ADDL CIT CIR 1, KALYAN V. ABU UBAID MOINUDDIN SHAIKH, MUMBAI

ITA 3893/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71492 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 12-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Keywords: Assessment record
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI . . , , BEFORE SHRI B. R. MITTAL, JM AND SHRI SANJAY ARORA , AM ./ I.T.A. NO. 3893/MUM/2011 ( / ASSESSMENT YEAR: 2007-08) ASST. CIT, CIRCLE 1, 1 ST FLOOR, MOHAN PLAZA, WAYALE NAGAR, KHADAKPADA, KALYAN / VS. ABU UBAID MOINUDDIN SHAIKH, 712, FAKIH COMPOUND, KARIVALI ROAD, BHIWANDI ! ./' ./PAN/GIR NO. AOLPS 2252 K ( !# /APPELLANT ) : ( $!# / RESPONDENT ) !# % / APPELLANT BY : SHRI SURENDRA KUMAR $!# & % / RESPONDENT BY : SHRI K. GOPAL ' ()* & + / DATE OF HEARING : 30.09.2013 ,-. & + / DATE OF PRONOUNCEMENT : 09.10.2013 / / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE ARISING OUT OF THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-I, THANE (CIT(A) FOR SHORT) DATED 15.02.2011, PARTLY ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S .143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A. Y.) 2007-08 VIDE ORDER DATED 24.12.2009. 2 ITA NO. 3893/MUM/2011 (A.Y. 2007-08) ASST. CIT VS. ABU UBAID MOINUDDIN SHAIKH 2. THE ONLY ISSUE BEING AGITATED BY THE REVENUE PER ITS INSTANT APPEAL IS THE DELETION OF THE DISALLOWANCE EXIGIBLE U/S. 40A(3) OF THE ACT , I.E., AT 20% OF THE GROSS CASH PAYMENTS FOR RS.55,02,773/-, OR RS.11,00,555/-. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI AL ON RECORD, INCLUDING THE ORDERS BY BOTH THE AUTHORITIES BELOW. WHILE THE REVENUES CASE IS THAT THE IMPUGNED CASH PAYMENTS EXCEED RS.20,000/- FOR EACH DATE AND, THER EFORE, FALL WITHIN THE PURVIEW OF SECTION 40A(3), LEADING TO A DISALLOWANCE @ 20% THE REOF, I.E., AT RS.11,00,555/-, THE ASSESSEES CASE IS THAT THE SAME IS IN RESPECT OF W AGES PAID FORTNIGHTLY FOR EACH LOCATION, I.E., TO A GROUP OF PERSONS, SO THAT NO PAYMENT TO ANY ONE INDIVIDUAL EXCEEDS RS.20,000/- FOR ANY GIVEN DATE SO AS TO ATTRACT THE PROVISION O F SECTION 40A(3). DURING HEARING, THE LD. DEPARTMENTAL REPRESENTATIV E (DR) WAS SPECIFICALLY CALLED UPON BY US TO STATE THE BASIS ON WHICH THE PROVISIO N OF SECTION 40A(3) OF THE ACT IS CLAIMED TO BE ATTRACTED BY THE REVENUE IN THE INSTA NT CASE; THERE BEING NOTHING TO THAT EFFECT ON RECORD. TOWARD THIS, HE, WHILE ADMITTING THAT THE THRUST OF THE REVENUES CASE IN THE ASSESSMENT PROCEEDINGS WAS ON THE DISALLOWANCE U/S.40(A)(IA), SO THAT THE IMPUGNED DISALLOWANCE U/S.40A(3) WAS STATED BY THE ASSESSING OFFICER (A.O.) TO BEING NOT MADE SEPARATELY, TELESCOPING THE TWO (DISALLOWANCES), CO NCEDED TO NO SPECIFIC FINDING IN THIS RESPECT, I.E., OF PAYMENT TO A SINGLE PERSON AT ANY GIVEN TIME OR IN FACT EVEN DURING THE COURSE OF A SINGLE DAY, IN EXCESS OF RS.20,000/-. I N FACT, THE ASSESSMENT RECORD, WHICH WAS AVAILABLE WITH HIM AT THE TIME OF THE HEARING, WAS ALSO EXAMINED BY US TO OBSERVE NO SUCH MATERIAL ON RECORD, WHICH COULD AT LEAST PRIMA FACIE MAKE OUT A CASE JUSTIFYING THE INVOCATION OF SECTION 40A(3). WE WENT TO THIS EXTEN T ON THE BASIS OF THE PLEADING OF THE LD. DR THAT IN VIEW OF THE FOCUS OF THE REVENUE DUR ING THE ASSESSMENT PROCEEDINGS ON THE DISALLOWANCE U/S. 40(A)(IA), NO PROPER FINDINGS IN THE MATTER, DESPITE CLEAR EXIGIBILITY TO A DISALLOWANCE U/S.40A(3), EVEN AS STATED IN THE ASSE SSMENT ORDER, WERE MADE THEREIN. IN FACT, IT WAS INCUMBENT ON THE REVENUE TO PRODUCE SU CH MATERIAL IN VIEW OF THE SPECIFIC FINDING BY THE LD. CIT(A) (AT PARA 4.3/PG. 16 OF TH E IMPUGNED ORDER), RENDERED AFTER EXAMINING THE MUSTER ROLL, CLEARLY STATING OF NO PA YMENT TO ANY INDIVIDUAL WORKER 3 ITA NO. 3893/MUM/2011 (A.Y. 2007-08) ASST. CIT VS. ABU UBAID MOINUDDIN SHAIKH EXCEEDING RS.20,000, SO AS TO ATTRACT S. 40A(3). UN DER THE CIRCUMSTANCES, THEREFORE, WE FIND NO SUBSTANCE IN THE REVENUES CASE. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . 0. 1 ) & 0 & 23 ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 09, 2 013 SD/- SD/- (B. R. MITTAL) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ' * MUMBAI; 4( DATED : 09.10.2013 ).(../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $!# / THE RESPONDENT 3. ' 5 ( ) / THE CIT(A) 4. ' 5 / CIT - CONCERNED 5. 8)9: $ (;< , + ;<. , ' * / DR, ITAT, MUMBAI 6. :=> ?* / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ' * / ITAT, MUMBAI