ACIT, Aluva V. M/s.KIP Construction Co., Muvattupuzha

ITA 353/COCH/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7613 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2016
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 09-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 18-07-2014
• Court: TRIBUNAL
• Keywords: Depreciation; Corroborative evidences
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEOR GE K., JM I.T.A. NO. 353/ COCH/ 2014 ASSESSMENT YEAR : 200 9 - 10 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, ALUVA. VS. M/S. KIP CONSTRUCTION COMPANY, KAVIKUNNEL, KUNNACKAL P.O., MUVATTUPUZHA-682 316. [PAN: AACFK 5482G] ( REVENUE - APPELLANT) ( ASSESSEE - RESPONDENT) REVENUE BY S HRI A. DHANARAJ, SR. DR ASSESSEE B Y SHRI MATHEW JOSEPH, CA DATE OF HEARING 09 / 1 1 /201 6 DATE OF PRONOUNCEMENT 17 / 1 1 /201 6 O R D E R PER B.P.JAIN, ACCOUNTANT MEMBER: THIS APPEAL WAS POSTED FOR HEARING AND WAS DECIDED BY THIS BENCH IN FAVOUR OF THE REVENUE VIDE ORDER DATED 16/11/2015 A GAINST WHICH THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE HON. HI GH COURT OF KERALA. THE HIGH COURT VIDE ORDER DATED 6 TH OCTOBER, 2016 HAS RESTORED THE APPEAL BACK TO THE TRIBUNAL FOR RECONSIDERING THE MATTER W ITH A DIRECTION TO THE ASSESSEE TO PAY THE REVENUE AN AMOUNT OF RS.50,000/ - TOWARDS COST. THE ASSESSEE HAS ALREADY PAID THIS AMOUNT AND PRODUCED THE CHALLAN BEFORE THIS BENCH. I.T.A. NO.353/COCH/2014 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APP EALS)-II, KOCHI IN I.T.A. 18/ALY/CIT(A)-II/2011-12 DATED 18/03/2014 I S OPPOSED TO LAW, FACTS AND EVIDENCES OF THE CASE. 2. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S ERRED IN RESTRICTING THE DISALLOWANCE TO A MEAGER 1% OF TOTA L EXPENSES INSTEAD OF 10% MADE ON ACCOUNT OF INFLATION OF EXPE NSES RELATING TO EARTH WORK, EXCAVATION, FILLING AND LEVELING. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FOLLOWING FACTS WHILE DECIDING THE ISSUE: (I) THE ASSESSEE HAS NOT PRODUCED ANY PROPER SUPPOR TING EVIDENCES EXCEPT THE SELF MADE VOUCHERS WHICH DO NO T HAVE THE NAMES AND ADDRESSES OF THE PAYEE. (II) THE MUSTER ROLL RELIED ON BY THE LD. CIT(A) HA D NOT BEEN PRODUCED BEFORE THE ASSESSING OFFICER. 3. THE LD. CIT(A) ERRED IN DELETING THE DISALLOWA NCE OF RS.1,72,696/- MADE U/S. 40(A)(IA). THE LD. CIT(A) HAS ALLOWED THE ASSESSEES CLAIM WITHOUT CONSIDERING THE FOLLOWING FACTS:- (I) THE DECISION OF THE HONBLE APEX COURT IN THE C ASE OF HINDUSTAN COCOA COLA PVT. LTD. IS NOT RELEVANT IN T HIS CASE AS THE SAME WAS RENDERED UNDER THE PROVISION OF SEC.201. (II) NO CERTIFICATE U/S. 197 WAS PRODUCED BEFORE T HE ASSESSING OFFICER AND, THEREFORE, THERE IS VIOLATION OF RULE 46A(3). 4. THE LD. CIT(A) ERRED IN DELETING THE ADDITI ON OF RS.45,37,820/- MADE UNDER SECTION 40A(IA) AS DECISION OF THE LD. C IT(A) WAS ONLY BASED ON THE SUBMISSION MADE BY THE ASSESSEE BEFORE HER AND THE SAME IS CONTRARY TO THE STAND TAKEN BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. ALSO, THE LD. CIT(A) OUGHT TO H AVE CONSIDERED FOLLOWING FACT WHILE DECIDING THE ISSUE:- (I) THE MUSTER ROLL SAID TO HAVE BEEN PRODUCED BEF ORE THE ASSESSING OFFICER HAD ACTUALLY NOT BEEN PRODUCED B Y THE I.T.A. NO.353/COCH/2014 3 ASSESSEE BEFORE THE ASSESSING OFFICER AND NO SUCH ARGUMENT WAS RAISED DURING THE COURSE OF ASSESSMENT PROCEED INGS. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE ORDER OF THE COMM ISSIONER OF INCOME TAX (APPEALS) MAY BE SET ASIDE AND THAT OF T HE ASSESSING OFFICER RESTORED. 3. GROUND NO. 1 & 5 ARE GENERAL IN NATURE AND D O NOT REQUIRE ADJUDICATION. 4. AS REGARDS GROUND NO. 2, THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER AT PGS. 1&2 ARE REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE:- 2. THE ASSESSEES TOTAL CONTRACT RECEIPT DURING T HE RELEVANT ACCOUNTING PERIOD WAS RS. 14,07,56,468/- OUT OF WHI CH RS.28,75,425/- WAS THE VALUE OF MATERIALS SUPPLIED BY THE CONTRACTEE DEPARTMENTS. THE CLOSING WORK IN PROGRES S DISCLOSED IS 2,80,10,000. ON EXAMINATION OF ACCOUNTS, IT WAS FO UND THAT THE EXPENSE DEBITED UNDER THE HEADS EARTH WORK, EARTH WOR K EXCAVATION, EARTH WORK FILLING AND EARTH WORK LEVELL ING AMOUNTS OF RS.8,84,480/-, RS.1,87,07,400/-, RS.1,85,63,750/- A ND RS.1,16,12,610/-. THE ENTIRE PAYMENTS ARE CASH PAY MENTS,. ASSESSEE DID NOT PRODUCE ANY EVIDENCE IN SUPPORT OF INCURRING SUCH EXPENDITURE AND ALSO ASSESSEE WAS NOT ABLE TO DIFFE RENTIATE THE NATURE OF WORK UNDER EACH HEAD. IN THE ABSENCE OF ANY SORT OF EVIDENCE, SUCH AS, PAYMENT VOUCHERS, OR NARRATION I N THE BOOKS PRODUCED, NAMES AND ADDRESSES OF THE PERSONS TO WH OM THE AMOUNT WAS PAID, IT IS DIFFICULT TO EXAMINE AND VER IFY THE CORRECTNESS AND TO ACCEPT THE CORRECTNESS OF INCURR ING SUCH EXPENDITURE. IT IS THE PRIMARY DUTY OF THE ASSESSE E TO SUBSTANTIATE SUCH CLAIMS, IT IS TRUE THAT ASSESSEE HAS TO INCUR EXPENSES TO CARRY OUT THEIR WORK. BUT THE VOLUME OF THE EXPENDITURE IS TOO LARGE AND ASSESSEE IS QUITE INDIFFERENT IN RESPECT OF THE REQ UIRED EVIDENCE. IT IS LIKELY AND ALMOST CERTAIN THAT THE EXPENSES CLAI MED ARE INFLATED. I.T.A. NO.353/COCH/2014 4 IN ORDER TO BRING THE PROBABLE INCOME THAT ESCAPED ASSESSMENT A PART OF THE AMOUNT, OUT OF THE EXPENDITURE CLAIMED UNDER THESE HEADS ARE TO BE DISALLOWED. 3. ASSESSEES NET BUSINESS PROFIT DISCLOSED IS O NLY 5.4%, I.E.,., (7605433/140756468*100 = 5.4), WHICH IS VERY LOW. THE EXPECTED RESULT IN SIMILAR CIVIL CONTRACT WORKS IS BETWEEN 8% AND 10% OF THE CONTRACT RECEIPT. THE PROFIT EXPECTED A S PER THE PROVISIONS U/S. 44AD IS ALSO 8%. IN THE CASES WHERE ACCOUNTS ARE AUDITED ASSESSEE IS SUPPOSED TO PROVE THE ACTUAL EX PENDITURE INCURRED, BY WAY OF PROPER EVIDENCES SUCH AS VOUCHERS EXHIBITING CORRECT ADDRESS OF THE PAYEE, NATURE OF WORK EXECUTED ETC. IN THE CASE OF THE ASSESSEE, THEY HAVE NOT PRODUCED ANY SUCH EVIDENCES. CONSIDERING THESE FAC TS, PART OF THE EXPENDITURE CLAIMED WITHOUT ANY SUPPORTING EVIDENCE S, UNDER THE ABOVE HEADS, ARE DISALLOWED BEING UNEXPLAINED EXPEN DITURE. ACCORDINGLY, 10% OF THE EXPENSE CLAIMED UNDER EARTH WORK, EARTH WORK EXCAVATION, EARTH WORK FILLING AND EARTH WORK LEVELING ARE DISALLOWED. THE ADDITION SO MADE BEING EXPENSES NO T SUPPORTED BY EVIDENCE IS WORKED OUT AT RS.49,77,024/-. THE P ERCENTAGE OF PROFIT AFTER INCLUDING THE DISALLOWANCE WILL WORK O UT TO 8.93% WHICH IS QUITE REASONABLE. 5. THE LD. CIT(A) HAS DELETED THE ADDITION MA DE BY THE ASSESSING OFFICER AND THE RELEVANT FINDINGS OF THE LD. CIT(A) ARE REPRODUCED HEREIN BELOW FOR THE SAKE OF CONVENIENCE: 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND T HE SUBMISSIONS OF THE ASSESSEE. THE ASSESSEE HAS FURN ISHED MONTH WISE DETAILS OF EARTH WORK, LEVELLING AND FILLING. HE HAS ALSO FILED WEEKLY MUSTER ROLLS DULY SIGNED BY THE LABOURERS AN D CORRESPONDING INTERNAL VOUCHERS MADE FOR THE PAYMENTS TO THESE LA BOURERS. IT WAS ACCEPTED BY THE APPELLANT THAT THE COMPLETE NAMES A ND ADDRESSES OF SUCH DAILY LABOURS WERE NOT MAINTAINED BY THE AS SESSEE, BUT IT SUBMITTED THAT IT IS NOT PRACTICALLY POSSIBLE IN EN GAGING LABOUR ON A DAILY BASIS. SINCE ALL THESE DETAILS WERE MAINTAINE D AND WERE ALSO FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ADDITI ON ON ESTIMATED EXPENDITURE ON THIS ACCOUNT. THE ASSESSEE HAS FURTH ER SUBMITTED COPY OF SAMPLE BANK ACCOUNT SHOWING THAT REGULAR CA SH I.T.A. NO.353/COCH/2014 5 WITHDRAWALS FROM THE BANK ARE MADE FOR MAKING SUCH PAYMENTS AND IN SUPPORT OF THIS DAILY CASH BOOK ALONG WITH I NTERNAL CASH VOUCHERS MADE WHERE SUCH AMOUNTS ARE SHOWN TO BE DI SBURSED ON WEEKLY BASIS FOR PAYMENT TO THESE DAILY WAGERS WAS ALSO FILED. IT IS SEEN THAT ALL THESE DETAILS I.E. MUSTER ROLLS AND V OUCHERS WERE FILED BEFORE THE ASSESSING OFFICER TO SHOW THAT ALL THE E XPENDITURE IS GENUINELY MADE BY EMPLOYING SITE OFFICERS TO MAKE S UCH PAYMENTS ON WEEKLY BASIS. IN VIEW OF THESE MUSTER ROLLS AND INTERNAL VOUCHERS IT IS CORRECT THAT THE ASSESSING OFFICER H AS NOT BROUGHT OUT ANY DEFINITE STATEMENT AS TO HOW THIS EXPENDITURE H AS NOT BEEN MADE BY THE ASSESSEE. HOWEVER, AS THE NAMES AND AD DRESSES OF VARIOUS PERSONS TO WHOM THESE PAYMENTS HAVE BEEN MA DE HAVE NOT BEEN MAINTAINED BY THE ASSESSEE, THE ESTIMATED PERCENTAGE OF EXPENDITURE MADE ON THIS ACCOUNT IS RESTRICTED TO 1 % OF THE EXPENDITURE. ACCORDINGLY, THE ADDITION OF RS.48,77,024/- MADE BY THE ASSESSING OFFICER IS REDUCED TO RS.4,97 ,700/-. BALANCE ADDITION OF RS.44,79,324/- IS HEREBY DELETE D. 6. THE LD. DR ARGUED THAT THE PAYMENTS FOR EARTH WORK RELATING TO EARTH WORK EXCAVATION, EARTH WORK FILLING AND EARTH WORK L EVELLING AMOUNTING TO RS.8,84,480/-, RS.1,87,07,400/-, RS.1,85,63,750/- A ND RS.1,16,12,610/- RESPECTIVELY WERE ENTIRELY MADE IN CASH AND THE ASS ESSEE DID NOT PRODUCE ANY EVIDENCE IN SUPPORT OF INCURRING OF SUCH EXPENDITUR E AND THE ASSESSEE WAS NOT ABLE TO DIFFERENTIATE THE NATURE OF WORK UNDER EACH HEAD. FURNISHING OF MONTH-WISE STATEMENT WITH REGARD TO SUCH EXPENSES B EFORE THE LD. CIT(A) DOES NOT TANTAMOUNT TO THE EVIDENCE OF INCURRING OF SUCH EXPENDITURE BY THE ASSESSEE. THE CASH WITHDRAWN FROM THE BANK HAS BEE N USED FOR MAKING LABOUR PAYMENTS DOES NOT SUBSTANTIATE THE CLAIM THAT THE CASH HAS B EEN PAID TO THE LABOURERS OF THE ASSESSEE. IN THE CIRCUMSTA NCES AND FACTS OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO 1% INSTEAD OF 10% DISALLOWANCE MADE BY THE ASSESSING OFFICER. TH E ASSESSING OFFICER HAS I.T.A. NO.353/COCH/2014 6 WORKED OUT THE NET PROFIT RATE AT 8.93% WHICH IS QU ITE REASONABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, ARGUED THAT THE WITHDRAWALS HAVE BEEN MADE FROM THE BANK AND THE PA YMENTS HAVE BEEN MADE TO THE LABOURERS. 8. THE LD. COUNSEL FOR THE ASSESSEE FURTHER ARGUED THAT THE BOOKS OF ACCOUNTS, MUSTER ROLL, PAYMENT VOUCHERS ETC. WERE PRODUCED BE FORE THE ASSESSING OFFICER AT THE TIME OF HEARING AND THE ASSESSING OFFICER HA S PICKED UP CERTAIN VOUCHERS AND HAS NOT CARED TO VERIFY THE SUPPORTING MUSTER R OLLS FOR WAGE PAYMENTS AND ALSO THE CASH BOOK AND LEDGER EVIDENCING THESE PAYM ENTS. THE LEARNED AR IN HIS WRITTEN SUBMISSION HAS STATED THE FOLLOWING: 1. DISALLOWANCE OF 10% ON ESTIMATE BASIS RS.49,77,024/ - (A) THE ASSESSING OFFICER HAS DISALLOWED 10% OF THE EXP ENSES ON ACCOUNT OF EARTH WORK, EXCAVATION, FILLING AND LEVELING ALLEGI NG THAT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE. (B) THE ASSESSEE PRODUCED ALL THE DETAILS CALLED FOR VI DE THE NOTICE DATED 21/10/2011 ON THE HEARING DATE 2/11/2011. AS PER T HE NOTICE ALL THE SUPPORTING VOUCHERS WERE PRODUCED BEFORE THE ASSESS ING AUTHORITY. I.T.A. NO.353/COCH/2014 7 THERE WAS NO SPECIFIC REQUEST BY THE ASSESSING OFFI CER TO PRODUCE THE MUSTER ROLL. ALL THE SUPPORTING DOCUMENTS INCLUDIN G THE MUSTER ROLLS WERE BROUGHT TO THE ASSESSING OFFICER ON THE HEARIN G DATE. THE ASSESSING OFFICER HAS NOT ASKED ANY FURTHER DETAILS REGARDING THIS AND HAS NOT GIVEN ANY PROPOSAL OR INDICATION ABOUT THE PROPOSED HUGE DISALLOWANCE. (C) THE ASSESSING OFFICER IN PAGE 3 OF THE ORDER ACKNO WLEDGES THAT THE ASSESSEE IS MAINTAINING VOUCHERS. (D) THE CONTRACT WORK WAS EXECUTED IN THE REMOTE HILLY TERRAIN OF THE HIGH RANGE DISTRICT OF IDUKKI. THE WEEKLY WAGES ARE PAI D IN CASH TO THE LEADER OR MOOPAN ACCORDING TO HIS CLAIM WHO IN TURN WILL DISTRIBUTE AMONG THE WORKERS. THERE ARE NO BANKING FACILITIES NEARBY AND CHEQUES ARE NOT ACCEPTABLE TO THE WORKERS AS MOST OF THEM H AVE NO BANK ACCOUNTS AND THEY HAVE TO SPENT ADDITIONAL TIME AND MONEY TO ENCASH THE CHEQUES. (E) THE ENTIRE EXPENDITURE IS ACCOUNTED WITH SUPPORTING DOCUMENTS AND THE DISALLOWANCE OF 10% WAS MADE WITHOUT CONSIDERING TH E FACTS AND CIRCUMSTANCES OF THE CASE. THERE IS NO CLEAR FINDI NG BY THE ASSESSING OFFICER THAT THE EXPENSES ARE INFLATED. THE ASSESSI NG OFFICER MADE THE I.T.A. NO.353/COCH/2014 8 DISALLOWANCE STATING THAT IT IS LIKELY AND ALMOST CERTAIN THAT THE EXPENSES CLAIMED ARE INFLATED. ANY DISALLOWANCE MADE SHOULD BE WITH VALID REASONS AND SIMPLY DISALLOWING A HUGE AMOUNT IS AGAINST LAW ANDS FACTS. 2. DETAILS OF GROSS PROFIT CONTRACT RECEIPTS (NET OF MATERIALS) 13,78,81,043 PROFIT BEFORE DEPRECIATION AND INTEREST ON CAPITAL 1,16,95,998 PROFIT PERCENTAGE 1,16,95,998/137881043 = 8.48% COPY OF THE PROFIT & LOSS ACCOUNT IS PLACED ON RECO RD. THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE EMPLOYE ES HUGE MACHINERIES FOR THE WORK AND THE DEPRECIATION CLAIMED AS PER TH E INCOME TAX RULES IS RS.32,30,565/-. AFTER CONSIDERING THIS AND THE INTE REST PAID TO PARTNERS RS.8,60,000/- THE NET PROFIT IS 8.48% WHICH IS VERY REASONABLE CONSIDERING THE NATURE OF THE WORK AND THE TERRAIN OF THE AREA OF THE WORK. THE ASSESSEE IS IN THIS FIELD FOR THE PAST TWO DECADES AND THE ACCOUNTS ARE SUBJECT TO AUDIT AND THE ASSESSEE WAS MAINTAINING A LL THE SUPPORTING DOCUMENTS FOR ALL THESE YEARS. THE ASSESSING OFFIC ER MIGHT HAVE OVERLOOKED THE DETAILS PRODUCED. THE LD. COUNSEL S UBMITTED THAT THE LD. CIT(A) HAS RIGHTLY CONSIDERED ALL THESE ASPECTS AND ALLOWED THE CLAIM OF THE ASSESSEE. I.T.A. NO.353/COCH/2014 9 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. THE ASSESSEE HAS PRODUCED BEFORE US THE ORIGINAL BO OKS OF ACCOUNT, MUSTER ROLL AND VOUCHERS AND HAS ALSO FILED COPIES OF THE VOUCHERS AND MUSTER ROLL. THE ASSESSEES EXPLANATION THAT THE CONTRACT WORK I S EXECUTED IN THE ROUGH TERRAINS OF THE HIGH RANGES WHERE WAGE PAYMENTS ARE TO BE MADE ONLY IN CASH AND ALL THE PAYMENTS MADE WERE SUPPORTED BY MU STER ROLL AND VOUCHERS AND THE PROFIT MARGIN BEFORE DEPRECIATION AND INTEREST ON CAPITAL WAS 8.48% MERITS CONSIDERATION. THE FACT THAT THE LD. CIT(A) HAS REDUCED THE DISALLOWANCE AFTER GOING THROUGH AND VERIFYING THESE RECORDS ALSO NEED TO BE MENTIONED. HOWEVER TO MEET THE ENDS OF JUSTI CE AND CONSIDERING THE LAPSES, IF ANY IN MAINTAINING THE SUPPORTING DOCUME NTS, WE DIRECT THE ASSESSING OFFICER TO MAKE THE DISALLOWANCE TO 2% OF THE EXPENSES SPECIFIED INSTEAD OF 1% OF EXPENSES MADE BY THE LD. CIT(A). ACCORDINGLY, THIS ISSUE IS PARTLY ALLOWED. 10. REGARDING THE DISALLOWANCE OF BLASTING EXPENSES THE LEARNED COUNSEL HAS FILED THE FOLLOWING WRITTEN SUBMISSION: DISALLOWANCE OF BLASTING EXPENSES RS.45,37,820/- (A) THE ASSESSING OFFICER DISALLOWED THE BLASTING EXPEN SES ALLEGING NON DEDUCTION OF TDS. THE ASSESSEE WAS MAKING WEEKLY WA GE PAYMENTS I.T.A. NO.353/COCH/2014 10 AS PER THE MUSTER AND THE TOTAL PAYMENT IS USUALLY ACKNOWLEDGED BY THE LEADER OF THE GANG. THESE VOUCHERS WERE ALSO PR ODUCED BEFORE THE ASSESSING OFFICER. (B) BLASTING WORK COULD BE CARRIED OUT ONLY BY EXPERIE NCE LABOURERS. WE ARE PURCHASING THE MATERIALS FOR BLASTING AND THE W ORKERS DO THE BLASTING ON DAILY WAGES WHICH ARE SETTLED ON A WEEK LY BASIS. (C) THE ENTIRE PAYMENTS WERE ON ACCOUNT OF BLASTING WO RK AND THE ADDITION WAS MADE ON THE WRONG ASSUMPTION THAT THE ENTIRE AMOUNT WAS GIVEN TO A SINGLE PARTY. THE ASSESSING OFFICER HAS NOT FOUND ANY EVIDENCE TO SHOW THAT A CONTRACT EXIST BETWEEN THE PARTIES. IT IS ONLY A STRETCH OF IMAGINATION ON WHICH THE ADDITION IS M ADE. (D) THE COPY OF THE LEDGER EVIDENCING THE PURCHASE OF THE EXPLOSIVE MATERIALS FOR THE BLASTING IS PLACED ON RECORD. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE FACTS OF THE CASE. THE LD. AR HAS ALSO PRODUCED THE ORIGINAL BOO KS OF ACCOUNT, VOUCHERS AND MUSTER ROLL TO SUPPORT THE CLAIM OF THE ASSESSE E. HE HAS ALSO FILED THE LEDGER COPY FOR PURCHASE OF EXPLOSIVES WITH THE RES PECTIVE BILLS. VERIFICATION OF THESE RECORDS SHOW THAT THE WAGES WERE PAID TO T HE WORKERS FOR BLASTING WORK AS PER THE MUSTER ROLL MAINTAINED BY THE ASSES SEE WHICH CONTAINS THE I.T.A. NO.353/COCH/2014 11 NAME OF THE WORKER, NUMBER OF DAYS WORKED AND HIS W AGES FOR EACH DAY. CONSIDERING ALL THESE ASPECTS AND TAKING INTO ACCOU NT THE DETAILS SUBMITTED BY THE ASSESSEE, WE ARE OF THE CONSIDERED OPINION T HAT THE BLASTING WORK DONE BY THE ASSESSEE IS NOT OF CONTRACTUAL NATURE A ND HENCE THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS HEREB Y DELETED. ACCORDINGLY, THIS ISSUE IS ALLOWED. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENU E IN I.T.A. NO. 353/COCH/2014 IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 17-11-2016. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 17 TH NOVEMBER, 2016 GJ COPY TO: 1. M/S. KIP CONSTRUCTION COMPANY, KAVIKUNNEL, KUNNA CKAL P.O., MUVATTUPUZHA-682 316. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1, ALUVA. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, KOCHI. 5. D.R., I.T.A.T.,COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN