Ramshakal Construction Pvt Ltd, Jamshedpur V. DCIT CIRCLE-1, Jamshedpur

ITA 4/RAN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9673 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 11-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHANDAN DAS J CITLD
• Keywords: TDS

Judgement Text

1 ITA NO . 04/RAN/17 A.Y 201 2 - 13 M/S. RAMSHAKAL CONSTRU CTION PVT. LTD PAGE 1 IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI (BEFORE SHRI S. S. GODARA , J.M. & DR.A.L.SAINI, A.M.) IT A NO. 04 /RAN/1 7 : ASSTT. YEAR : 20 1 2 - 13 M/S. RAMSHAKAL CONSTRUCTION PRIVATE LIMITED PAN: AA DCR4544G VS D.C.I.T, CIR - 1, JSR (APPE LLANT) (RESPONDENT) APPELLANT / ASSESSEE BY : NONE APPEARED RESPONDENT /DEPARTMENT BY : SHRI CHANDAN DAS , J CIT/LD.DR DATE OF HEARING : 11 - 01 - 2019 DATE OF PRONOUNCEMENT: 22 - 0 2 - 2019 ORDER PER BENCH : THE CAPTIONED APPEAL FILED BY THE ASSESSEE , IS DIRECTED AGAINST THE ORDER DATED 0 7 - 10 - 2016 PASSED BY THE LD. COMMISSIONER OF INCOME - TAX (APPEALS), JAMSHEDPUR , WHICH IN TURN ARISE S OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER U/S. 14 3(3) OF THE INCOME - TAX ACT, 1961 (IN SH ORT, THE ACT) DATED 11 - 03 - 2015 . 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF OF ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASIONS. THE LEARNED DEPARTMENTAL REPRESENTATIVE ( LD.DR) WAS PRESENT FOR THE APPELLANT R EVENUE. IN THE ABSENCE OF ANY APPEARANCE OF THE ASSESSE E , THE APPEAL IS BEING DISPOSE OF EX PARTE QUA THE ASSESSE E AFTER HEARING THE LD. DR FOR THE REVENUE ON MERITS IN TERMS OF RULE 24 OF ITAT RULES, 1963. 2 ITA NO . 04/RAN/17 A.Y 201 2 - 13 M/S. RAMSHAKAL CONSTRU CTION PVT. LTD PAGE 2 3. GROUNDS OF APPEAL RAISED BY THE ASSESSEE A RE AS FOLLOWS: 1. FOR THAT THE APPELLANT IS ENGAGED IN CIVIL CONTRACT WORK AND DERIVED INCOME FROM EXECUTION OF CONTRACT WORK IN VARIOUS GOVERNMENT DEPARTMENTS. LD. C I T(A) CONFIRMED THE DISALLOWANCE OF 5% OF THE EXPENSES CLAIMED UNDER DIFFERENT HEADS A S MADE BY LD. A.O. DISALLOWANCE WAS MADE OUT OF TENDER FEE, TELEPHONE EXPENSES, SECURITY EXPENSES, PRINTING & STATIONERY AND DEDUCTIONS. ALL THE EXPENSES ARE FULLY VERIFIABLE AND THERE WAS NO REASON FOR MAKING DISALLOWANCE OUT OF EXPENSES CLAIMED. 2. FOR THAT APPELLANT DISCLOSED A REASONABLE PROFIT ON THE CONTRACT WORK EXECUTED WHICH WAS ACCEPTED BY LD. A.O. THE ACCOUNTS WERE MAINTAINED IN REGULAR COURSE AND WERE VERIFIABLE. NO DEFECT WHATSOEVER WAS FOUND IN COURSE OF A SSESSMENT PROCEEDINGS. LD. C I T(A) WAS , THEREFORE, NOT JUSTIFIED IN MAKING DISALLOWANCE OUT OF EXPENSES WHICH ARE FULLY VERIFIABLE. 3. FOR THAT INSTRUCTIONS SHOULD HAVE BEEN GIVEN TO ALLOW CREDIT FOR THE TDS DEDU CTE D FOR WHICH APPELLANT IS HAVING SUFFICIENT EVIDENCE. LD. C I T(A) WAS NOT JUSTI FIED IN SUGGESTING THAT THIS GROUND IS NOT APPEALABLE. APPELLANT PRAY THAT CREDIT FOR TDS DEDUCTED SHOULD BE ALLOWED IN FULL FOR WHICH EVIDENCE WAS AVAILABLE WITH THE APPELLANT. 4. FOR THAT OTHER GROUNDS IN DETAIL WILL BE ARGUED AT THE TIME OF HEARING. 4. GROUND NO S . 1 TO 2 RELATES TO CONFIRMATION OF DISALLOWANCE OF 5% OF THE EXPENSES CLAIMED UNDER DIFFERENT HEADS. 5. THE BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE A SSESSEE WAS REQUIRED TO PRODUCE BOOKS OF ACCOUNT SUCH AS CASH BOOK, LEDGER, BILLS/VOUCHERS FOR EXAMINATION OF EXPENSES THROUGH ACCOUNTS. THE SAME WERE PRODUCED BY THE A.R. OF ASSESSEE. BOOKS OF ACCOUNT PRODUCED WERE ACCORDINGLY 3 ITA NO . 04/RAN/17 A.Y 201 2 - 13 M/S. RAMSHAKAL CONSTRU CTION PVT. LTD PAGE 3 EXAMINED AND VERIFIED BY AO . THE BILLS & VOUCHERS IN RESPECT OF VARIOUS EX PENSES DEBITED IN P&L ACCOUNT HAVE BEEN CHECKED AT RANDOM BASIS AND SOME 'DISCREPANCIES WERE FOUND BY AO . SOME OF THE BILLS/VOUCHERS WERE FOUND TO BE PETTY IN NATURE AND INTERNALLY VOUCHED. CONSIDERING THIS FACT, 5% OF EXPENSES INCURRED UNDER RESPECTIVE HE ADS WERE DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF ASSESSEE DURING THE PERIOD UNDER CONSIDERATION. HEAD - WISE DETECTION OF THE SAME AND AMOUNT OF DISALLOWANCE CONSIDERED ARE AS UNDER: - SL. HEAD TOTAL EXPENSE DEBITED 5 % OF EXPENSES DISALLOWED ON E STIMATE BASIS 1. DEDUCTION 48,55,829/ - 242,791/ - 2. PRINTING AND STATIONERY 102,000/ - 5,100/ - 3. SECURITY EXPENSES 108,000/ - 5,400/ - 4. TELEPHONE EXPENSES 32205/ - 1,610/ - 5. TENDER FEE 21060/ - 1,053/ - TOTAL 51,19,094/ - 2,55,954/ - 6. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY AO OBSERVING THE FOLLOWINGS : 4.3. I HAVE GONE THROUGH THE ORDER OF THE LEARNED AO AS WELL AS THE WRITTEN SUBMISSION MADE BY THE APPELLANT. THE AO SHOULD HAVE BEEN SPECIFIC IN DISALLOWANCES MADE BY HIM. BUT THE ASSESEE IN HIS SUBMISSION STATED HIMSELF THAT DISALLOWANCES WAS MADE FOR WANT OF FEW EXTERNAL VOUCHERS AS EVIDENCES FOR EXPENSE TO THE SATISFACTION OF THE AO. THIS IMPLIES THAT THERE SHOULD HAVE BEEN DISALLOWANCES BUT SHOULD HAVE BEEN SPECIFIC. THE FAC TS AND DECISION QUOTED BY ASSESSE E DOES NOT FAVOUR HIM. THE ASSESSE HAS QUOTED THE DECISION OF ESTER INDUSTRIES LTD. WHERE IT IS HELD THAT MAKING ADDITION ON AD - HOC BASIS WITHOUT CALLING ASSESSEES EXPLANATION WAS NOT JUSTIFIED. IN ASSESSEES CASE, THE AO FOUND DISCREPANCY. THIS HAS BEEN DISCUSSED DURING ASSESSMENT PROCEEDING AND THEREAFTER THE ADDITION IS CONSIDERED. 4 ITA NO . 04/RAN/17 A.Y 201 2 - 13 M/S. RAMSHAKAL CONSTRU CTION PVT. LTD PAGE 4 THE DECISION IN THE CASE OF TULSI NARAYAN GARG ITSELF SAYS IN CIVIL CONSTRUCTION WORKS IT IS NOT PRACTICAL TO MAINTAIN PROPER VOUCHER ETC OF EXPENSES. THE ASSESSE E DID NOT STATE THE CONSEQUENCES. SUCH OMISSION ON THE PART OF THE ASSESSE DEFINITELY ATTRACTS ADDITION. CONSIDERING ALL THE FACTS, I DO NOT FIND DISALLOWANCE MADE @5% OF EXPENSES AS EXCESSIVE. HENCE ADDITION OF RS.2,55,954/ - IS HE REBY CONFIRMED . 7. WE NO T E THAT AO FOUND DISCREPANCY IN BILLS AND VOUCHERS SUBMITTED BY ASSESSE E , THEREFORE, THE LD. CIT(A) MADE DISALLOWANCE @ 5% OF EXPENSES. SINCE DISALLOWANCE WAS MADE ON ACCOUNT OF SPECIFIC DISCREPANCY, HENCE, WE CONFIRM THE ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE. 8. THE ASSESSEES GRIEVANCE IN GROUND NO. 3 IS THAT ASSESSING OFFICER HAS NOT GIVEN THE CREDIT OF TDS CERTIFICATES. WE DIRECT THE ASSESSING OFFICER TO ALLOW CREDIT FOR TDS DEDUCTED, AFTER VERIFYING THE TDS CERTIFICA TES. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSE E IS PARTLY ALLOWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 22 - 0 2 - 2019 SD/ - SD/ - ( S. S. GODARA ) (DR. A.L.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22 - 0 2 - 2019 *PRADIP (SR.PS) 5 ITA NO . 04/RAN/17 A.Y 201 2 - 13 M/S. RAMSHAKAL CONSTRU CTION PVT. LTD PAGE 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT/ ASSESSEE: M/S. RAMSHAKAL CONSTRUCTION PRIVATE LIMITED ROAD NO.4 BLOCK NO. 120/2/4 BAGBERA COLONY, JSR - 831002. 2 THE RESPONDENT/ REVENUE : THE CIT (APPEALS) , JSR 3. THE CIT - , 4. THE CIT(A) - , 5. DR, RANCHI BENCHES, RANCHI TRUE COPY, BY ORDER, ASSISTANT REGISTRAR / SENIOR P.S ITAT, RANCHI BENCHES