ACIT CIR 25(3), MUMBAI V. VIMAL AND ASSOCIATES, MUMBAI

ITA 4121/MUM/2012

• Counselvise Citation: 412119914 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 06-11-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 12-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI PRAKASH
• Assessee Lawyers: DR P DANIEL
• Keywords: Question of law; Non-deduction of tax; Difference of opinion
• Section: 131; 194C

Judgement Text

` IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F , MUMBAI ! , ' #$ % &%% %' , ( #$ ) BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : 4121 / / 2012 A.Y. 2009-2010 ITA NO. : 4121/MUM/2012 (ASSESSMENT YEAR: 2009-2010) ASST. COMMISSIONER OF INCOME TAX 25(3), 308, C-11, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI -400 051 VS M/S VIMAL AND ASSOCIATES, B/502, NAGWEKAR APARTMENT, AKRULI ROAD, KANDIVALI (EAST), MUMBAI -400 101 .: PAN: AAGFV 3175 R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAVI PRAKASH RESPONDENT BY : DR. P. DANIEL /DATE OF HEARING : 06-11-2013 !' / DATE OF PRONOUNCEMENT : 06-11-2013 # - O R D E R &%% %' , : PER VIVEK VARMA, JM: THE APPEAL IS FILED BY THE DEPARTMENT, AGAINST THE ORDER OF CIT(A) 35, MUMBAI, DATED 28.03.2012, WHEREIN, THE FOLLOWING GRO UNDS HAVE BEEN TAKEN: (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITIONS MADE BY THE A.O. OF RS. 37,42,887/- ON ACCOUNT OF EXPENDITURE U/S 40(A)(IA). (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITIONS OF RS. 1,17,12,450/- MADE BY THE A.O. ON ACCOUNT OF EXPENDITURE INCURRED IN RESPECT OF SUB CONT RACTING WORKS. 2. GROUND NO. 1 PERTAINS TO DISALLOWANCE OF RS. 37,42,887/- MADE U/S 40(A)(IA). M/S VIMAL AND A SSOCIATES ITA 4121/M/2012 2 3. THE FACTS AS NOTED BY THE CIT(A) ARE THAT THE ASSE SSEE IS A PARTNERSHIP FIRM, HAVING TWO PARTNERS MR. MILIND CHAUDHRY AN D MS. SAMITA CHAUDHRY. IN THE PRECEDING YEAR, THE ASSESSEE FIRM WAS IN THE NAME OF VIMAL CONSTRUCTION, HAVING TWO PARTNERS, MR. MILIND CHAUDHRY AND MS. JAYASHREE CHAUDHRY. IN THE PRECEDING YEAR(S) AND IN THE CURRENT YEAR, THE ASSESSEE IS IN THE BUSINESS OF CIVIL CONSTRUCTION AND UNDERTAKES THE ENTIRE PROCESS OF CONS TRUCTION, FABRICATION AND COMMISSIONING OF THE PROJECT. THE PROCESS BEING HIGHLY TECHNICAL, THE ASSESSEE CATERS ITS EXPERTISE TO INDUSTRIAL SEGMENT ONLY. THE AR ALSO SUBMITTED THAT IN THE CURRENT YEAR, THE ASS ESSEE IS CARRYING ON THE PROJECT, WHICH WAS UNDER PROCESS IN THE PRECEDING YEAR. 4. IN THE YEAR UNDER CONSIDERATION, THE ASSESSEE PAID U NDER EQUIPMENT HIRE CHARGES TO THE FOLLOWING: SL. NO. NAME OF THE PARTY EQUIPMENT HIRE CHARGES IN (RS.) NATURE OF WORK DONE 1 KISHORE JAYSHANKAR RAVAL 2,52,650 TRACTOR HIRE 2 PADMINI ENTERPRISES 2,71,542 JCB & DUMBER HIRE 3 RAICHAND GUJJAR 2,88,567 BREAKERS 4 PADMINI TRANSPORT 20,10,890 JCB & DUMPER HIRE AND DEDUCTED TAX AT SOURCE @ 1%. THE AO OBJECTED TO THE ABOVE, OPINING THAT TAS APPLICABLE @ 1% IS ON PAYMENT MADE TO CO NTRACTORS AND SINCE THE ASSESSEE HAD HIRED THE EQUIPMENT, PROVISIO NS OF SECTION 194I WOULD HAVE BEEN APPLICABLE AND CALLED FOR THE REASONS FROM THE ASSESSEE AS TO WHY TREAT THE TRANSACTION AS SUCH SUB CONTRACT AND NOT RENT AS PER SECTION 194I. 5. THE ASSESSEE GAVE A DETAILED REPLY, WHEREIN, IT FINALLY S UBMITTED THAT THE ASSESSEE HAD NEVER HIRED ANY SPECIFIC EQUIPMENT FROM THE SUB CONTRACTOR & THAT IT WAS NEVER IN EXCLUSIVE CHARGE OR C USTODY OF THE EQUIPMENT AND PLACED RELIANCE ON: 1. 12 SOT 32 (CHD)(URO), DV RAJ VS. INCOME-TAX OFFICE R IN THIS CASE IT WAS HELD THAT CONTRACT FOR SUPPLY OF MA TERIAL ALONG WITH TRANSPORTATION WAS A WORKS CONTRACT FOR THE PURPOSES OF SECTION 44AD. ON SUCH ANALOGY, APPELLANT SUBMITS BEFORE YOUR GOOD OFFICE TH AT ONCE IT IS A WORKS CONTRACT, PROVISIONS OF SECTION 194C WOULD APPLY. M/S VIMAL AND A SSOCIATES ITA 4121/M/2012 3 2. 4017/MUM/2010(A.Y. 2007-08). THE ACIT VS. SHRI MANISH DUTT. IN THIS CASE, HONBLE MUMBAI TRIBUNAL HELD THAT WHEN STUD IO WAS HIRED FOR UTILIZING THE DUBBING FACILITIES WHICH INCLUDED SERVICE THROU GH THE STUDIO STAFF, IT WAS A CASE COVERED BY THE PROVISIONS OF SECTION 194C. IT WAS FURTHER HELD THAT SINCE THE ASSESSEE HAD CARRIED OUT THE WORK OF DUBBING BY ENGAGING THE SERVICES AND THE SAME WAS IN THE NATURE OF GETTING THE WORK DONE THROUGH SUB- CONTRACTORS, THEREFORE, IT WAS A CASE FALLING UNDER SEC TION 194C. 3. 43 SOT 215 (MUM), (2011) 40 TTJ (MUM) 319, TATA AIG GENERAL INSURANCE CO. LTD. VS. INCOME-TAX OFFICER (OSD) 3(2). IN THIS CASE, HONBLE TRIBUNAL WAS CONSIDERING THE ISSUE OF APPLICABILITY OF THE PROVISIONS OF SECTION 194C VIS--VIS SECTION 194I. ACCORDING TO LD. AO, IN THAT CASE THE ASSESSEE HAD PAID FOR CAR HIGHER CHARGES AND THEREFORE IT WAS A CASE OF RENTING FALLING UNDER SECTION 194I. IT WAS A CASE OF A GREEMENT OF HIRING CARS ON RATE CONTRACT BASIS. THE CARS WERE NOT AT THE DIS POSAL OF THE ASSESSEE IN THAT CASE. NO CAR WAS EAR-MARKED FOR USE BY THE ASSESSEE IN THAT CASE. ON CONSIDERATION OF THE FACTS OF THE CASE IT WAS HELD THA T PROVISIONS OF SECTION 194C WOULD APPLY AND NOT THE PROVISIONS OF SECTION 194I. 4. DCIT VS. S.K. TEKRIWAL ITA NO. 1135/KOL/2010. IN THIS CASE, THE ISSUE BEFORE THE HONBLE TRIBUNAL WAS A PPLICATION OF SECTION 194C VIS--VIS 194I AND CONSEQUENCES UNDER SECTION 40(A)(I A). IT WAS HELD THAT IF THERE IS SHORT-FALL DUE TO DIFFERENCE OF OPINION ON APPLICABILITY OF PARTICULAR TDS PROVISIONS, THERE IS NO DEFAULT ON THE PART OF THE ASSE SSEE UNDER SECTION 40(A)(IA). 5. DCIT VS. CHANDABHOY AND JASSOBHOY ITA NO. 20/MUM/ 2010. IN THIS CASE ALSO HONBLE TRIBUNAL HELD THAT PROVISIONS OF SECTION 40(A)(IA) DO NOT APPLY FOR LOWER DEDUCTION OF TAX AT SOURCE. 6. THE CIT(A), AFTER NOTING THE DETAILED REPLIES AND SUBMISSIO NS MADE ON BEHALF OF THE ASSESSEE, OBSERVED, THAT THE NATUR E OF JOBS DONE BY THE HIRE OF THOSE EQUIPMENTS VARIED AND THE USE WAS NEITHER CONTINUOUS NOR PERMANENT, ON WHICH THE ASSESSEE WOULD H AVE PAID HIRE CHARGES AND TAKING FULL CONTROL OF THE EQUIPMENT. THE E QUIPMENTS WERE USED, AT TIMES, ON DAY BASIS AND IN SAME CIRCUMSTANC ES, ON HOURLY BASIS. TAKING THESE FACTS INTO CONSIDERATION, THE CI T(A) CAME TO A CONCLUSION THAT THE ASSESSEE HAD RIGHTLY DEDUCTED TA X @ 1% AS IS APPLICABLE TO WORKS CONTRACT. 7. THE CIT(A), THUS RELIED ON THE DECISIONS CITED BY THE AS SESSEE BEFORE HIM AND DELETED THE DISALLOWANCE. 8. ON THIS ORDER, THE DEPARTMENT IS IN APPEAL BEFORE THE ITAT. 9. BEFORE US, THE DR RELIED ON THE ORDER OF THE AO AND S TRENUOUSLY ARGUED TO RESTORE THE ORDER PASSED BY THE AO. 10. ON THE OTHER HAND, THE AR RELIED HEAVILY ON THE OR DER OF THE CIT(A) AND PLEADED THAT THE UNCONTROVERTED FACT, WHICH RE MAINS IS THAT M/S VIMAL AND A SSOCIATES ITA 4121/M/2012 4 THE ASSESSEE DID DEDUCT TAX AT SOURCE AND THE APPLICAT ION OF SECTION 40(A)(IA) SHALL GET ATTRACTED, IF THERE IS NO DEDUCTION AT SOUR CE AND PLACED RELIANCE ON THE DECISIONS, AS SUBMITTED BEFORE THE CIT(A). 11. THE AR RELIED ON THE DECISION OF COORDINATE BENCH AT MUMBAI, IN THE CASE OF DCIT VS. CHANDABHOY & JASSOBHOY, REPORTED IN 49 SOT 448 (MUMBAI), WHEREIN IT HAS BEEN HELD, THERE IS NO DISPUTE WITH REFERENCE TO THE DEDUCTION O F TAX UNDER SECTION 192 AND ALSO THE FACT THAT IN THE INDIVIDUAL ASSESSMENTS OF THE CONSU LTANTS THESE PAYMENTS WERE ACCEPTED AS SALARY PAYMENTS. IT IS ALSO NOT DISPUTED T HAT THE ENTIRE AMOUNT PAID TO 18 CONSULTANTS IS ONLY AN AMOUNT OF RS. 26.75 LAKHS, WHICH INDICATES THAT THEY ARE IN EMPLOYMENT AND NOT PROFESSIONAL CONSULTANTS. IT IS ALSO N OT THE CASE THAT THE ASSESSEE HAS NOT DEDUCTED ANY AMOUNT. THE ASSESSEE HAS INDEED DEDUCTED TAX UNDER SECTION 192 AND SO THE PROVISIONS OF SECTION 40(A)(IA) ALSO DO N OT APPLY, AS THE SAID PROVISION CAN BE INVOKED ONLY IN THE EVENT OF NON-DEDUCTION OF TAX AT SOURCE BUT NOT FOR LESSER DEDUCTION OF TAX. ACCORDINGLY, THE ORDER OF THE COMMISS IONER (APPEALS) DESERVED TO BE CONFIRMED. 12. THE AR ALSO RELIED ON THE DECISION OF COORDINATE BENCH AT COCHIN IN THE CASE OF APOLLO TYRES LTD. VS DCIT, ITA NO. 31/COCH/2010, WHEREIN IT WAS HELD, 13. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT SECTION 40(A)(IA) DOES NOT ENVISAGE A SITUATION WHERE THERE WAS SHORT DEDUCTION / LESSER DEDUCTION AS IN CASE OF SECTION 201(1A) OF THE ACT. THE RE IS AN OBVIOUS OMISSION TO INCLUDE SHORT DEDUCTION / LESSER DEDUCTION IN SECTION 4 0(A)(IA) OF THE ACT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THA T IN CASE OF SHORT / LESSER DEDUCTION OF TAX, THE ENTIRE EXPENDITURE WHOSE GENUINEN ESS WAS NOT DOUBTED BY THE ASSESSING OFFICER, CANNOT BE DISALLOWED. ACCORDINGLY, THE ORDERS OF LOWER AUTHORITIES ARE SET SIDE AND THE ENTIRE DISALLOWANCE IS DE LETED. 13. THE AR ALSO RELIED UPON THE DECISION OF COORDINATE BEN CH AT KOLKATA IN THE CASE OF DCIT VS S K TEKRIWAL, ITA NO. 1135/KOL/2010. 14. AT THE HEARING BEFORE US, THE AR SUBMITTED THAT THE COORDINATE BENCH DISMISSED THE REVENUE APPEAL, WHO WENT IN FURTHER APPEAL BEFORE THE HONBLE CALCUTTA HIGH COURT ON THE ISSUE. THE AR SUBMITTED THE COPY OF THE ORDER OF HONBLE CALCUTTA HIGH COURT IN I TA NO. 183 OF 2010 IN THE CASE OF CIT VS S K TEKRIWAL AND HELD, WE ARE OF THE VIEW THAT THE CONDITIONS LAID DOWN U/S 4 0(A)(IA) OF THE ACT FOR MAKING ADDITION IS THAT TAX IS DEDUCTIBLE AT SOURCE AND S UCH TAX HAS NOT BEEN DEDUCTED. IF BOTH THE CONDITIONS ARE SATISFIED THEN SU CH PAYMENT CAN BE DISALLOWED U/S 40(A)(IA) OF THE ACT BUT WHERE TAX IS DEDU CTED BY THE ASSESSEE, EVEN UNDER BONAFIDE WRONG IMPRESSION, UNDER WRONG PROV ISIONS OF TDS, THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT CANNOT BE INVO KED. M/S VIMAL AND A SSOCIATES ITA 4121/M/2012 5 AND DISMISSED THE APPEAL, AS THEIR LORDSHIPS DID NOT FIND AN Y SUBSTANTIAL QUESTION OF LAW. THE AR, THEREFORE, PRAYED THAT THE AO ERRED IN MAKING THE DISALLOWANCE U/S 40(A)(IA). 15. WE HAVE HEARD THE ARGUMENTS OF THE CONTESTING PAR TIES AND HAVE PERUSED THE IMPUGNED ORDERS AND THE ORDERS CITED BEFOR E US. IT IS AN UNCONTROVERTED FACT THAT THERE WAS A LEGITIMATE EXPENSE BY THE ASSESSEE AND THAT THE ASSESSEE DID DEDUCT TAX AT SOU RCE AS PRESCRIBED IN CHAPTER XVII OF THE INCOME TAX ACT, 1961. THE ONLY D ISPUTE RAISED BY THE AO IS WHETHER TAS SHOULD HAVE BEEN UNDER 194C OR 194I. PROVISIONS OF SECTION 40(A)(IA) GETS ATTRACTED, IF THE ASSESSEE FAILS TO DEDUCT TAS ON PAYMENT, WHICH IS IN THE NATURE OF INCOME TO THE PAY EE. 16. AS OBSERVED HEREINABOVE, THE ASSESSEE DEDUCTED TA S, THOUGH OR MAY BE UNDER A WRONG PROVISION UNDER CHAPTER XVII, SHA LL NOT ATTRACT THE PROVISIONS OF SECTION 40(A)(IA). WE DO NOT INTEND TO GO INT O THE PROVISIONS OF SECTION 201, SINCE THE SCOPE OF THE APPEAL U NDER CONSIDERATION IS LIMITED TO THE APPLICABILITY OF SECTION 40(A)(IA). 17. IN OUR CONSIDERED OPINION, THE AO ERRED IN APPLYING T HE PROVISIONS OF SECTION 40(A)(IA). WE, THEREFORE, SUSTAIN THE ORDER OF THE CIT(A) AFTER TAKING INTO CONSIDERATION THE VARIOUS DECISIONS OF THE COORDINATE BENCHES AND THE HONBLE CALCUTTA HIGH COURT . RESPECTFULLY FOLLOWING THE SAME, WE REJECT THE GROUND OF APPEAL, AS TAK EN BY THE DEPARTMENT. 18. GROUND NO. 2 PERTAINS TO THE DELETION OF RS. 1,17,12,450 /- ON ACCOUNT OF EXPENDITURE INCURRED IN RESPECT TO SUB CONTRACT WORK . 19. THE FACTS ARE THAT THE ASSESSEE MADE THE FOLLOWING P AYMENTS TO FOUR SUB-CONTRACTORS: SL NO. NAME OF THE ENTITY OUTSTANDING NAME OF THE PROPRIETOR AMOUNT (RS.) OUTSTANDING AS ON 31.03.2009 I M/S B.D. DEVELOPERS SHRI GAURANG D SHAH 38,63,750 38,19,317 II M/S SHRUSTI CONSTRUCTION SHRI BHAVIN D SHAH 39,36,250 38,90,983 III M/S CREATIVE CONSTRUCTION SMT. CHANDRIKA D SHAH 39,1 2,450 38,67,457 M/S VIMAL AND A SSOCIATES ITA 4121/M/2012 6 IV M/S GAUTAM CONSTRUCTION SHRI DINESH D. SHAH 38,87,5 50 38,42,843 19. THE AO, NOT CONVINCED WITH THE PAYMENT DETAILS, SUMMONED THE ABOVE PERSONS U/S 131 AND TOOK THEIR STATEMENTS. THE AO, AFTER CONSIDERING THE EVIDENCE AND STATEMENTS TAKEN ON OATH, DISALLOWED T HE PAYMENTS MADE TO M/S B D DEVELOPERS, PROP. SHRI GAURANG D SHAH; M/S SHRUSTI CONSTRUCTION, PROP. BHAVIN D SHAH AND M/S CREATIVE CONSTRUCTION, PROP. MRS. CHANDRIKA D SHAH, FAMILY MEMBERS OF THE SUB CONTRACTOR, MR. D INESH D SHAH. HOWEVER, THE AO ALLOWED THE PAYMENT MADE TO SHRI DINESH SHAH . 20. THE ASSESSEE TOOK THE ISSUE BEFORE THE CIT(A) A ND REITERATED THE SUBMISSIONS AND ALSO PRODUCED BEFORE HIM THE STATEM ENT OF PAYMENTS MADE TO SUB CONTRACTORS, COPIES OF BANK ACCOUNTS, COPIES OF WORKS REGISTER. THE ASSESSEE ALSO SUBMITTED THAT THE AO HAS DISREGARDED GOOD EVIDENCE WITHOUT ANY COGENT EVIDENCE TO THE CONTRARY. THE ASSESSEE A LSO PLACED RELIANCE ON A NUMBER OF DECISIONS, AS NOTED BY THE CIT(A) IN THE IMPUGNED ORDER. 21. THE CIT(A), AFTER CONSIDERING THE FACTS AND DET AILS PRODUCED ALONG WITH THE CASES CITED BEFORE HIM, REVERSED THE FINDINGS O F THE AO, AND DELETED THE ADDITION MADE. 22. AGAINST THE ORDER, THE DEPARTMENT IS IN APPEAL BEFORE THE ITAT. 23. BEFORE US, THE DR PLEADED THAT THE PAYMENTS MAD E BY THE ASSESSEE TO THE FAMILY MEMBERS OF DINESH SHAH WERE NOT GENUINE AND HENCE THE ORDER OF THE AO WAS CORRECT AND MERITS TO BE SUSTAINED. ON T HE OTHER HAND, THE AR SUBMITTED THAT WORK CONTRACT WAS UNDERTAKEN BY M/S VIMAL CONSTRUCTION, HAVING TWO PARTNERS MR. MILIND CHAUDHRY AND MS. JAY ASHREE CHAUDHRY. IN THE YEAR UNDER CONSIDERATION, THE FIRM WAS RECONSTI TUTED WHEREIN INSTEAD OF MS. JAYASHREE CHAUDHRY RETIRED AS PARTNER AND MS. S AMITA CHAUDHRY WAS INDUCTED AND THE NAME OF THE FIRM WAS ALSO CHANGED TO VIMAL ASSOCIATES. THE AR SUBMITTED THAT THE CONTRACT THAT WAS UNDERTAKEN BY THE ERSTWHILE FIRM VIMAL CONSTRUCTION WAS CONTINUED BY VIMAL ASSOCIATE S. GIVING THIS BACKGROUND, THE AR SUBMITTED THAT SIMILAR DISALLOWA NCE WAS MADE IN THE PRECEDING YEAR AND THE MATTER TRAVELED UPTO THE ITA T STAGE. IN ITA NO. 5082/MUM/2010, IN THE CASE OF VIMAL CONSTRUCTION, T HE PAYMENTS MADE TO LABOUR CONTRACTORS WERE ALLOWED, THOUGH THE PAYMENT S WERE MADE LATE. M/S VIMAL AND A SSOCIATES ITA 4121/M/2012 7 24. THE AR POINTED OUT THAT ONCE THE PAYMENT IS ACCEP TED TO BE GENUINE, THEY HAVE TO BE ALLOWED AND PLACED RELIANCE ON TH E DECISIONS PLACED BEFORE THE CIT(A). 25. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AND CASE S CITED AND REPRODUCED IN THE ORDER OF CIT(A). THE AO AND THE DR HA VE DOUBTED THE GENUINENESS OF THE EXPENDITURE MADE TO THE FAMILY CO NCERNS OF SHRI DINESH SHAH, WHICH WERE PAID THROUGH CHEQUES. THIS AS PECT WAS EXAMINED BY THE CIT(A), WHO FOUND THAT SHRI DINESH SHAH, C ONFIRMED THE FACT THAT JOBS DONE BY HIS WIFE AND SONS IN THEIR PRO PRIETARY CONCERNS, WERE ACTUALLY PERFORMED BY SHRI DINESH SHAH. WE ALSO FIND FROM THE IMPUGNED ORDER THAT THE FAMILY MEMBERS OF SHRI D INESH SHAH, WHO WERE PROPRIETORS AS CONTRACTORS ACCEPTED TH E FACTUM OF PAYMENT IN THE STATEMENTS RECORDED AT THE ASSESSMENT STAGE, THOUGH THE SAME WERE INCONSISTENT, BUT NONE THE LESS, ACCEPTED THE FACT THAT THEY RECEIVED THE PAYMENT AGAINST THEIR JOB WORK FROM T HE ASSESSEE. WE ALSO ENDORSE THE VIEW EXPRESSED BY THE CIT(A) THAT T HE AO, DOUBTING THE GENUINENESS OF PAYMENTS TO SUB CONTRACTOR S, SHOULD HAVE CALLED FOR FURTHER DETAILS/CLARIFICATIONS FROM THE BANK. BY NOT CALLING THESE EVIDENCES, THE EVIDENCE ON RECORD ONLY GOT STREN GTHENED AND SUBSTANTIATED THE GENUINENESS OF THE PAYMENTS AND CLAIMS MADE BY THE ASSESSEE. WE FIND THAT SHRI DINESH SHAH CONFIRMED THA T HE WAS INVOLVED IN CARRYING OUT OF WORK ON BEHALF OF HIS WIFE AND TWO SONS. THERE IS NO FINDING BY THE AO, THAT ACTUALLY NO WORK WAS PERFORMED. AO HAS ALSO NOT GIVEN ANY FINDING THAT THE ASSESSEE HAD ITS OWN MAN POWER TO DO THE WORK, CLAIMED TO BE CARRIED OUT BY THE SUB CONTRACTORS, TO PROVE THAT PAYMENTS WERE NOT GENUINE. DISALLOWANCE HA S BEEN MADE ON THE GROUND THAT WIFE AND SONS DID NOT KNOW ABOUT TH E WORK BEING DONE. THIS ASPECT HAS BEEN EXPLAINED THAT IT WAS SHRI DINE SH SHAH WHO HAD BEEN DOING THE SUB CONTRACT WORK ON BEHALF OF T HE FAMILY MEMBERS. THIS MODUS, IS NOT UNCOMMON IN TRADITIONAL JOINT FAM ILIES. IF M/S VIMAL AND A SSOCIATES ITA 4121/M/2012 8 AT ALL THIS WAS RELEVANT, IT WOULD ONLY BE RELEVANT FOR CLUB BING OF INCOME IN THE HANDS ON SHRI DINESH SHAH, CERTAINLY NOT FOR DISALLOWANCE OF EXPENSES, WHICH HAS ACTUALLY BEEN INCURRED AND WORK ACTUALLY DONE. WE ALSO FIND THAT SIMILAR DISALLOWANCE WAS MA DE BY THE AO, IN THE HANDS OF THE ASSESSEE, ON ACCOUNT OF PAYMENT TO THE SAME PARTIES, I.E. FAMILY CONCERNS BELONGING TO THE FAMILY MEMBERS OF SHRI DINESH SHAH FOR THE SAME WORK IN THE EARLIER ASSESSMENT YEAR, THOUGH, ON ACCOUNT OF DELAYS IN MAKING THE PAYMENTS. THE COORDINATE BENCH IN THE CASE OF VIMAL CONSTRUCTION (ERSTWHILE CONCER) IN ITA NO. 5082/MUM/2010 (SUPRA), ALLOWED THE CLAIM OF THE ASSESSEE. 26. ON GOING THROUGH THE FINDINGS OF THE ITAT IN THE PREC EDING YEAR, IT IS CLEAR THAT THE DEPARTMENT DID NOT DOUBT THE FACTUM AND GENUINENESS OF EXPENDITURE, BORNE BY THE ASSESSEE ON SIMILAR FACTS AN D ON THE SAME PROJECT IN THE PRECEDING YEAR AND WHICH IS IN CONTINUANCE IN THE CURRENT YEAR. 27. IN THE CURRENT YEAR, THE AO HAS NOT BROUGHT OUT ANY MATERIAL, WHICH WOULD DISTURB THE FACTUAL POSITION TRAVELLING FROM THE P RECEDING YEAR AND WOULD LEAD TO DISTINCT IMPACT IN THE CURRENT YEAR. 28. ON THESE FACTUAL FINDINGS, WE ARE OF THE VIEW THAT THE C IT(A) WAS CORRECT IN DELETING THE ADDITION. 29. WE, THEREFORE, RESPECTFULLY FOLLOWING THE VARIOUS CASE LAWS , RELIED UPON BY THE CIT(A) IN THE IMPUGNED ORDERS AND THE REA SONING GIVEN BY HIM, WE DO NOT FIND ANY REASON TO DISTURB THE FINDINGS OF TH E CIT(A), WHEREIN, HE HAS REVERSED THE ORDER OF THE AO ON THE IMP UGNED ISSUE. THIS FINDING, WE SUSTAIN AND REJECT THE GROUND NO. 2 TAKE N BY THE DEPARTMENT. 30. BOTH THE GROUNDS, AS RAISED BY THE DEPARTMENT ARE THEREFORE, REJECTED. M/S VIMAL AND A SSOCIATES ITA 4121/M/2012 9 IN THE RESULT, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06.11.2013 SD/- SD/- ( ! ) ( &%% %' ) ' #$ #$ (RAJENDRA SINGH) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER &&' MUMBAI, () DATE: 06 NOVEMBER, 2013 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) * * + - 35, MUMBAI / THE CIT(A) -35, MUMBAI. 4) THE CIT- 25, MUMBAI, 5) -./ 0 12 , * 0 , &' / THE D.R. F BENCH, MUMBAI. 6) /3 2 COPY TO GUARD FILE. *)4 / BY ORDER / / 5 TRUE COPY / / [ 6 / 7 8 * 0 , &' DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *:;7 . . * CHAVAN, SR. PS