Appeal details
Counselvise Citation
32323914 RSA 2012
Assessee PAN
Bench
Appeal Number
Duration Of Justice
9 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-05-2013
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
DB
Assessment Year
2006-2007
Appeal Filed On
16-07-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO.190/NAG/2012 ASSESSMENT YEAR: 2006-2007 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-8, NAGPUR, 5 TH FLOOR, AMBEDKAR BHAVAN, SEMINARY HILLS, NAGPUR-44006 VS SHRI MORESHWAR B. DHOBLE, WARD NO.28, BUDHWAR BAZAR, NEAR NATARAJ TALKIES, MAHAL, NAGPUR 440 002. PAN: AALPD 3162 L (APPELLANT) (RESPONDENT) I.T.A. NO.323/NAG/2012 ASSESSMENT YEAR: 2006-2007 SHRI MORESHWAR B. DHOBLE, WARD NO.28, BUDHWAR BAZAR, NEAR NATARAJ TALKIES, MAHAL, NAGPUR 440 002. PAN: AALPD 3162 L VS ASST. COMMISSIONER OF INCOME TAX, CIRCLE-8, NAGPUR, 5 TH FLOOR, AMBEDKAR BHAVAN, SEMINARY HILLS, NAGPUR-44006 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.J. THAKAR & MR. S.C. THAKAR REVENUE BY : SHRI PRAKASH MANE, JCIT DATE OF HEARING: 8.3.2013 DATE OF ORDER: 1.5.2013 O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION. IN THES E TWO APPEALS, ONE APPEAL IS FILED BY THE REVENUE VIDE ITA NO.190/NAG/2012 AN D THE OTHER APPEAL IS FILED BY THE ASSESSEE VIDE ITA NO. 323/NAG/2012. FOR THE SA KE OF CONVENIENCE, BOTH THE APPEALS ARE BEING ADJUDICATED IN THIS COMMON ORDER. 2. FIRSTLY, WE SHALL TAKE UP ITA NO.190/NAG/2012, W HICH IS FILED BY THE REVENUE ON 25.5.2012 AGAINST THE ORDER OF CIT (A)-II, NAGPUR DATED 11.1.2012 FOR THE ASSESSMENT YEAR 2006-2007. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD CIT (A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 8,00,000/ - MADE U/S 40(A)(IA) OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, CIT (A) HAS ERRED IN DELETING THE ADDITIONS OF RS. 4,40,000/- MADE ON ACCOUNT OF BOGUS LIABILITY WITHOUT CITING ANY REASON. 3. ON THE FACTS CIT (A) ERRED IN ESTIMATING THE NET INCOME @ 8% OF GROSS RECEIPTS IGNORING THE HIRE CHARGES OF RS. 95, 000/- CREDITED IN THE PROFIT & LOSS ACCOUNT. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE TH AT THE ASSESSEE IS A CIVIL CONTRACTOR AND REGISTERED THE TURNOVER OF RS. 1,49, 78,942/-. ASSESSEE FILED THE RETURN DECLARING THE INCOME OF RS. 10,63,040/- AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT, DETERMINING THE TOTAL INCOME AT RS. 24,21,540/-. DURING THE ASSESSMENT PROCEEDINGS, AO MADE CERTAIN ADDITIONS I E (I) RS. 8,00,000/- ON ACCOUNT OF BOGUS LABOUR CHARGES PAID TO SHRI SHRIKANT GHATE ; (II) DISALLOWANCE OF RS. 4,40,000/- ON ACCOUNT OF NON-GENUINE CLAIM OF WAGES CHARGES PAYABLE AND (III) RS. 1,18,500/- ON ACCOUNT OF DIFFERENCE OF ACCOUNTS WIT H SHRI SHRIKANT GHATE. AGGRIEVED WITH THE SAME, ASSESSEE FILED AN APPEAL BEFORE THE CIT (A). 4. DURING THE FIRST APPELLATE PROCEEDINGS, CIT (A) EXAMINED THAT RS. 8 LACS WAS ADDED ON ACCOUNT OF BOGUS LABOUR CHARGES PAID TO SH RI SHRIKANT GHATE UNFAIRLY, AS THE AMOUNT ACTUALLY WAS MADE FOR THE LABOUR TO THE DISTRIBUTOR OF THE MONEY TO THE LABOUR. CIT (A) FOUND NO MISTAKE TO THE EXTENT OF R S. 7 LACS IN THIS REGARD. HE ALSO FOUND THAT AO ADDED A SUM OF RS. 4.4 LACS AS OUTSTA NDING LABOUR PAYMENT AND FOR THE SAME NO RELEVANT BILLS OR VOUCHERS WERE AVAILAB LE. CONSIDERING THE DEFICIENCIES, CIT (A) ESTIMATED THE NET PROFITS ON THE SAID TURNO VER OF RS. 1,49,78,942/- BY APPLYING THE NET PROFIT @ 8% AND THE ADDITION WAS D ETERMINED AT RS. 11,98,315/- AGAINST THE SUM OF RS. 9,25,221/- AS DECLARED BY TH E ASSESSEE IN THE RETURN OF INCOME. CIT (A) CONFIRMED THE ADDITION TO THE EXTEN T OF RS. 2,12,034/-, THE DIFFERENCE BETWEEN (RS.11,98,315 - RS. 9,85,281). WITH REGARD TO THE DIFFERENCE OF RS. L LAC IE DIFFERENCE BETWEEN RS. 8 LACS AND RS. 7 LACS, CIT (A) HELD THAT THE SAME CONSTITUTES INCOME OF HIS BROTHER-IN-LAW, WHICH IS TAXABLE IN HIS HANDS. THUS, THE CIT (A) DEVIATED FROM THE ISSUE BASED ADDITIONS TO THE AD-HOC ESTIMATIONS, APPLYING 3 THE NET PROFIT RATE @ 8%. AGGRIEVED WITH THE ABOVE MANNER OF ADJUDICATION, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. DURING THE E-COURT PROCEEDINGS BEFORE US, LD REP RESENTATIVES OF BOTH THE PARTIES RELIED ON THE ORDERS OF THE REVENUE AUTHOR ITIES AS THE CASE MAY BE. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORDE RS OF THE REVENUE AUTHORITIES AND PARA 4 AND 4.1 OF THE CIT (A)S ORD ER IN PARTICULAR. WE HAVE ALSO EXAMINED THE SUBMISSIONS OF THE ASSESSEE THAT ARE R EPRODUCED IN PARA 3.1 OF THE IMPUGNED ORDER. FROM THE PERUSAL OF THESE PORTIONS , WE FIND THAT THE ASSESSEE HAS IMPLICITLY CONCEDED FOR APPLYING THE NET PROFIT RAT E @ 8% ON THE TURNOVER OF RS. 1.5 CR (ROUNDED OFF) INSTEAD OF ISSUE BASED ADDITIONS. ASSESSEE ALSO FILED AN AFFIDAVIT CONFIRMING THE SAID PAYMENT MADE TO SHRI SHRIKANT G HATE WHICH IS AIMED AT DISBURSEMENT OF LABOUR CHARGES OF THE PAYMENT. THE DETAILS OF THE BANK ACCOUNT AND THE MANNER OF WITHDRAWAL OF THE MONEY FROM THE ACCOUNTS WERE ALSO NARRATED. WE HAVE ALSO EXAMINED THE REASONING GIVEN BY THE CI T (A) BEFORE DOING AWAY WITH THE ISSUE BASED ADDITIONS AND DECIDING THE AD-HOC E STIMATIONS, CONSIDERING THE INCOMPLETENESS OF THE BOOKS OF ACCOUNT OF THE ASSES SEE. FOR THE SAKE OF COMPLETENESS OF THE ORDER, THE SAID PARAS 4 AND 4.1 ARE REPRODUCED HERE UNDER: 4.0 GROUND NOS. 1 & 2 ARE TAKEN TOGETHER AS THEY PERTAIN TO LABOUR PAYMENT MADE BY THE APPELLANT. A.O. FOUND TH AT RS. 5,00,000 + RS. 2,00,000 + RS. 1,00,000 WAS GIVEN BY THE APPELLANT TO HIS BROTHER-IN-LAW FOR PAYMENT OF LABOUR. WHEN A.O. RECORDED THE STATEMENT OF HIS BROTHER-IN-LAW MR. SHRIKANT CHANDRAKANT GHATE, HE DENIED RAISING A NY BILL TO APPELLANT AND A.O. ADDED IT AS BOGUS LABOUR PAYMENT. A.O. AGAIN A DDED RS. 4,40,000/- OUTSTANDING LABOUR PAYMENT AS BOGUS LIABILITY AS AP PELLANT DID NOT PRODUCE THE RELEVANT BILLS AND VOUCHERS BEFORE A.O. 4.1 IT IS SEEN APPELLANT HAS CARRIED OUT CIVIL CON TRACT FOR A TURNOVER OF RS. 1,49,78,942/- AND THE PAYMENT TO LABOUR IS R EQUIRED TO BE MADE AND HENCE THE APPELLANT CANNOT BE SAID TO HAVE NOT MADE LABOUR PAYMENT ONLY THING IS THAT AS HE WAS NOT AVAILABLE AT SITE ALL T HE TIME SO HE GAVE RS. 7 LAKH TO HIS BROTHER-IN-LAW BY CHEQUE TO MAKE PAYMENT ON HIS BEHALF. HENCE, TO THAT EXTENT APPELLANTS CLAIM IS ACCEPTABLE BUT IT IS AL SO TRUE THAT APPELLANT HAS NOT PRODUCED ALL THE BILLS AND VOUCHERS FOR VERIFICATIO N BEFORE A.O. FOR LABOUR PAYMENT MADE OR OUTSTANDING AT THE CLOSE OF YEAR I. E. RS. 4,40,000/-, NOR P.F., ESIC DETAILS WERE PRODUCED BEFORE A.O. OR BEF ORE ME. EVEN THE NET PROFIT DECLARED BY THE APPELLANT IS ON LOWER SIDE, HOWEVER , IN FACTS AND CIRCUMSTANCES OF THE CASE, IT WILL MEET THE END OF JUSTICE TO ESTIMATE THE NET PROFIT OF APPELLANT @ 8% AND APPELLANTS INCOME FRO M CIVIL CONTRACT WILL COME 4 TO RS. 11,98,315/- AS AGAINST RS. 9,25,221/- DECLAR ED BY THE APPELLANT. AS APPELLANTS BOOKS OF ACCOUNT HAVE FOUND TO BE DEFEC TIVE AND APPELLANT DID NOT PRODUCE THE RELEVANT BILLS AND VOUCHERS BEFORE A.O. NOR BEFORE ME. HENCE ADDITION TO APPELLANTS INCOME TO THE EXTENT OF RS. 2,12,034/- (RS. 11,98,315 RS. 9,85,281) TO WHICH EVEN APPELLANT HAS HINTED IN HIS SUBMISSIONS IS SUSTAINED. BALANCE CASE OF RS. 1 LAKH SAID TO BE PA ID TO BROTHER-IN-LAW IS TREATED AS HIS INCOME AS HE HAD SHOWN RS. 1 LAKH AS LOAN LIABILITY FROM APPELLANT IN HIS RETURN WHEREAS APPELLANT HAS SHOWI NG IT AS LABOUR PAYMENT. IT APPEARS THAT APPELLANT IS TRYING TO COMPENSATE HIS BROTHER-IN-LAW IN CASH AND HENCE RS. 1 LAKH IS CONSIDERED IN HAND OF BROTHER-I N-LAW. 7. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THA T THE ORDER OF CIT (A) DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND S RAISED BY REVENUE ARE DISMISSED. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED . ITA NO.323/NAG/2012 9. APPEAL ITA NO.323/NAG/2012, WHICH IS FILED BY TH E ASSESSEE FOR THE AY 2006- 07 IS CONSEQUENTIAL TO THAT OF THE REVENUES APPEAL ADJUDICATED BY US IN THE ABOVE PARAGRAPHS OF THIS ORDER AND ITS ADJUDICATION IS ME RE AN ACADEMIC EXERCISE. THEREFORE, THIS APPEAL FILED BY THE ASSESSEE IS DIS MISSED AS ACADEMIC . 10. IN THE RESULT, BOTH APPEALS FILED BY THE REVENUE AS WELL AS THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 01.05.2013. SD/- SD/- (R.K. GUPTA) (D. KARUNAKAR A RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : .2013 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR NAGPUR, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// 5 BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI
