Jagadish Das, Kolkata V. DCIT, CIR-50, KOLKATA, Kolkata

ITA 419/KOL/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3236 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 16-04-2015
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Application of stay; Additional evidence; Non compliance
• Section: 143(3); 194C; 147

Judgement Text

SP. NO.01/KOL/2016 ITA NO.419/KOL/2015 JAGADISH DAS-B-AM 1 IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, KOLKATA BEFORE : SHRI MAHAVIR SINGH, JUDICIAL MEMBER, A ND SHRI M. BALAGANESH, ACCOUNTANT MEMBER S.P NO. 01/KOL/2016 [ ARISING OUT OF I.T.A NO. 419/KOL/2015 A.Y 2008-09 ] JAGADISH DAS VS. D.C.I.T, CIRCLE-50, KOLKA TA PAN: ADTPD 4128J (APPLICANT) (RE SPONDENT) I.T.A NO. 419/KOL/2015 A.Y 2008-09 JAGADISH DAS VS. D.C.I.T, CIRCLE-50, KOLKA TA PAN: ADTPD 4128J (APPELLANT) (RE SPONDENT) FOR THE APPLICANT/APPELLANT: SHRI B.B PAYRA, ADVOCATE, LD.AR FOR THE RESPONDENT : SHRI SAUR AV KUMAR, JCIT/ LD. SR. DR DATE OF HEARING: 05-02-2016 DATE OF PRONOUNCEMENT: 05 -02-2 016 ORDER SHRI M.BALAGANESH, AM S.P NO. 01/KOL/2016 THIS STAY PETITION CAME UP FOR HEARING TODAY SEEKIN G FOR STAY OF DEMAND OF RS. 25,00,000/- IS PREFERRED BY THE ASSESSEE FOR THE AS SESSMENT YEAR 2008-09. DURING THE COURSE OF HEARING THE BENCH DECIDED TO TAKE UP THE MAIN APPEAL FOR ADJUDICATION INSTEAD OF STAY PETITION FILED BY THE ASSESSEE. HENCE, THE MAIN APPEAL IN ITA NO. 419/KOL/2015 IS HEREBY TAKEN UP FOR HEARING. SP. NO.01/KOL/2016 ITA NO.419/KOL/2015 JAGADISH DAS-B-AM 2 ITA NO. 419/KOL/2015 FOR THE A.Y 2008-09 ( BY THE A SSESSEE ) 2. THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE OR DER OF THE LEARNED CIT(A)-15, KOLKATA IN APPEAL NO. 38/CIT(A)-15/14-15/CIR-50/KOL DATED 13-01-2015 FOR THE ASST YEAR 2008-09 AGAINST THE ORDER OF ASSESSMENT FRAME D BY THE LEARNED AO U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT). 3. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL OF THE ASSESSEE IS AS TO WHETHER THE DISALLOWANCE U/S. 40(A)(IA) OF THE ACT COULD BE M ADE IN THE SUM OF RS.1,43,74,884/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSES SEE IS AN INDIVIDUAL ENGAGED IN JOB WORK OF JEWELLERY ORNAMENTS. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 WAS FILED ON 26-09-2008 DECLARING TAXABLE INCOME A T RS.13,79,973/-. THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACTON 31-12-2010. LATER, THE ASSESSMENT WAS SOUGHT TO BE REOPENED U/S. 147 OF THE ACT FOR THE PURPOSE OF MAKING OF DISALLOWANCE U/S. 40(A)(IA) OF THE ACT. THE RE-ASSESSMENT WAS COMPLET ED ON 10-03-2014, WHEREIN A SUM OF RS.1,43,74,884/- WAS DISALLOWED U/S. 40(A)(IA) TOWARDS LABOUR CHARGES PAID BY THE ASSESSEE TO VARIOUS KARIGARS FOR NON COMPLIANCE OF TDS PROVISIONS IN TERMS OF SECTION 194C OF THE ACT. ON 1 ST APPEAL, BEFORE THE LD. CIT(A), THE LD.AR SOUGHT T O EXPLAIN THAT THE LABOUR PAYMENTS ARE MADE TO TWO TYPES TO FOLLOW ING PEOPLE :- A. OWN SMITHS : THAT IS THE LABOUR DIRECTLY EMPLO YED BY THE ASSESSEE ONLY, AND B. FLYING SMITHS: THE LABOUR HIRED ON PERIODIC BASI S DEPENDING ON THE WORK LOAD. 4.1 THE LD. A/R CLAIMED THAT FOR THE PAYMENT TOWA RDS OWN SMITH TOTALING TO RS.16,19,420/- AND FLYING SMITHS OF RS. 1,27,55,46 4/- THE PROVISIONS OF SECTION 194C OF THE ACT WERE INAPPLICABLE TO THE ASSESSEE. THE A SSESSEE SOUGHT TO FILE A LIST OF 735 NAMES AND ADDRESSES WITH JOB WORK REFERENCE DATE AN D AMOUNT PAID TO THE FLYING SMITHS IN COMPUTERIZED FORM. THE LD. CIT(A) OBSERVE D THAT THE ASSESSEE CANNOT EXPLAIN THE PREMISES WHERE THE LABOUR USED TO WORK ON THE GOLD ORNAMENTS AND SP. NO.01/KOL/2016 ITA NO.419/KOL/2015 JAGADISH DAS-B-AM 3 WHETHER ANY SECURITY WAS TAKEN FROM THEM. HE ALSO OBSERVED IN HIS ORDER THAT IN THE SAID LIST OF 735 PERSONS THERE WERE MANY NAMES TH AT WERE REPEATED. THE MODE OF PAYMENT WAS ALSO NOT EXPLAINED BY THE ASSESSEE. ACC ORDING TO THE LD. CIT(A) THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE THAT THE GO LD WAS GIVEN TO THE FLYING SMITH AND TAKEN UP FROM THEM FOR JOB WORK. NO BOOKS OF AC COUNT EVIDENCING THE SAME WAS PRODUCED. HE ALSO OBSERVED IN HIS ORDER THAT THE EN TIRE LIST BEING THE ADDITIONAL EVIDENCES WERE FILED BEFORE HIM FOR THE FIRST TIME IN TERMS OF SECTION 46A OF THE I.T RULES. THUS, HE REFUSED TO ADMIT THE SAME. THE LD. CIT(A) HAS HELD THAT THE ASSESSEE HAS GOT THE ORNAMENT WORK DONE ONLY THROUGH CONTR ACTORS AND SUB-CONTRACTORS AND NO TDS WAS EFFECTED BY THE ASSESSEE IN TERMS OF PROVIS IONS OF SECTION 194C OF THE ACT. ACCORDINGLY, HE UPHELD THE ORDER OF THE LD.AO IN MA KING ADDITION BEING NON DEDUCTION OF TDS U/S. 40(A)(IA) OF THE ACT. AGGRIEV ED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS :- 1. THAT THE ORDER OF THE HON'BLE CIT (A) IS BAD IN LAW AS THERE WAS NO REASONABLE OPPORTUNITY PROVIDED BY THE HON'BLE CIT CONSIDERING THE FACTS OF THE CASE. 2. THAT THE ORDER OF THE CIT (A) AND THE ASSESSMENT IS BAD IN LAW AS THE HON'BLE CIT MADE IT FLAGRANTLY VIOLATING THE PRINCI PLE OF NATURAL JUSTICE. 3. THAT THE CIT (A) WAS NOT CORRECT IN CONFIRMING T HE ORDER OF ADDITION OF RS. 1,43,74,884/- PASSED BY LD. DCIT DUE TO NON-DED UCTION OF TDS U/S 40(A)(IA) WITHOUT CONSIDERING THE FACTS AND FIGURE PLACED BY THE APPELLANT. 4. THAT THE APPELLANT BEGS THE LIBERTY TO FURTHER M ODIFY, ALTER, WITHDRAW OR ADD ANY NEW GROUNDS OF APPEAL ON OR BEFORE THE FINA L HEARING. 4.2 THE LD.AR ARGUED THAT THE ENTIRE LIST OF VARIO US KARIGARS FOR THE JOB WORKS WERE GIVEN. THE ASSESSEE GOT ORNAMENTS FROM THEM FOR JO B WORK DONE AND DULY FILED THE SAME BEFORE THE LD. CIT(A). IT WAS ALSO STATED TH AT NO PAYMENT WAS MADE IN EXCESS OF RS. 20,000/- TO ANY PARTY. HE ALSO ARGUED THAT NO F INDING WAS GIVEN BY THE LD. CIT(A) WITH REGARD TO THIS FACT THAT PAYMENT EXCEEDING RS. 20,000/- WAS NOT MADE BY THE ASSESSEE. HOWEVER, HE FAIRLY CONCEDED THAT SINCE TH E DETAILS WERE NOT AVAILABLE BEFORE SP. NO.01/KOL/2016 ITA NO.419/KOL/2015 JAGADISH DAS-B-AM 4 THE LD.AO FOR EXAMINATION, HE PRAYED BEFORE US FO R SET ASIDE THE ISSUE TO THE FILE OF THE LD.AO TO EXAMINE THE ENTIRE LIST OF VARIOUS KARIGAR S AND PAYMENTS MADE THEREON FOR THE JOB WORK DONE BY THEM. IN RESPONSE TO THIS, THE LD. SR.DR FAIRLY CONCEDED FOR SETTING ASIDE THE ISSUE TO THE FILE OF THE LD.AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DEEM IT FIT AND APPROPRIATE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, TO SET ASIDE THE ISSUE TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH THE LAW AFTER AF FORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE FOR VERIFICATION OF VA RIOUS DOCUMENTS AS SUBMITTED BY THE ASSESSEE. ACCORDINGLY, THE GROUNDS RAISED BY THE A SSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE AND STAY PETITION FILED BY THE ASSESSEE IS DISMISSED AS IN FRUCTUOUS. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 05-02 - 2016 1.. THE APPELLANT: SHRI JAGADISH DAS 203 R.N TAGOR E ROAD, KOL-77. 2 THE RESPONDENT- THE DCIT, CIR-50, MANICKTALA CIV IC CENTRE, UTTARAPAN, SHOPPING COMPLEX, DS-II 2 ND FL., ULTADANGA, KOL-54. 3 /THE CIT, 4.THE CIT(A ) SD/- ( MAHAVIR SINGH, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE: DATE 05-02-2016 COPY OF THE ORDER FORWARDED TO:- SP. NO.01/KOL/2016 ITA NO.419/KOL/2015 JAGADISH DAS-B-AM 5 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS