The Dy. Commr. Of Income Tax, Cir.-1(1), RAJKOT-GUJARAT V. M/s Tirth Agro Technology Pvt. Ltd., GONDAL

ITA 414/RJT/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0959 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 10-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M N MOURYA
• Assessee Lawyers: DM RINDANI
• Keywords: Corroborative evidences; TDS
• Section: 194C; 48; 13; 22; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 414/RJT/2015 ( / ASSESSMENT YEAR : 2012-13 ) DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1(1), RAJKOT ROOM NO.508, AAYAKAR BHAVAN, RACE COURSE RING ROAD, RAJKOT 360001 / VS. M/S TIRTH AGRO TECHNOLOGY PVT. LTD. PLOT NO.B, SURVEY NO.108/1, GONDAL ROAD, N.H. 8B, BHUNAVA, GONDAL, RAJKOT ./ ./ PAN/GIR NO. : AABCT6282F ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI M. N. MOURYA , CIT .D.R. / RESPONDENT BY : SHRI D. M. RINDANI, A.R. / DATE OF HEARING 15/02/2020 !'# / DATE OF PRONOUNCEMENT 01/06/2020 $% /O R D E R PER BENCH: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS)-1, RAJKOT (CIT(A) IN SHORT) DATED 26/06/2 015 RELEVANT TO ASSESSMENT YEAR (AY) 2012-13. ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 2 - 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE HONBLE CIT(A)-1, RAJKOT HAS ERRED IN LAW A ND ON FACT OF THE CASE IN DELETING THE ADDITION MADE BY THE AO OF RS.10,24,42 ,002/- ON ACCOUNT OF DISALLOWANCE OF JOB WORK EXPENSES. 2. THE ONLY ISSUE RAISED BY THE REVENUE IS THAT THE LEARNED CIT (A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR RS. 10,24, 42,002/- ON ACCOUNT OF JOB CHARGES. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF AGRI CULTURAL EQUIPMENTS. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS INCURR ED JOBS WORK EXPENSES AMOUNTING TO RS.33,67,20,932/- (RS. 21,48,94,498.00 PERTAINING TO JOB WORK CHARGES +RS. 12,18,26,434/- PERTAINING TO LABOUR CO NTRACTORS CHARGES). THE AO OUT OF SUCH JOB WORK CHARGES CONDUCTED THE ENQUIRY WITH RESPECT TO CERTAIN JOB WORKER TO WHOM JOB WORK CHARGES AMOUNTING TO RS.10, 24,42,002/- WERE PAID. THE DETAILS OF SUCH PARTIES STAND AS UNDER: S.NO. NAME OF THE PARTY NATURE OF WORK DONE AMOUNT OF JOB WORK EXPENSES 1. VIHARILAL RAMLAL RAM WELDING JOB WORK 494402 2. VIJAY HIRABHAI RAM HYDRAULIC PRESS JOB WORK 135565 3. BALUBHA IBORKHETARIYA WELDING JOB WORK 1391831 4. ANGADKUMAR GUPTA WELDING JOB WORK 1625833 5. SHRILAL CHAUHAN WELDING JOB WORK 1706535 6. FARUK M LAHEJI MATERIAL HANDLING CHARGES 1660404 7. SANJAYGIRI APARNATHI FILLING & DUBERING JOB WORK 1299654 8. BABAN YADAV WELDING & PRESS JOB WORK 40252 9. BIRENDRASINH PLAZMA PARTS JOB WORK 142214 10. KRISHNA PRASAD HUSENI WELDING & PRESS JOB WORK 3404658 11. BHIMSI SOLANKI TURNING JOB WORK 1762750 12. GHANSHYAM KHER GRINDING JOB WORK 1319260 13. SHAILENDRA CHAUHAN WELDING & FABRICATION JOB WORK 2217685 14 NOOR MOHMMAD MANSURI WELDING JOB WORK 3041605 15 CHOTABHAL B BAVARIYA TURNING JOB WORK 1131314 16 YOGESH L BAVALA DRILLING JOB WORK 5063978 17 JITENDRA KUMAR RASHBIHARI FITTING JOB WORK 3638400 18 IMTIYAZ ALIKHAN PATHAN TURNING JOB WORK 1196400 ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 3 - 19 RAM BAHADUR PASWAN WELDING JOB WORK 2815415 20 MUSTAFA INDUSTRIES WELDING JOB WORK 12680754 21 SHAILESH INDUSTRIES CUTTING JOB WORK 101481 22 MANSAR INDUSTRIAL SERVICES LABOUR CHARGES 30970389 23 P B DIXIT ENTERPRISE LABOUR CHARGES 24601223 TOTAL 102442002 HOWEVER, THE AO DURING THE ASSESSMENT PROCEEDINGS D OUBTED ON THE GENUINENESS OF THE EXPENSES FOR THE REASONS AS DISC USSED BELOW: I. THE PARTIES MENTION AT SERIAL NO. 1 TO 21 WERE MAIN TAINING SAVING BANK ACCOUNTS WITH THE UNION BANK OF INDIA. IN MOST OF THE CASES THE ASSESSEE ACTED AS THE INTRODUCER IN THE OPENING OF SUCH BANK ACCOUNT OF THE PARTIES. FURTHER VERIFICATION OF THE BANK STATEMENT OF THESE PARTIES, IT WAS REVEALED THAT THERE WAS TH E IMMEDIATE CASH WITHDRAWAL FROM THE BANK AFTER DEPOSITING THE CHEQUES INTO THESE ACCOUNTS. FURTHERMORE, ALL THESE PARTIES WERE OPERATING FROM THE PREMISES OF THE ASSESSEE FOR PROVIDING THE SO-CALLED JOB WORK SERVICES. II. THE STATEMENTS UNDER SECTION 131 OF THE ACT, WERE R ECORDED WITH RESPECT TO FEW OF THE PARTIES NAMELY SHRI YOGESHBAV DA, SHRI PRAVIN M. YADAV, SHRI MOHARRAM ALI ANSARI AND SHRI SANJAYGIRIAPARNATHI. FROM THE STATEMENTS, IT WAS GA THERED THAT THESE WORKERS WERE WORKING AS THE EMPLOYEE OF THE A SSESSEE FOR THE REASONS AS DETAILED UNDER: A. THESE JOB WORKERS DID NOT HAVE SUFFICIENT MACHINERI ES AND EQUIPMENTS TO CARRY OUT THE JOB WORK ASSIGNED B Y THE ASSESSEE. B. THE SIGNATURES OF THESE PARTIES AS RECORDED IN THE STATEMENT FURNISHED UNDER SECTION 131 OF THE ACT, W ERE NOT MATCHING WITH OTHER DOCUMENTS SUCH AS BANKING DOCUMENTS, BILLS ISSUE BY THEM TO THE ASSESSEE. ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 4 - C. IN MOST OF THE CASES THE BILLS RAISED BY THE JOB WO RKER WERE IDENTICAL AND GENERATED BY THE COMPUTER SYSTEM . IN VIEW OF THE ABOVE THE AO DOUBTED ON THE GENUINEN ESS OF THE EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD JOB WORK CHA RGES AND ACCORDINGLY SHOW CAUSED THE ASSESSEE TO JUSTIFY ITS STAND. THE ASSESSEE IN RESPONSE TO SUCH NOTICE FILED A REP LY DATED 19 MARCH 2015 WHICH IS SUMMARIZED AS UNDER: I. THE OUTSOURCING OF CERTAIN ACTIVITIES IN THE MANUFA CTURING PROCESS IS A COMMON BUSINESS PRACTICE. AS A RESULT OF OUTSO URCING OF SUCH JOB WORK, THE TURNOVER OF THE ASSESSEE HAS INCREASE D FROM 254.52 CRORES IN ASSESSMENT YEAR 2011-12 TO RS. 447.75 CRO RES IN THE YEAR UNDER CONSIDERATION. THE JOB WORK CHARGES TO S ALES FOR THE YEAR UNDER CONSIDERATION HAS REDUCED TO 4.80% AS AG AINST 11.43% IN THE ASSESSMENT YEAR 2010-11 WHICH RESULTE D INCREASED IN THE GROSS PROFIT MARGIN FOR THE YEAR UNDER CONSI DERATION IN COMPARISON TO THE EARLIER ASSESSMENT YEAR. II. THE IMPUGNED JOB WORK CHARGES HAVE BEEN PAID TO THE PARTIES THROUGH ACCOUNT PAYEE CHEQUE AND AFTER DEDUCTING TH E TAX UNDER THE RELEVANT PROVISIONS OF THE ACT. THUS THE IDENTI TY OF THE PARTY CANNOT BE DOUBTED AS THE PAYMENT WAS MADE THROUGH T HE BANKING CHANNEL. III. MOST OF THE JOB WORKERS HAVE FILED THEIR RESPECTIV E INCOME TAX RETURN SHOWING THE AMOUNT OF INCOME RECEIVED FROM T HE ASSESSEE. IV. THE PARTIES MENTION AND SERIAL NO. 22 AND 23 WERE R EGISTERED LABOUR CONTRACTORS AND WERE ENGAGED IN SUPPLYING TH E LABOUR AS MANY AS 200 TO 250. THESE PARTIES WERE REGISTERED U NDER THE PROVIDENT FUND ACT. THESE PARTIES WERE MAINTAINING REGULAR BOOKS OF ACCOUNTS INCLUDING MONTHLY SALARY REGISTER WHICH WERE ALSO AUDITED AND THEY WERE ALSO FILING THE INCOME TAX RE TURN. V. THE PARTIES IN THEIR STATEMENTS FURNISHED UNDER SEC TION 131 OF THE ACT HAVE NOT DENIED TO HAVE RENDERED JOB WORK SERVI CES TO THE ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 5 - ASSESSEE AGAINST THE PAYMENT RECEIVED FROM THE ASSE SSEE. THE PARTIES HAVE ALSO DISCLOSED IN THE STATEMENT THE MA NNER IN WHICH THE JOB CHARGES WAS DETERMINED. VI. THE ALLEGATION THAT THE BANK ACCOUNT OF THE JOB WOR KERS WERE OPENED AFTER THE INTRODUCTION OF THE ASSESSEE, THE PARTIES HAVE IMMEDIATELY WITHDRAWN THE CASH FROM THE BANK AFTER DEPOSITING THE CHEQUE AND THESE PARTIES WERE OPERATING FROM TH E PREMISES OF THE ASSESSEE DO NOT RENDER THE CLAIM OF THE ASSESSE E AS FALSE. VII. SIMILARLY, THE MISMATCH IN THE SIGNATURE CANNOT BE A GROUND TO HOLD THE JOB CHARGES AS BOGUS ONES THE TRANSACTION HAS BEEN ESTABLISHED BASED ON OTHER DOCUMENTS INCLUDING IN T HE STATEMENT FURNISHED UNDER SECTION 131 OF THE ACT. FURTHERMORE , THE COMPUTER-GENERATED BILLS BEING IDENTICAL CANNOT LEA D TO DRAW AN INFERENCE THAT THE CLAIM OF THE ASSESSEE IS FALSE M ORE PARTICULARLY WHERE GLARING EVIDENCES ARE AVAILABLE ON RECORD THA T ASSESSEE HAS UNDERTAKEN THE SERVICES OF THE JOB WORKER. SIMILARL Y THE JOB WORKERS WERE OPERATING AT THE PREMISES OF THE ASSES SEE FOR THE REASON THAT THEY WERE WORKING ON THE HEAVY AND BULK Y EQUIPMENTS WHICH WERE MANUFACTURED AT THE PREMISES OF THE ASSESSEE. AS SUCH IT WAS NOT POSSIBLE TO TRANSPORT SUCH HEAVY AND BULKY EQUIPMENTS AT THE PREMISES OF THE JOB WORKER. VIII. THE ASSESSEE WITH RESPECT TO THE JOB WORKERS WHO EI THER NOT RESPONDED TO THE NOTICE ISSUED UNDER SECTION 131 OF THE ACT OR NOTICE WERE NOT SERVED UPON THEM FILE THE COPIES OF THE INCOME TAX RETURN OF THE JOB WORKERS, COPIES OF THE BILLS AND LEDGERS, BANK STATEMENTS, BALANCE SHEET, PROFIT AND LOSS ACCOUNT, CAPITAL ACCOUNT IN SUPPORT OF ITS CONTENTION. THE ASSESSEE FURTHER CLAIMED THAT NON-REPLY OF THE NOTICE ISSUED UNDER PROVISION OF T HE ACT, CANNOT LEAD TO DRAW AN INFERENCE THAT THE AFORESAID PARTIE S WERE NOT GENUINE. ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 6 - HOWEVER, THE AO DISAGREED WITH THE CONTENTION OF TH E ASSESSEE BY OBSERVING THAT THE INCREASE IN THE TURNOVER, GROSS PROFIT CAN NOT BE THE BASIS TO JUSTIFY THAT SUCH EXPENSES WERE GENUINE. THE AO FURTHER OBSERVED THAT THE DOCUMENTS FILED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM TOWARDS THE JOB CHARGES ARE NOTHING BUT C OOKED UP STORY. IT IS BECAUSE THERE IS MISMATCH IN THE SIGNATURE OF THE P ARTIES MADE IN THE BANK ACCOUNT IN FORM VIZ A VIZ IN THE BILLS RAISED TO TH E ASSESSEE. THE AO IN SUPPORT OF HIS CONTENTION PLACED THE COPY OF THE BANK OPENI NG FORM AND THE BILL IN HIS ORDER. ACCORDINGLY, THE AO WAS OF THE VIEW THAT ALL THE CHEQUE BOOKS OF THE PARTIES WERE IN THE CUSTODY OF THE ASSESSEE WHICH W AS USED IN SHOWING THE BOGUS BILLS. IN VIEW OF THE ABOVE THE AO HELD THAT THE EXPENSES CLAIMED BY THE ASSESSEE FOR RS. 10,24,42,002/- UNDER THE HEAD OF T HE JOB WORK CHARGES ARE NOT GENUINE. THUS HE DISALLOWED THE SAME AND ADDED TO T HE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LE ARNED CIT (A). 5. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTE D THAT THE PARTIES APPEARED BEFORE THE AO IN RESPONSE TO THE NOTICE UN DER SECTION 131 OF THE ACT HAVE ADMITTED THE FACT THAT THEY HAVE SIGNED THE B ILLS RAISED TO THE ASSESSEE AS WELL AS IN THE BANK OPENING FORM. FURTHERMORE, THER E ARE MORE GLARING EVIDENCES SUCH AS THE PAYMENT WAS MADE THROUGH ACCO UNT PAYEE CHEQUE AFTER THE DEDUCTION OF TDS AND INCOME TAX RETURNS OF THE JOB WORKERS. THE ASSESSEE ALSO SUBMITTED THAT IT WAS HAVING CASH CREDIT FACILITY IN UNION BANK OF INDIA THEREFORE THE BANK ACCOUNTS OF THE AF ORESAID PARTIES WERE OPENED IN THE SAME BANK ACCOUNT SO AS TO FACILITATE EASY T RANSFER OF PAYMENT. SIMILARLY, THE CASH WAS WITHDRAWN FROM THE BANK IMM EDIATELY BY THE PARTIES FOR MEETING THEIR DAY-TO-DAY EXPENSES WITH RESPECT TO T HE SALARY OF THE WORKERS. MOREOVER, THE ASSESSEE HAS NOTHING TO DO WITH THE W ITHDRAWAL OF CASH BY THE JOB WORKER. ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 7 - THERE WAS NO EVIDENCE BROUGHT ON RECORD BY THE AO T HAT THE CASH WITHDRAWN FROM THE BANK ACCOUNT OF THE JOB WORKERS CAME TO TH E ASSESSEE. THE ASSESSEE HAS REITERATED THE SUBMISSIONS AS MADE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. 6. THE LEARNED CIT (A) AFTER CONSIDERING THE SUBMIS SION OF THE ASSESSEE DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER: IN RESPECT OF THE 23 JOBWORK PARTIES, COMPLETE DOC UMENTARY EVIDENCES AS MENTIONED ABOVE WERE FURNISHED TO THE ASSESSING OFF ICER. THE PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES AFTER DEDUCTING DUE T.D.S. AN D THERE IS NO FINDING THAT ANY PORTION OF THESE PAYMENTS RETURNED BACK TO THE APPE LLANT COMPANY. THE ASSESSING OFFICER HAS CONTENDED THAT THE SIGNAT URE ON THE ACCOUNT OPENING FORMS AND THAT ON THE BILLS IS DIFFERENT AND THEREF ORE THERE IS PRESUMPTION THAT THE JOBWORK EXPENDITURE INCURRED IN RESPECT OF 23 PARTI ES IS BOGUS. THE ONLY CONTENTION OF THE ASSESSING OFFICER TO DISALLOW JOBWORK EXPENSES AND TREAT IT AS BOGUS IS BECAUSE OF CHANGE IN SIGNATURE IN BANK DOCUMENTS AND ALLEGED I NVOICES PROVIDED TO THE APPELLANT COMPANY. HE HAS ALSO OBSERVED THAT THE JOBWORK PART Y DID NOT HAVE ANY INDEPENDENT INFRASTRUCTURE TO PROVIDE SUCH SERVICES. BOTH THESE ALLEGATIONS HAVE BEEN ADEQUATELY ADDRESSED AND CONTENDED BY THE APPELLANT COMPANY IN PAPER BOOK FILED BEFORE ME AND THE ARGUMENTS OF THE APPELLANT COMPANY IN RESPECT O F THE SAME APPEARS TO BE SATISFACTORY AND PALATABLE. THESE CANNOT BE MADE BA SIS FOR CONCLUDING THE EXPENSE AS BOGUS. WHEN THE JOBWORK PARTIES OF WHOSE STATEMENT WERE RE CORDED U/S 131(1) OF THE INCOME TAX ACT, 1961 THEMSELVES HAVE CONFIRMED THAT THE SIGN ON THE BILLS AND THAT ON THE ACCOUNT OPENING FORM IS THERES AND THEREFORE TH ERE IS NO GROUND OF ANY OTHER PRESUMPTION. EVEN OTHERWISE WHAT IS RELEVANT FOR GE NUINENESS OF CLAIM OF EXPENDITURE OF JOBWORK IS WHETHER THE JOBWORK PARTIES HAVE PROV IDED THE SERVICES, RECEIVED PAYMENT BY ACCOUNT PAYEE CHEQUES, WORK DONE HAS BEE N AT COMPETITIVE MARKET PRICES AND OFFERED SUCH INCOME TO TAX, WHICH IS ADEQUATELY SUBSTANTIATED BY THE APPELLANT COMPANY. THERE IS NO EVIDENCE ANYWHERE THAT THESE CONCERNS G AVE BOGUS JOBWORK BILLS TO THE APPELLANT COMPANY. THERE IS NOTHING ON RECORD T O SHOW THAT ANY PART OF THE FUND GIVEN BY THE APPELLANT COMPANY TO THESE PARTIES CAM E BACK TO THE APPELLANT COMPANY IN ANY FORM. EVEN THE STATEMENTS RECORDED DO NOT I MPLICATE THE TRANSACTIONS WITH THE ASSESSEE IN ANY WAY. I FIND THAT THE ASSESSEE HAS DISCHARGED ITS ONUS BY ADDUCING SUFFICIENT EVIDENCES. I ALSO FIND THAT THE JOB PARTY IS ASSESSED TO TAX AND THE JOB CHARGES RECEIVED BY THEM FROM THE APPELLANT COMPANY ARE INCLUDED IN THEIR TOTAL J OB RECEIPTS. THE JOB PARTIES WHO WERE SUMMONED AND WHOSE STATEMENT RECORDED U/S 131 HAVE CONFIRMED TO THE ASSESSING OFFICER THAT THEY HAVE DONE JOB WORK FOR THE APPELLANT COMPANY. SUFFICIENT EVIDENCES AS MENTIONED ABOVE WERE FURNISHED TO ASSE SSING OFFICER. IN THIS WAY THE APPELLANT COMPANY HAS DISCHARGES ITS ONUS AND PROVE D THAT JOB WORK EXPENSES ARE BONA FIDE AND GENUINE IN ITS CASE. ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 8 - MERELY BY ARBITRARY PRESUMPTIONS IT CANNOT BE SAID THAT THE AMOUNTS MIGHT HAVE COME BACK TO APPELLANT COMPANY. THERE IS NO SUCH FINDING AT ALL. THERE IS NO BASIS AT ALL FOR THIS PRESUMPTION. THIS RENDERS THE ARBITRARY PRESUM PTION OF THE ASSESSING OFFICER TO BE COMPLETELY BASELESS AND UNSUSTAINABLE. IN THE ABSEN CE OF ANY SUCH FINDING, THE GENUINE EXPENDITURE INCURRED BY APPELLANT COMPANY FOR JOB W ORK PAID BY ACCOUNT PAYEE CHEQUES CANNOT BE DISALLOWED. FURTHER, THE ASSESSING OFFICER HIMSELF HAS OBTAINED THE BANK STATEMENTS OF ALL THE JOBWORK PARTIES DIRECTLY FROM BANK. THE EXISTENCE O F THESE PARTIES IS THUS JUSTIFIED BY AN EXTERNAL INDIRECT CONFIRMATION OBTAINED BY THE ASSE SSING OFFICER. SINCE THE BANKS HAVE MANDATED THE KYC DOCUMENTS, THE EXISTENCE OF THESE PARTIES CANNOT BE RULES OUT. FURTHER, IN RESPECT OF PARTIES TO; WHOM SUMMONS WAS NOT SERVED, THE ASSESSING OFFICER HAS DURING THE COURSE' OF ASSESSMENT PROCEE DINGS HIMSELF OBTAINED THE BANK STATEMENTS OF THE SAID PARTIES. IT IS IN THE COMMON KNOWLEDGE OF EVERYBODY THAT THE BANK ACCOUNT, NOW A DAYS, COULD BE OPENED ONLY ON S UBMISSION OF PROPER DOCUMENTS. THE BANK ACCOUNT COPIES COLLECTED BY THE ASSESSING OFFICER SHOWS THAT THE APPELLANT COMPANY HAD MADE THE PAYMENTS TO THE ABOVE SAID PAR TIES BY WAY OF ACCOUNT PAYEE CHEQUES. THUS, IT IS SEEN THAT THE TRANSACTIONS HAV E BEEN ROUTED THROUGH THE BANK ACCOUNTS. FURTHER THE APPELLANT COMPANY HAS FURNISH ED THE INCOME TAX RETURN, BANK PASSBOOK (WHEREVER AVAILABLE), COPY OF LEDGER ACCOU NTS, TDS DEDUCTION DETAILS OF THE ABOVE PARTIES TO PROVE THEIR EXISTENCE AND BONAFIDE OF THE TRANSACTION, THUS, IT IS SEEN THAT THE APPELLANT COMPANY HAS FURNISHED MANY DOCUM ENTS TO PROVE THE EXISTENCE OF THE PARTIES AND BONAFIDE OF THE TRANSACTION OF JOBW ORK AND THEY HAVE NOT BEEN CONTROVERTED BY THE ASSESSING OFFICER. IN SUCH CASES IT WOULD HAVE BEEN BETTER THAT BEFORE EMBARKING UPON THE PATH OF PROVING THE EXPENDITURE AS BOGUS, THE ASSESSING OFFICER SHOULD HAVE LOOKED INTO THE BUSINESS RESULTS COMPARED TO THE EARLIER YEARS I.E COMPARISION OF GROSS PROFIT MARGINS. FROM THE FACTS SUBMITTED, IT IS OBSERVED THAT GROSS PROFIT MARGIN OF THE APPELLANT COMPANY HAS INCREASED FROM 15.05% IN A.Y. 2010-11 TO 20.93% IN A.Y. 2012-13 WHICH SHOWS INCREASE OF 5.88%. FOR SAKE OF ARGUMENT, EVEN IF THE EXPENDITURE IS CONSIDERED AS BOGUS, WHAT WILL HAPPEN TO GROSS P ROFIT ? I FIND THAT THE APPELLANT'S CASE IS COVERED BY DECI SION OF HONORABLE GUJARAT HIGH COURT IN THE CASE OF CIT 1 VS AVINASH M. JHAWAR (TA X APPEAL NO. 229 OF 2009) AND M.K. BROTHERS (1986) 52 CTR (GUJ) 228. I FIND THAT ON SIMILAR FACTS THE AHMEDABAD TRIBUNAL IN CASE OF JHAWAR INTERNATIONAL SURAT VS INCOME TAX OFFICER IN ITA NO .1938 & 2015/AHD/2008 HAS ALLOWED THE CLAIM BY HOLDING AS UNDER:- 'WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROU GH THE FACTS AND CIRCUMSTANCES OF THE CASE. 'WE HAVE ALSO PERUSED TH E CASE RECORDS INCLUDING THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE CI T(A). WE HAVE ALSO PERUSED THE PAPER BOOK FURNISHED BY THE ASSESSES. WE FIND T HAT THE ASSESSES IS AN EXPORTER OF VALUE ADDED TEXTILE FABRICS. WE FURTHER FIND THAT THE VALUE ADDITION WORK WAS GOT DONE FROM THIS JOB WORK PARTY: WE FURTHER FIND THAT THE ASSESSEE DURING THE ASSESS MENT PROCEEDINGS HAS FURNISHED FOLLOWING EVIDENCES IN SUPPORT OF EXPENDI TURE:- JOB CHARGES INVOICES RAISED BY JOB PARTY. BANK STATEMENTS EVIDENCING PAYMENTS TO THE JOB PARTY BY ACCOUNT PAYEE CHEQUES, ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 9 - COPIES OF TDS CERTIFICATES IN RESPECT OF TDS DEDUCTED U/S 194C FROM THIS JOB PARTY. CONFIRMATION FROM THIS JOB PARTY THAT THEY HAVE D ONE JOB WORK OF VALUE ADDITION AND RECEIVED PAYMENT FOR IT. LEDGER ACCOUNT COPY OF THIS JOB PARTY. WE FIND THAT THE ASSESSEE HAS DISCHARGED HIS ONUS B Y ADDUCING SUFFICIENT EVIDENCES AND IT IS WELL ESTABLISHED LAW THAT ASSESSEE IS REQUIRED TO PROVE HIS SOURCE ONLY. ONCE THE ASSESSE E PROVES HIS SOURCE (SUPPLY OF SERVICE), ADDITION CANNOT BE MADE IN HIS HAND. WE ALSO FIND THAT THE JOB PARTY IS ASSESSED TO TAX AND THE JOB C HARGES RECEIVED BY HIM FROM ASSESSEE ARE INCLUDED IN THEIR TOTAL JOB R ECEIPTS. THE JOB PARTY HAS CONFIRMED TO THE A.O. THAT THEY HAVE DONE JOB W ORK FOR ASSESSEE. SUFFICIENT EVIDENCES AS MENTIONED ABOVE WERE FURNIS HED TO A.O. IN THIS WAY THE ASSESSEE HAS DISCHARGES HIS ONUS AND PROVED THAT JOB WORK EXPENSES ARE BONA FIDE AND GENUINE IN HIS CASE. IN SUCH SITUATION, THERE REMAINS NO BASIS WITH A.O. TO DISBELIEVE THE JOB WORK EXPENSES IN HANDS OF ASSESSEE.' RESPECTFULLY FOLLOWING THE AFORESAID ORDERS OF THE HONORABLE HIGH COURT &. TRIBUNAL AND BASED ON APPRECIATION OF DOCUMENTS SUBMITTED AND FA CTS ANALYZED, I AM OF THE VIEW THAT THE JOB WORK CHARGES IN QUESTION INCURRED BY T HE APPELLANT COMPANY CANNOT BE SAID TO BE BOGUS. IN VIEW OF THE ABOVE FACTS AND THE CASE LAWS DISCUS SED ABOVE, ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. 7. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 8. THE LEARNED DR BEFORE US REITERATED THE FINDINGS OF THE AO AND VEHEMENTLY RELIED ON HIS ORDER. 9. ON THE OTHER HAND THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 245 AND SUBMITTED THAT: COMPANY MANUFACTURES AGRICULTURAL IMPLEMENTS OF VARIOUS TYPES AND WEIGHTS, FOR HARVESTING, PLANTING ETC. SUCH AS HARVESTERS, TILLE RS, DIGGERS, MOWERS ETC. IT MANUFACTURED NEARLY 68,000 LARGE AND SMALL ITEMS AN D MADE TURNOVER OF RS. 447 CRORES (LAST YEAR RS. 254CRORES) COMPANY HAS ADOPTED PRACTICE IF USING CONTRACT LABOUR AND IN-HOUSE JOB WORK SOURCING INSTEAD OF PAYROLL WORKERS FOR BUSINESS EXPEDIENCY PERCEIVED BY IT; THIS IS A WELL RECOGNIZED PRACTICE IN LARGE INDUSTRIES BUSINESS EXPEDIENCY WAS EXPLAINED DURING ASS ESSMENT AS ALSO TO CIT-A IT RETAINED OVER 900 SKILLED AND UNSKILLED W ORKERS BY THIS METHOD AS AGAINST ONLY 39 SUPERVISORS; THERE WERE THUS NO WORKERS ON PAYROLL, WHICH ITSELF GOES TO ESTABLISH THAT WITHOUT CONTRACTED WORKERS, PRODUCTION AND TURNOVER OF ANY VALUE (NOT TO SPEAK OF OVER ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 10 - RS. 400 CRORES) COULD NOT HAVE BEEN ACHIEVED; THUS THIS ALSO PROVES THAT CONTRACTORS DID IN FACT RENDER SERVICES AND WERE PRESENT AND REQUIR ED MANUFACTURE OF PRODUCTS INVOLVES A LARGE NUMBE R OF TECHNICAL AND MANUAL PROCESSES; ALL OF WHICH WAS GOT DONE BY CONTRACTORS' WORKERS, AS SHOW N IN PROCESS FLOW CHART AND INVOICES WITHOUT SUCH PROCESSES (FOR WHICH PAYMENTS ARE MADE), PRODUCTION COULD NOT HAVE BEEN ACHIEVED AT ALL, WHICH ESTABLISHES NEED AND EX PEDIENCY AS ALSO FACTUM OF SERVICES HAVING BEEN RENDERED AND RECEIVED WHEN ALL TECHNICAL INFRASTRUCTURE BELONGS TO COMPANY AND IT HAS ITS OWN PLANT, IT IS OBVIOUS FOR CONTRACTED WORKERS TO COME AND WORK IN COMPANY PREMISES; THIS IS NO REASON FOR DISALLOWANCE AT ALL ALL CONTRACTORS WHO WERE EXAMINED HAVE CONFIR MED RENDERING OF SERVICES AND RECEIPT OF PAYMENTS FOR THE SAME, FOR WHICH PAYMENTS WERE MADE BY BANK AND TDS WAS MADE PARTY-WISE EVIDENCE IN SUPPORT OF I MPUGNED EXPENDITURE WAS SUBMITTED WHICH INCLUDED ITEMIZED BILLS/RATES/NATURE OF WORK DONE, BANK STATEMENTS, ACCOUNTS AND ITRS OF LARGE CONTRACTORS ALL ARE PAN HOLDERS WITH KYCS IN BANKS IN TWO LARGE CONTRACTORS' CASES, EVEN THEIR L ABOUR PAYMENT REGISTERS WERE PRODUCED, WHICH PROVES DEPLOYMENT AND PAYMENT TO LABOURERS BY THEM SIMILAR EXPENDITURE (MOSTLY SAME PARTIES EVEN ) IN EARLIER AND LATER YEARS ARE ALLOWED TO COMPANY BY THE DEPT. IN SCRUTINY ASSESSMENTS WHILE GP RATIO HAS IMPROVED OVER YEARS (15.05 % IN AY 10-11 TO 20.93% IN AY 12-13), IMPUGNED CHARGES TO TURNOVER RATIO HAS GONE DOWN (1 1.43% IN 10-11 TO 4.80% IN AY 12-13), THUS SHOWING REASONABILITY AND ABSENCE OF A NY UNREAL ELEMENT AS ALSO RISING BOOK RESULT COMPANY WAS REQUIRED TO PAY PF CONTRIBUTION I N RESPECT OF JOB WORKERS WHICH PROVES THEIR PRESENCE AND EXISTENCE FOR COMPANY WORK IN IT S PREMISES LABOUR INSURANCE POLICY INCLUDED SUCH CONTRAC TED WORKERS TWO OF THE LARGE LABOUR SUPPLIERS HOLD LAB OUR CONTRACTORS REGISTRATION UNDER CONTRACT LABOUR ACT NONE OF THE PERSONS HAVE STATED THAT ANY PART OF PAYMENT WAS RETURNED TO COMPANY AND THERE IS NO SUCH EVIDENCE EITHER ALL ISSUES RAISED BY THE AO WERE EXPLAINED AN D REPLIED TO IN DETAIL BY COMPANY IN ASSESSMENT WITH EVIDENCE AND HAVE BEEN CONTROVERTED AO'S STAND OF HOLDING THE ENTIRE EXPENDITURE AND THAT TOO ON ALL CONTRACTORS IS BASED ON SURMISES AND ON PERIPHERAL, INSIGNIFICANT FACTORS W ITH NO COGENT MATERIAL; AO COULD NOT HAVE IGNORED THE FACTUM OF SERVICES BEING RECEIVED AND THERE BEING NO OTHER EXPENDITURE ON WAGES AND THAT TOO AT A REASONABLE P ERCENTAGE; IMPUGNED DISALLOWANCE FORMED ONLY 2.5% OF TOTAL EXPENDITURE OF THE COMPAN Y, WHICH SHOWED A SUBSTANTIAL PROFIT OF OVER RS. 48 CRORE; NO COMPANY COULD SURVI VE WITHOUT 900 WORKERS NEEDED FOR SUCH SCALE OF OPERATIONS AND IT IS INCONCEIVABLE AN D IMPROBABLE THAT A COMPANY WOULD DEBIT 'BOGUS' EXPENDITURE. ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 11 - BOTH THE LD. DR AND AR VEHEMENTLY SUPPORTED THE ORD ER OF THE AUTHORITIES BELOW A FAVORABLE TO THEM. 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD BEFORE US. THE ISSUE IN THE PRESENT CASE RELATES TO THE DISALLOWANCE OF THE EXPENSES CLAIMED BY THE ASS ESSEE UNDER THE HEAD JOB WORK CHARGES TO THE TUNE OF RS. 10,24,42,002/-. THE AO WAS OF THE VIEW THAT THE IMPUGNED EXPENSES ARE BOGUS OR FICTITIOUS IN NA TURE AND THEREFORE THE SAME WAS DISALLOWED BY HIM. HOWEVER THE LEARNED CIT (A) WAS PLEASED TO DELETE THE ADDITION IN VIEW OF THE FACT THAT THE TRANSACTION W AS CARRIED OUT THROUGH BANKING CHANNEL, NECESSARY DOCUMENTARY EVIDENCES WERE FURNI SHED SUBSTANTIATING GENUINENESS OF PARTIES AND TRANSACTION AND FURTHERM ORE SIMILAR EXPENSES WERE CLAIMED IN THE EARLIER YEARS WHICH WERE ACCEPTED BY THE REVENUE. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE ENT IRE BASIS OF MAKING THE DISALLOWANCE BY THE AO WAS THAT JOB WORKER HAS NOT SUFFICIENT EQUIPMENT AND MACHINERY TO PERFORM REQUIRED JOB, THEY ARE PROVIDI NG SERVICES FROM ASSESSEE PREMISES AND THERE WAS THE MISMATCH IN THE SIGNATUR E OF THE JOB WORKERS IN THE BANK OPENING FORM AND IN THE BILLS/INVOICES RAISED TO THE ASSESSEE. IN OUR CONSIDERED VIEW THE BASIS OF DISALLOWANCES BY THE A O ARE MERELY A SUSPICION AND NOT THE CONCLUSIVE EVIDENCES ESPECIALLY IN THE CIRCUMSTANCES WHERE THERE ARE MANY MORE DIRECT EVIDENCES AVAILABLE ON RECORD. SUCH EVIDENCES INCLUDE THE PAYMENT THROUGH BANKING CHANNEL AFTER THE DEDUCTION OF TDS, COPIES OF THE INCOME TAX RETURNS, CONFIRMATION IN THE STATEMENT R ECORDED UNDER SECTION 131 OF THE ACT, REGISTRATIONS UNDER THE PROVIDENT FUND ACT OF THE LABOUR CONTRACTORS. FURTHER THE ALLEGATION OF THE AO FOR MISMATCH IN TH E SIGNATURE AS DISCUSSED ABOVE AND THE JOB WORKER WORKING FROM THE PREMISES OF THE ASSESSEE HAS BEEN SUFFICIENTLY ADDRESSED BY THE ASSESSEE. ACCORDINGLY , THE LEARNED CIT (A) HAS GIVEN VERY CLEAR FINDING OF ON THE ISSUES RAISED BY THE AO. SIMILARLY, THE JOB WORKERS IN THEIR STATEMENT RECORDED UNDER SECTION 1 31(1) HAVE CONFIRMED THAT THEY PROVIDED SERVICES OF JOB WORK, RECEIVED CHARGE S BASED ON COMPETITIVE ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 12 - MARKET RATE AND OFFERED THE SAME FOR THE TAXATION. THE LEARNED CIT (A) FURTHER GIVEN THE FINDING THAT THE THERE WAS NO EVIDENCE BR OUGHT BY THE REVENUE SUGGESTING THAT THE AMOUNT PAID TO THE JOB WORKER R ETURNED TO THE ASSESSEE IN ANY MANNER. ON PERUSAL OF THE DETAILS OF THE JOB WORK EXPENSES INCURRED BY THE ASSESSEE IN THE EARLIER YEARS, WE FIND THAT THE EXPENSES FOR TH E YEAR UNDER CONSIDERATION TOWARDS THE JOB CHARGES IN RELATION TO THE SALES HA S REDUCED SIGNIFICANTLY. THUS, IN OUR CONSIDERED VIEW THERE IS A DIRECT RELATION B ETWEEN THE AMOUNT OF SALES VIZ A VIZ THE JOB WORK CHARGES INCURRED BY THE ASSESSEE , THEREFORE SUCH TURNOVER CANNOT BE ACHIEVED WITHOUT INCURRING THE JOB WORK E XPENSES. IT IS ALSO PERTINENT TO NOTE THAT, AT THE TIME OF H EARING THE LEARNED DR HAS NOT BROUGHT ANYTHING ON RECORD CONTRARY TO THE FINDING OF THE LEARNED CIT (A). THUS THERE CANNOT BE ANY DISALLOWANCE OF THE JOB WORK EX PENSES AS ALLEGED BY THE AO. IN HOLDING SO WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. AVINASH M JHAWAR IN TAX APPEAL NUMBER 2299 OF 2009 WHEREIN IT WAS HELD AS UNDER: FROM THE ABOVE DISCUSSION, IT CAN BE CLEARLY SEEN THAT THE ENTIRE ISSUE HAS BEEN DECIDED BY THE TRIBUNAL ON THE BASIS OF EVIDEN CE ON RECORD. THE ASSESSEE HAD MADE PAYMENTS FOR JOB WORK DONE THROUGH ACCOUNT PAY EE CHEQUES. THERE WERE OTHER CORROBORATIVE EVIDENCES TO PROVE SUCH EVIDENCE. THE ASSESSING OFFICER HAS COMMITTED ERROR IN DISALLOWING SUCH CLAIM. IN ADDITION TO HAV ING MADE PAYMENTS THROUGH A/C. PAYEE CHEQUES, THE ASSESSEE HAD ALSO PRODUCED TDS C ERTIFICATE IN SUPPORT OF ITS CLAIM. THE ASSESSING OFFICER OBSERVING THAT SUCH CHEQUE PA YMENTS COULD HAVE BEEN WITHDRAWN AND REVERTED BACK TO THE ASSESSEE WERE NO T BASED ON EVIDENCE. WE FIND NO INFIRMITY IN THE ORDER OF THE TRIBUNAL. ACCORDINGLY, TAX APPEAL STANDS DISMISSED. IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE FACT S IN TOTALITY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (A). HENCE, WE DECLINE TO INTERFERE IN THE ORDER OF THE LEARNED CIT-A. HENCE THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 11. BEFORE WE PART WITH THE ISSUE/APPEAL AS DISCUSS ED ABOVE, IT IS PERTINENT TO NOTE THAT THE CLAUSE (C) OF RULE 34 OF THE APPEL LATE TRIBUNAL RULES 1963 ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 13 - REQUIRES THE BENCH TO MAKE ENDEAVOUR TO PRONOUNCE T HE ORDER WITHIN 60 DAYS FROM THE CONCLUSION OF THE HEARING. HOWEVER THE PER IOD OF 60 DAYS CAN BE EXTENDED UNDER EXCEPTIONAL CIRCUMSTANCES BUT THE SA ME SHOULD NOT ORDINARILY BE FURTHER EXTENDED BEYOND ANOTHER 30 DAYS. IN SIMP LE WORDS THE TOTAL TIME AVAILABLE TO THE BENCH IS OF 90 DAYS UPON THE CONCL USION OF THE HEARING. HOWEVER, DURING THE PREVAILING CIRCUMSTANCES WHERE THE ENTIRE WORLD IS FACING THE UNPRECEDENTED CHALLENGE OF COVID 2019 OUTBREAK, RESULTING THE LOCKDOWN IN THE COUNTRY, THE ORDERS THOUGH SUBSTANTIALLY PREPAR ED BUT COULD NOT BE PRONOUNCED FOR THE UNAVOIDABLE REASONS WITHIN THE M AXIMUM PERIOD OF 90 DAYS. IN SUCH CIRCUMSTANCES WE FIND THAT THE HONBLE MUMB AI TRIBUNAL IN THE CASE OF JSW LIMITED VS DEPUTY COMMISSIONER OF INCOME TAX IN ITA NO. 6103/MUM/2018 VIDE ORDER DATED 14-5-2020 EXTENDED THE TIME FOR PRONOUNCING THE ORDER WITHIN 90 DAYS OF TIME BY OBS ERVING AS UNDER: 9. LET US IN THIS LIGHT REVERT TO THE PREVAILING SI TUATION IN THE COUNTRY. ON 24TH MARCH, 2020, HONBLE PRIME MINISTER OF INDIA TOOK THE BOLD STEP OF IMPOSING A NATIONWIDE LOCKDOWN, FOR 21 DAYS, TO PREVENT THE SPREAD OF COV ID 19 EPIDEMIC, AND THIS LOCKDOWN WAS EXTENDED FROM TIME TO TIME. AS A MATTER OF FACT , EVEN BEFORE THIS FORMAL NATIONWIDE LOCKDOWN, THE FUNCTIONING OF THE INCOME TAX APPELLATE TRIBUNAL AT MUMBAI WAS SEVERELY RESTRICTED ON ACCOUNT OF LOCKDOWN BY T HE MAHARASHTRA GOVERNMENT, AND ON ACCOUNT OF STRICT ENFORCEMENT OF HEALTH ADVISORI ES WITH A VIEW OF CHECKING SPREAD OF COVID 19. THE EPIDEMIC SITUATION IN MUMBAI BEING GR AVE, THERE WAS NOT MUCH OF A RELAXATION IN SUBSEQUENT LOCKDOWNS ALSO. IN ANY CAS E, THERE WAS UNPRECEDENTED DISRUPTION OF JUDICIAL WOK ALL OVER THE COUNTRY. AS A MATTER OF FACT, IT HAS BEEN SUCH AN UNPRECEDENTED SITUATION, CAUSING DISRUPTION IN THE FUNCTIONING OF JUDICIAL MACHINERY, THAT HONBLE SUPREME COURT OF INDIA, IN AN UNPRECED ENTED ORDER IN THE HISTORY OF INDIA AND VIDE ORDER DATED 6.5.2020 READ WITH ORDER DATED 23.3.2020, EXTENDED THE LIMITATION TO EXCLUDE NOT ONLY THIS LOCKDOWN PERIOD BUT ALSO A FEW MORE DAYS PRIOR TO, AND AFTER, THE LOCKDOWN BY OBSERVING THAT IN CASE THE LIMITATION HAS EXPIRED AFTER 15.03.2020 THEN THE PERIOD FROM 15.03.2020 TILL THE DATE ON WHICH THE LOCKDOWN IS LIFTED IN THE JURISDICTIONAL AREA WHERE THE DISPUTE LIES OR WHERE THE CAUSE OF ACTION ARISES SHALL BE EXTENDED FOR A PERIOD OF 15 DAYS AFTER THE LIFTING OF LOCKDOWN . HONBLE BOMBAY HIGH COURT, IN AN ORDER DATED 15T H APRIL 2020, HAS, BESIDES EXTENDING THE VALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERVED THAT, IT IS ALSO CLARIFIED THAT WHILE CALCULATING TIME FOR DISP OSAL OF MATTERS MADE TIME- BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY , AND ALSO OBSERVED THAT ARRANGEMENT CONTINUED BY AN ORDER DATED 26TH MARCH 2020 TILL 30TH APRIL 2020 SHALL CONTINUE FURTHER TILL 15TH JUNE 2020 . IT HAS BEEN AN UNPRECEDENTED SITUATION NOT ONLY IN INDIA BUT ALL OVER THE WORLD. GOVERNMENT OF INDIA HAS, VIDE NOTIFICATION DATED 19 TH FEBRUARY 2020, TAKEN THE STAND THAT, THE CORONAVIRUS SHOULD BE CONSIDERED A CASE OF NATURAL CALAMITY AND FMC (I.E. FORCE MAJEURE CLAUSE) MAYBE INVOKED, WHEREVER CONSIDERED APPROPRI ATE, FOLLOWING THE DUE PROCEDURE. THE TERM FORCE MAJEURE HAS BEEN DEFINED IN BLACKS LAW DICTIONARY, AS AN EVENT OR EFFECT THAT CAN BE NEITHER ANTICIPATED NOR CONTROLLED WHEN SUCH IS THE POSITION, AND IT IS OFFICIALLY SO NOTIFIED BY THE GOVERNMENT OF INDIA AND ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 14 - THE COVID-19 EPIDEMIC HAS BEEN NOTIFIED AS A DISAST ER UNDER THE NATIONAL DISASTER MANAGEMENT ACT, 2005, AND ALSO IN THE LIGHT OF THE DISCUSSIONS ABOVE, THE PERIOD DURING WHICH LOCKDOWN WAS IN FORCE CAN BE ANYTHING BUT AN ORDINARY PERIOD. 10. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE ARE O F THE CONSIDERED VIEW THAT RATHER THAN TAKING A PEDANTIC VIEW OF THE RULE REQUIRING PRONOU NCEMENT OF ORDERS WITHIN 90 DAYS, DISREGARDING THE IMPORTANT FACT THAT THE ENTIRE COU NTRY WAS IN LOCKDOWN, WE SHOULD COMPUTE THE PERIOD OF 90 DAYS BY EXCLUDING AT LEAST THE PERIOD DURING WHICH THE LOCKDOWN WAS IN FORCE. WE MUST FACTOR GROUND REALIT IES IN MIND WHILE INTERPRETING THE TIME LIMIT FOR THE PRONOUNCEMENT OF THE ORDER. LAW IS NOT BROODING OMNIPOTENCE IN THE SKY. IT IS A PRAGMATIC TOOL OF THE SOCIAL ORDER. TH E TENETS OF LAW BEING ENACTED ON THE BASIS OF PRAGMATISM, AND THAT IS HOW THE LAW IS REQ UIRED TO INTERPRETED. THE INTERPRETATION SO ASSIGNED BY US IS NOT ONLY IN CON SONANCE WITH THE LETTER AND SPIRIT OF RULE 34(5) BUT IS ALSO A PRAGMATIC APPROACH AT A TI ME WHEN A DISASTER, NOTIFIED UNDER THE DISASTER MANAGEMENT ACT 2005, IS CAUSING UNPREC EDENTED DISRUPTION IN THE FUNCTIONING OF OUR JUSTICE DELIVERY SYSTEM. UNDOUBT EDLY, IN THE CASE OF OTTERS CLUB VS DIT [(2017) 392 ITR 244 (BOM)] , HONBLE BOMBAY HIGH COURT DID NOT APPROVE AN ORDER BEING PASSED BY THE TRIBUNAL BEYOND A PERIOD OF 90 DAYS, BUT THEN IN THE PRESENT SITUATION HONBLE BOMBAY HIGH COURT ITSELF HAS, VID E JUDGMENT DATED 15TH APRIL 2020, HELD THAT DIRECTED WHILE CALCULATING THE TIME FOR DISPOSAL OF MATTERS MADE TIME-BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME S HALL STAND EXTENDED ACCORDINGLY . THE EXTRAORDINARY STEPS TAKEN SUO MOTU BY HONBL E JURISDICTIONAL HIGH COURT AND HONBLE SUPREME COURT ALSO INDICATE THAT THIS PERIOD OF LOCKDOWN CANNOT BE TREATED AS AN ORDINARY PERIOD DURING WHICH THE NORM AL TIME LIMITS ARE TO REMAIN IN FORCE. IN OUR CONSIDERED VIEW, EVEN WITHOUT THE WOR DS ORDINARILY, IN THE LIGHT OF THE ABOVE ANALYSIS OF THE LEGAL POSITION, THE PERIOD DU RING WHICH LOCKOUT WAS IN FORCE IS TO EXCLUDED FOR THE PURPOSE OF TIME LIMITS SET OUT IN RULE 34(5) OF THE APPELLATE TRIBUNAL RULES, 1963. VIEWED THUS, THE EXCEPTION, TO 90-DAY TIME-LIMIT FOR PRONOUNCEMENT OF ORDERS, INHERENT IN RULE 34(5)(C), WITH RESPECT TO THE PRONOUNCEMENT OF ORDERS WITHIN NINETY DAYS, CLEARLY COMES INTO PLAY IN THE PRESENT CASE. OF COURSE, THERE IS NO, AND THERE CANNOT BE ANY, BAR ON THE DISCRETION OF THE B ENCHES TO REFIX THE MATTERS FOR CLARIFICATIONS BECAUSE OF CONSIDERABLE TIME LAG BET WEEN THE POINT OF TIME WHEN THE HEARING IS CONCLUDED AND THE POINT OF TIME WHEN THE ORDER THEREON IS BEING FINALIZED, BUT THEN, IN OUR CONSIDERED VIEW, NO SUCH EXERCISE WAS REQUIRED TO BE CARRIED OUT ON THE FACTS OF THIS CASE. 11. TO SUM UP, THE APPEAL OF THE ASSESSEE IS ALLOWE D, AND APPEAL OF THE ASSESSING OFFICER IS DISMISSED. ORDER PRONOUNCED UNDER RULE 3 4(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON TH E NOTICE BOARD. CONSIDERING THE ABOVE, WE EXPRESS TO PRONOUNCE THE ORDER BEYOND THE PERIOD OF 90 DAYS. ACCORDINGLY, WE PROCEED TO PRONOUNCE TH E ORDER AS ON DATE. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. SD/- SD/- (MADHUMITA ROY) (WASEEM AH MED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 01/06/2020 THIS ORDER PRONOUNCED IN OPEN COURT 01/06/2020 ITA NO. 414/RJT/15 [DCIT VS. M/S. TIRTH AGRO TECHNOLOGY PVT. LTD.] A.Y. 2012-13 - 15 - TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. $ / ASSESSEE 3. ) *+ , / CONCERNED CIT 4. ,- / CIT (A) 5. 012 33*+, *+#, 56$)$ / DR, ITAT, AHMEDABAD 6. 289 : / GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT