M/s. Vaibhavi Enterprises, Raipur, RAIPUR (CG) V. Dy.Commissioner of Income Tax, Circle,1(1), RAIPUR (CG)

ITA 43/BIL/2011

• Counselvise Citation: 4324714 RSA 2011
• Duration Of Justice: 3 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 10-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Section: 234B

Judgement Text

INCOME TAX APPELLATE TRIBUNAL,BENCH -RAIPUR . .. . . .. . , ,, , ! ! ! !, ,, , . .. . . .. . BEFORE S/SH.H.L.KARWA,PRESIDENT AN D RAJENDRA,ACCOUNTANT MEMBER ./ ITA NO.43/BLPR/2011- # # # # / // / ASSESSMENT YEAR -2007 M/S. VAIBHAVI ENTERPRISES, 5A, MARUTI ENCLAVE, TATIBANDH, RAIPUR. PAN:AAFFV 4901 Q V/S. DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), RAIPUR. ( ) / // / APPELLANT ) ( *+) / RESPONDENT ) ASSESSEE BY : NONE (WRITTEN SUBMISSIONS) REVENUE BY : SH. D.K. JAIN, SR. DR - /DATE OF HEARING : 16-12-2014 - /DATE OF PRONOUNCEMENT : 16-12-2014 # # # # , 1961 1961 1961 1961- - - - 254 254254 254( (( (1 11 1) )) ) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM < << < = = = =, ,, , ! ! ! ! : CHALLENGING THE ORDER DT.11.11.2010 OF THE CIT(A)-, RAIPUR,THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD. CIT(APPEALS) IS BAD IN LAW AND ON FACTS. 2. THE LD. CIT(A) ERRED IN SUSTAINING DISALLOWANCE OF RS.3,00,000/- UNDER THE HEAD CONTRACT EXPENSES (LABOUR). 3. THAT THE APPELLANT DENIES ITS LIABILITY TO INTEREST CHARGED U/S. 234B OF THE IT ACT, 1961. 4. THAT ANY OTHER RELIEF/DEDUCTION, WHICH THE HONBLE COURT MAY DEEM FIT BE GRANTED TO YOUR APPELLANT. ASSESSEE-FIRM IS AN ELECTRICAL CONTRACTOR AND HAD F ILED ITS RETURN OF INCOME ON 31.10.2006 DISCLOSING TOTAL INCOME OF RS.9.35 LACS.THE ASSESSI NG OFFICER (AO) COMPLETED THE ASSESSMENT ON 19.12.2008 DETERMINING THE INCOME OF THE ASSESSEE A T RS.19,46,420/-. 2. THE SOLITARY EFFECTIVE GROUND OF APPEAL FILED BY TH E ASSESSEE IS ABOUT DISALLOWANCE OF EXPENSES UNDER THE HEAD CONTRACT EXPENSES.DURING THE ASSESSM ENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD SHOWN CONTRACT RECEIPTS OF RS.2.23 CRO RES, THAT IT HAD CLAIMED LABOUR PAYMENT OF RS.69.58 LACS AND THE SAME WORKED OUT TO MORE THAN 31% OF THE RECEIPTS. HE FOUND THAT THE CLAIM MADE BY THE ASSESSEE WAS NOT SUPPORTED BY PROPER AN D AUTHENTICATED VOUCHERS. THE AO GAVE SOME EXAMPLES ABOUT THE VOUCHERS, FOR EXAMPLE, VOUC HER OF RS.27,510/- DATED 14.04.2005 AND VOUCHER DATED 08.10.2005 OF RS.50,500/-. IT WAS FOU ND THAT THE ASSESSEE HAD EITHER NOT PRODUCED THE VOUCHERS OR THE VOUCHER WAS NOT GENUINE,THAT IT HAD NOT KEPT MUSTER ROLL OR LABOUR PAYMENT REGISTER.IT WAS FURTHER FOUND THAT THE LABOUR EXPEN SE,I.E.,CONTRACT EXPENSES ON LABOUR WERE NOT VERIFIABLE.THEREFORE, IN ABSENCE OF VERIFICATION,TH E AO DISALLOWED 10% OF THE EXPENSES AMOUNT - ING TO RS.6,95,863/- FOR THE YEAR UNDER CONSIDERATI ON. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).AFTER CONSIDERING THE EXPLANATION O F THE ASSESSEE AND THE ASSESSMENT ORDER AND CONSIDERING THE NATURE OF BUSINESS AND THE EXPENSES INCURRED, THE FAA RESTRICTED THE DISALLOWANCE TO RS.3,00,000/- AND GAVE RELIEF OF RS.3.95 LACS TO THE ASSESSEE. BEFORE US, NOBODY APPEARED ON BEHALF OF THE ASSESSE E, HOWEVER, WRITTEN SUBMISSIONS WERE MADE. IT HAS BEEN STATED IN THE SUBMISSIONS THAT THE AO H AD FAILED TO POINT OUT THE ITEM OF EXPENDITURE 2 ITA NO. 43/BLPR/2011-VAIBHAVI ENTERPRISES WHICH WERE UN-VOUCHED OR UNVERIFIABLE,THAT THE PERC ENTAGE OF LABOUR EXPENSES TO THE RECEIPTS WAS LOWER BY 1.81% AS COMPARED TO THE IMMEDIATE PRECEDI NG YEAR, THAT THE DISALLOWANCE MADE BY THE AO WAS WITHOUT ANY POSITIVE FINDING THAT THE EXPENS ES WERE NON-GENUINE, THAT NO SPECIFIC DEFECT WAS POINTED.THE DEPARTMENTAL REPRESENTATIVE(DR)SUPP ORTED THE ORDER OF THE REVENUE AUTHORITIES. 4. WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. W E FIND THAT THE ASSESSEE HAD CLAIMED ALMOST 1/3 OF ITS EXPENDITURE UNDER THE HEAD LABOUR EXPEN SES, THAT MUSTER ROLLS/ATTENDANCE SHEETS WERE NOT PRODUCED BEFORE THE AO FOR VERIFICATION, THAT T HE AO HAD MADE DISALLOWANCE OF 10% OF THE TOTAL EXPENDITURE CLAIMED TO HAVE BEEN INCURRED BY IT, THAT THE FAA HAD REDUCED THE ESTIMATED DISALLOWANCE TO RS.3,00,000/-. AS THE ASSESSEE HAD NOT PROVED THE INCURRING OF ENTIRE EXPENDITURE BEFORE THE AO OR FAA WITH SUPPORTING DOCUMENTARY EV IDENCE, SO THEY WERE JUSTIFIED IN MAKING AN ADDITION FOR UNVERIFIABLE EXPENDITURE. WE ARE OF THE OPINION THAT THE DISALLOWANCE ARE AT HIGHER SIDE.TO MEET THE END OF JUSTICE, WE ARE REDUCING TH E DISALLOWANCE TO RS.1,50,000/- ONLY AND THUS THE ASSESSEE GETS RELIEF OF EQUAL AMOUNT. THE DECIS ION IS RESTRICTED TO THE PECULIAR FACTS OF THE CASE UNDER CONSIDERATION.AS A RESULT, THE EFFECTIVE GROU ND OF APPEAL FILED BY THE ASSESSEE IS DECIDED IN ITS FAVOUR, IN PART. 5. THE SECOND GROUND OF APPEAL IS ABOUT CHARGING OF IN TEREST U/S. 234B OF THE ACT. IN OUR OPINION, IT IS CONSEQUENTIAL IN NATURE, THEREFORE, IT IS NOT BE ING ADJUDICATED. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. > > > > #> #> #> #> @ @@ @ A A A A - -- - . ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DECEMBER,2014. - E 16 F ,2014 - . SD/- SD/- (H.L.KARWA/ . .. . . .. . ) ( ! ! ! ! / RAJENDRA) PRESIDENT/ = = = = /ACCOUNTANT MEMBER /RAIPUR. F DATE: 16.12.2014 - -- - *#GH *#GH *#GH *#GH IH IH IH IH / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / ) 2. RESPONDENT / *+) 3. THE CONCERNED CIT(A)/ J K , 4. THE CONCERNED CIT / J K 5. DR ITAT,RAIPUR BENCH/ H *## , . . . , 6. GUARD FILE/ . +H *# //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, RAIPUR.