M/s. Devi Diamonds, Surat V. The Income tax Officer,Ward-9(1), Surat

ITA 3203/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5982 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 30-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MEENA
• Keywords: Gross profit estimation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.3203 / AHD/2009 (ASSESSMENT YEAR 2006-07) M/S. DEVI DIAMONDS, 16, BHAVAN I CIRCLE, A.K. ROAD, SURAT VS. ITO, WARD 9(1), SURAT PAN/GIR NO. : AAEFD7831N (APPELLANT) .. (RESPONDENT) APPELLANT BY: NONE (WRITTEN SUBMISSION) RESPONDENT BY: SHRI S. K. MEENA, SR. DR O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORD ER OF LD. CIT(A) V, SURAT DATED 30.09.2009 FOR THE ASSESSMENT YEAR 2006 -07. 2. ONLY ONE EFFECTIVE GROUND HAS BEEN RAISED BY THE ASSESSEE WHICH READS AS UNDER: THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.4,19,750/- MADE BY A.O. BY DISALLOWING SALARY & LABOUR EXPENSES AT 50% ON AD-H OC BASIS WITHOUT POINTING OUT ANY DEFECTS IN THE WAGS REGISTERS AND SALARY REGISTERS. THE ADDITION OF RS.4,19,750/- SHOULD BE DELETED. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE A PPOINTED DATE OF HEARING BUT A WRITTEN SUBMISSION DATED 18.07.2011 I S AVAILABLE ON RECORD AS PER WHICH IT IS REQUESTED BY THE LD. A.R. OF THE AS SESSEE THAT THE MATTER MAY I.T.A.NO. /AHD/200 2 BE DECIDED AFTER CONSIDERING THE WRITTEN SUBMISSION S. ALONG WITH THE WRITTEN SUBMISSION, THE ASSESSEE HAS FURNISHED A COPY OF TH E TRIBUNAL ORDER RENDERED IN THE CASE OF GHANSHYAM DIAMOND VS ITO IN I.T.A. NO. 3205/AHD/2009 DATED 31.08.2010 AND ANOTHER ORDER OF THE TRIBUNAL IN THE CASE OF NBA DIAMOND MFG. CO. VS ACIT IN I.T.A. NO. 4056/AHD/200 7 DATED 02.07.2010. IT WAS SUBMITTED BY THE LD. A.R. IN THE WRITTEN SUB MISSION DATED 18.07.2011 THAT IN THESE TWO TRIBUNAL ORDERS, THE TRIBUNAL HAS DELETED THE AD-HOC DISALLOWANCE OF PAYMENT OF SALARY AND WAGES AND HEN CE, IN THE PRESENT CASE ALSO, SUCH DISALLOWANCE OUT OF SALARY TO THE EXTENT OF 50% SHOULD BE DELETED. 4. LD. D.R. OF THE REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. IT IS ALSO SUBMITTED BY HIM THAT THE FACTS IN THE PRES ENT CASE ARE DIFFERENT THAN THE FACTS IN THESE TWO CASES FOR WHICH TRIBUNAL DEC ISIONS ARE RELIED UPON AND HENCE, THESE TWO TRIBUNAL DECISIONS ARE NOT APPLICA BLE IN THE PRESENT CASE. 5. WE HAVE CONSIDERED THE WRITTEN SUBMISSIONS OF T HE LD. A.R. OF THE ASSESSEE AND THE SUBMISSIONS OF LD. D.R. OF THE REV ENUE AND PERUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND THE TRIBUNAL DECISIONS CITED BY THE LD. A.R. IN HIS WRITTEN SUBMISSIONS. WE FIND THAT IN THE PRESENT CASE, THE A.O. ASKED TH E ASSESSEE TO FURNISH COMPLETE DETAILS ALONG WITH NAMES AND ADDRESS OF TH E EMPLOYEES AS WELL AS NATURE OF WORK DONE BY THOSE PERSONS. BUT NO SUCH DETAILS WERE FURNISHED BY THE ASSESSEE AND THE ASSESSEE FURNISHED ONLY THE LE DGER ACCOUNT COPY. IN THE PAPER BOOK FILED BY THE ASSESSEE ALONG WITH THE WRI TTEN SUBMISSION OF THE LD. A.R., A COPY OF THE SALARY SHEET HAS BEEN SUBMITTED BY THE ASSESSEE BUT THE SAME ALSO DOES NOT CONTAIN THE ADDRESS OF THE EMPLO YEES OR THE NATURE OF THE WORK BEING DONE BY THEM. IN THE LIGHT OF THESE FAC TS, NOW WE CONSIDER THE APPLICABILITY OF TWO TRIBUNAL DECISIONS CITED BY TH E LD. A.R. IN HIS WRITTEN SUBMISSION; 6. THE FIRST DECISION IS IN THE CASE OF GHANSHYAM D IAMOND (SUPRA). IN THAT CASE, THE DISPUTE WAS REGARDING DISALLOWANCE O N ACCOUNT OF LABOUR I.T.A.NO. /AHD/200 3 PAYMENT FOR DOING JOB WORK AND NOT OUT OF STAFF SAL ARY. IN THE PRESENT CASE ALSO, THE ASSESSEE IS CLAIMING PAYMENT OF LABOUR EX PENSES I.E. KARIGAR MAJOORI OF RS.43.70 LACS IN ADDITION TO DEDUCTION O N ACCOUNT OF SALARY PAYMENT OF RS.8,30,500/-. NO DISALLOWANCE WAS MADE BY THE A.O. OUT OF THIS PAYMENT OF RS.113.70 LACS ON ACCOUNT OF KARIGA R MAJOORI EXPENSES AND HENCE, THIS TRIBUNAL DECISION IS NOT APPLICABLE IN THE PRESENT CASE FOR DECIDING THE ISSUE ABOUT ALLOWABILITY OF PART SALARY EXPENSE BECAUSE THERE WAS NO DISALLOWANCE OF SALARY EXPENSE IN THAT CASE. 7. IN THE 2 ND CASE I.E. IN THE CASE OF NBA DIAMOND (SUPRA), THEE WAS NO SPECIFIC DISALLOWANCE BUT THE GP WAS ESTIMATED BY T HE A.O. @ 6% AND THE TRIBUNAL CONFIRMED THE GP ESTIMATION @ 3% OF GROSS RECEIPTS. SINCE, IN THE PRESENT CASE, NO GP ADDITION IS THERE, THIS TRIBUNA L DECISION IS ALSO OF NO HELP TO THE ASSESSEE. 8. SINCE IN THE PRESENT CASE, THE ASSESSEE HAS NOT FURNISHED THE REQUIRED DETAILS I.E. ADDRESSES OF THE STAFF MEMBERS AS WELL AS DETAILS OF JOB DONE BY THEM, WE FEEL THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A) AS PER WHICH HE HAS CONFIRMED THE ACTION OF THE A.O. O F DISALLOWING PART OF SALARY EXPENSES FOR WHICH NECESSARY DETAILS WERE NO T FURNISHED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW OR BEFORE US. HENCE, THIS GROUND OF APPEAL IS REJECTED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JULY, 2011. SD./- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED : 29 TH JULY, 2011 SP I.T.A.NO. /AHD/200 4 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE 1. DATE OF DICTATION 21/7 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 25/7 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 27/7 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 29/7 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 29/7 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 29/7/11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..