF EXPENSES I NCURRED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. AS DISCUSSED THE LD. A.O. HAD GIVEN MORE T HAN SIX OPPORTUNITIES TO THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDING. WHA TEVER EVIDENCES FURNISHED BY THE ASSESSEE HAD BEEN ADMITTED BY THE LD. CIT(A) AND REMAND REPORT HAD BEEN SOUGHT FROM A.O. UNDISPUTEDLY, THE APPELLANT HAD INDIRECTLY ADMITTED THAT HE DID NOT HAVE ANY EVIDENCE FOR INCU RRING EXPENDITURE. IT IS NOT POSSIBLE THAT NO EXPENDITURE HAD BEEN MADE BY THE A PPELLANT FOR EARNING THE INCOME FROM AGRICULTURE. IT IS KNOWN THAT AGRICULT URIST HAS TO INCUR EXPENDITURE OF IRRIGATION, ELECTRIC EXPENSES, SEEDS EXPENSES, F ERTILIZERS EXPENSES, CHEMICAL, EXPENDITURE ON PLOUGHING, WEEDING, CUTTIN G, THRESHING AND FINALLY ITA NO. 3144/AHD/10 A.Y. 03-04 PAGE 6 TRANSPORTATION TO SEND THE CROP TO MANDI. THE WHOL E RECEIPTS CANNOT BE AGRICULTURE INCOME. THE LD. A.O. ESTIMATED THE EXP ENSES IN REMAND REPORT 30% TO 40%, WHICH WAS ACCEPTED BY THE LD. COMMISSIO NER AT 40%. THEREFORE, IN THE INTEREST OF JUSTICE, IT CAN BE DE CIDED 30% BY US. THEREFORE, THIS GROUND OF APPEAL IS PARTLY ALLOWED. THE A.O. IS DIRECTED TO RE-COMPUTE THE AGRICULTURE INCOME AS PER OUR FINDING. 6. THE SECOND GROUND OF APPEAL IS AGAINST DISALLOWA NCE OF BRICKS EXPENSES OF RS.5,04,567/-. THE ASSESSEE ALSO FILED ADDITIONAL EVIDENCE ON THIS GROUND BEFORE US. THE A.O. OBSERVED THAT HE H AS ISSUED NOTICE U/S.133(6) OF THE IT ACT TO SHRI RAMESH LAXMAN VARI YA AT JAKHAR, DIST.- JAMNAGAR AND STO SHRI GORDHAN LAXMAN VARAIYA ON SAM E ADDRESS FROM WHOM THE ASSESSEE HAD MADE THE PURCHASE OF BRICKS D URING THE YEAR UNDER CONSIDERATION. HOWEVER, NO REPLY WAS GIVEN BY THEM . LD. A.O. GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON 08.03.2006 ON THIS ISSUE AS TO WHY THE PURCHASES MADE FROM BOTH THE PERSONS SHOULD NOT BE TREATED AS BOGUS. VIDE ORDER SHEET ENTRY DATED 16.03.06, 21.03.06, 22 .03.06 & 23.03.06, THE ASSESSEE WAS ASKED TO FURNISH ITS REPLY IN THIS REG ARD. HOWEVER, NO REPLY HAD BEEN SUBMITTED IN THIS REGARD. THEREFORE, A.O. TRE ATED PURCHASES OF BRICKS OF RS.5,04,567/- BOGUS AND ACCORDINGLY, ADDITION WAS M ADE AT RS.5,04,567/-. 7. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ). THE ASSESSEE FILED ADDITIONAL EVIDENCE WHICH WAS FORWARDED TO THE ASSE SSING OFFICER FOR HER COMMENT. IN HER REMAND REPORT DATED 09.08.2007, SH E HAD OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE AND IT WAS SUBMITT ED BY THE A.O. THAT ON INQUIRY MADE IN RESPECT OF THESE PURCHASES, THEY WE RE NOT FOUND IN EXISTENCE. ITA NO. 3144/AHD/10 A.Y. 03-04 PAGE 7 THE APPELLANT WAS GIVEN SEVERAL OPPORTUNITIES BUT N O COMPLIANCE WAS MADE BY THE ASSESSEE BEFORE THE A.O. AT THE TIME OF ASSE SSMENT PROCEEDING. ON MERIT, IT HAD BEEN ARGUED BY THE APPELLANT BEFORE T HE A.O., IF THE INQUIRY LETTER OF THE ASSESSING OFFICER CAME UN-SERVED, HE SHOULD HAVE ISSUED SUMMONS AND FIXED ATTENDANCE. MERELY BECAUSE OF NON ATTEND ANCE NO CONCLUSION CAN BE DRAWN THAT THESE WERE BOGUS PURCHASES. THE APPE LLANT HAD STATED THAT IT WAS NOT GIVEN SUFFICIENT OPPORTUNITY BY THE ASSESSI NG OFFICER TO FURNISH DETAILS AND THAT IS WHY THESE WERE NOT FURNISHED BEFORE THE ASSESSING OFFICER. FROM THE RECORD, THE CIT(A) FOUND THAT THIS CONTENTION O F APPELLANT AS NOT MAINTAINABLE IN PARA-4 OF THE ASSESSMENT ORDER THE ASSESSING OFFICER HAD RECORDED VARIOUS DATES WHEREIN THE ASSESSEE WAS CON FRONTED ON THIS ISSUE BUT NO REPLY WAS GIVEN. FROM THE FACTS AVAILABLE O N RECORD IT WAS APPARENT THAT THERE WAS NO BONAFIDE REASONS FOR THE APPELLAN T NOT TO FURNISH DETAIL BEFORE THE ASSESSING OFFICER AND THEREFORE, ADDITIO NAL EVIDENCE FILED WAS NOT ADMITTED. THE APPELLANT COULDNOT PICK AND CHOOSE F AVOUR TO FILE DETAILS. FURTHER THESE DOCUMENTS WOULD REQUIRE BASIC INVESTI GATION REGARDING THEIR GENUINENESS WHICH WAS NOT POSSIBLE AT THIS STAGE. THE ADDITIONAL EVIDENCES WERE NOT ADMITTED. THUS, THIS GROUND WAS REJECTED BY THE CIT(A). 8. NOW THE ASSESSEE IS BEFORE US. LD. A.R. SUBMITT ED THAT CONFIRMATIONS OF THESE PARTIES WERE PERSONALLY SUBMITTED TO THE A .O. ON 28.03.2006. HOWEVER, NO COGNIZANCE HAD BEEN TAKEN BY THE A.O. BEFORE LD. CIT(A), THE APPELLANT HAD PRODUCED THE COPY OF THE ACCOUNTS OF RAMESH LAXMAN VARIA, GORDHAN LAXMAN VARIA AND MANSUKH LAXMAN VARIA WITH THEIR CONFIRMATIONS OF THE ACCOUNTS AND COPY OF THE BILLS AS REGARDS PU RCHASE OF THE MATERIALS, ITA NO. 3144/AHD/10 A.Y. 03-04 PAGE 8 WHICH WAS SUPPOTED WITH DETAILS REGARDING PARTICULA RS OF DATE, CHALLAN NO., TRUCK NO., QUANTITY OF THE ITEMS, RATE, THE AMOUNT OF EACH TRIPS ETC. IT ALSO GIVES THE DETAILS OF CHEQUE NO., AMOUNT AND DETAILS OF CASH RECEIPTS. ALL THESE DETAILS COULD NOT HAVE BEEN PREPARED IF IT WAS AFTE R THOUGHT AS ALLEGED BY THE LD. A.O. THE ASSESSEE HAD PROVIDED THE COPY OF HIS BOOKS OF ACCOUNT FOR PURCHASE OF BRICKS. IN REMAND REPORT ALSO THE LD. A.O. ONLY REJECTED THE EVIDENCE ON THE BASIS OF SUFFICIENT TIME HAD BEEN A LLOWED TO THE APPELLANT AT THE TIME OF ASSESSMENT BUT DID NOT HOLD EXPENSES WE RE BOGUS. HE FURTHER ARGUED THAT ASSESSEE HAD BONAFIDE REASONS FOR NOT S UBMITTING THIS EVIDENCE BEFORE THE A.O. AT THE TIME OF ASSESSMENT PROCEEDIN G THAT JAMNAGAR IS FAR AWAY FROM BARODA AND ZANKHAR IS A REMOTE AREA AND 4 40KM. FROM JAMNAGAR SITUATED AT DWARKA NATIONAL HIGHWAY. THE APPELLANT COULD NOT MAKE THEIR CONTRACT IMMEDIATELY DURING THE VERY SHORT SPAN OF TIME OF ABOUT 15 DAYS FROM 08.03.2006 TO 23.03.2006. AT THE TIME OF REMAND RE PORT, THE LD. A.O. HAD RECORDED THE STATEMENT ON OATH OF THREE BRICK SUPPL IERS AND THEY HAD ACCEPTED THE SUPPLY OF BRICKS AT SMPL CONTRACT AT V ADINAR DIST. JAMNAGAR. THEY HAD ACCEPTED THE PAYMENT HAD BEEN RECEIVED BY THE CHEQUE AND IN CASH FROM THE ASSESSEE. LD. A.O. HAD NOT COMMENTED ON ANY AFFIDAVITS FILED BY THE THREE BRICKS SUPPLIERS. THE ASSESSEE ALSO H AD VARIOUS EVIDENCES OF CONTRACT RECEIPTS CREDITED ON IOCL (SMPL), PROJECT OF VADINAR. HE FURTHER RELIED UPON VARIOUS CASE LAWS: I. RAJMOTI INDUSTRIES VS. INCOME TAX OFFICER , (199 5) 51 TTJ (AHD) 355 II. CIT VS. KUMARI SATYA SETIA, (1983) 143 ITR 486 (MP) III. MAHAVIR PRASAD GUPTA VS. JCIT (2006) 100 TTJ ( DEL) 1078 ITA NO. 3144/AHD/10 A.Y. 03-04 PAGE 9 IV. SIKANDER PUBLISHING (P) LTD. VS. DCIT (2003) 81 TTJ (DEL) 249. ACCORDINGLY, HE REQUESTED TO ALLOW TO FILE THE ADD ITIONAL EVIDENCE UNDER RULE 29. AT THE OUTSET, LD. SR. D.R. VEHEMENTLY OPPOSED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE ON THE GROUND THAT SEVERAL OP PORTUNITIES HAVE BEEN GIVEN BY THE LOWER AUTHORITIES. THE ASSESSEE WAS N ON CO-OPERAITVE WITH THEM. THE A.O. ISSUED NOTICE U/S. 133(6) AND THERE WAS NO RESPONSE FROM THE BRICKS SUPPLIER. THE ASSESSEE WAS ALSO GIVEN REASO NABLE OPPORTUNITY OF BEING HEARS ON THIS ISSUE AFTER NO RESPONSE FROM THE SUPP LIER BUT HE DID NOT RAISE ANY DIFFICULTY BEFORE THE A.O. FOR NOT PRODUCING TH ESE PERSONS. THUS, HE PRAYED TO CONFIRM THE ORDER OF THE CIT(A). 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD AND EVIDENCE ALSO. THE LD. A.O. GAVE TIME TO PRODU CE THESE PARTIES BEFORE HIM WITHIN 15 DAYS, IT IS TRUE THAT ASSESSEE DID NO T FILE ANY CONFIRMATION BEFORE THE A.O. AND ALSO REPLIED IN RESPONSE TO QUERY RAIS ED BY THE A.O. FOR TREATING THE BRICKS PURCHASE BOGUS. BUT AT THE TIME OF REMA ND REPORT, IT APPEARS THAT LD. A.O. RECORDED THE STATEMENT OF BRICK SUPPLIER A ND ASSESSEE HAD FILED THE CONFIRMATION, PAYMENTS WERE MADE THROUGH CHEQUE AS WELL AS CASH. THEREFORE, IN THE INTEREST OF JUSTICE, WE ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE US UNDER ITAT RULE 29. ACCORDI NGLY, WE DIRECT THE A.O. TO MAKE NECESSARY INQUIRY AS HE DEEMED FIT ON THIS ACCOUNT AND TAKE DECISION AS PER LAW. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) TO A.O. THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 10. THIRD GROUND OF APPEAL IS AGAINST RESTRICTING T HE DISALLOWANCE OF LABOUR CHARGES TO THE EXTENT OF RS.30,000/- OUT OF TOTAL D ISALLOWANCE OF RS.50,000/-. ITA NO. 3144/AHD/10 A.Y. 03-04 PAGE 10 THE ASSESSEE HAD DEBITED LABOUR CHARGES OF RS.59,38 ,958/-. IT INCLUDES PAYMENT FOR LABOUR CHARGES TO INDIVIDUAL LABOUR CON TRACTORS AS WELL AS DAILY LABOURERS AT THE RESPECTIVE SITES, WHERE THE WORK W AS GOING ON. THE PAYMENT OF LABOUR CHARGES HAD BEEN INCURRED BY CHEQUE AND I N CASH ALSO. THE CASH PAYMENT INCURRED THROUGH SELF-MADE VOUCHERS ARE NOT COMPARABLY VERIFIABLE. THEREFORE, HE DISALLOWED THE LUMP SUM AMOUNT OF RS. 50,000/- FOR WANT OF CHECK. 11. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT( A) WHO HAD PARTLY ALLOWED THE APPEAL AS UNDER: 7.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT AND FACTS OF THE CASE. ASSESSING OFFICER MADE LUMP-SUM DISAL LOWANCE OUT OF LABOUR CHARGES RS.50,000/-. SINCE PAYMENTS WERE MO STLY MADE IN CASH AND THROUGH SELF MADE VOUCHERS. AS NOTED BY T HE ASSESSING OFFICER SOME OF THE EXPENDITURE CLAIMED HAVE BEEN E XPENDED IN CASH AND ARE NOT VERIFIABLE. ON THE OTHER HAND IT IS ALSO A FACT THAT SOME EXPENDITURE IN CASH IN THIS LINE OF BUSINESS I S INEVITABLE. CONSIDERING THE FACT IN TOTALITY DISALLOWANCE IS RE STRICTED TO RS.30,000/-. 12. NOW ASSESSEE IS BEFORE US. LD. A.R. SUBMITTED THAT LABOURERS HAD BEEN EMPLOYED AT THE REMOTE SITE OF CONTRACT. THE LABOURERS ARE MOSTLY ILLITERATE PERSONS. HENCE, IT WAS NECESSARY TO PRE PARE THE SELF MADE CASH VOUCHERS. ALL THE EXPENSES HAD BEEN INCURRED FOR B USINESS PURPOSES. HE PRAYED TO ALLOW FULL EXPENSES. AT THE OUTSET, LD. SR. D.R. SUPPORTED THE ORDER OF THE CIT(A). WE HAVE CAREFULLY CONSIDERED THE OR DER OF THE LOWER AUTHORITES AND ARGUMENTS OF THE ASSESSEE. THE TOTAL LABOUR CH ARGES DEBITED BY THE ASSESSEE MORE THAN RS.59 LACS AND IT IS ADMITTED FA CT THAT THE CASH PAYMENTS ITA NO. 3144/AHD/10 A.Y. 03-04 PAGE 11 WERE MADE TO THE LABOURERS. THE LD. CIT(A) WAS REA SONABLE TO RESTRICT THE DISALLOWANCE AT RS.30,000/-. THEREFORE, WE DO NOT FIND ANY REASON TO INTERVENE IN THE ORDER OF THE CIT(A). ACCORDINGLY, WE CONFIRM THE ORDER OF THE CIT(A). 13. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20/12/2013 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA 1 1 1 1 ' '' ' )-2 )-2 )-2 )-2 320- 320- 320- 320- / COPY OF ORDER FORWARDED TO:- 1. %& / APPELLANT 2. )%& / RESPONDENT 3. - *7 / CONCERNED CIT 4. *7- / CIT (A) 5. 2; )-+ , , / DR, ITAT, AHMEDABAD 6. = >? / GUARD FILE. BY ORDER/ 1 , @/ B , $