SATYENDRA SINGH, MUMBAI V. ACIT CIRCLE-32(3), MUMBAI

ITA 4633/MUM/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9691 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2012-2013
• Appeal Filed On: 27-07-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: LILADHAR PANSARIA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 43B; 143(3); 142(1); 40(a)(ia)

Judgement Text

G IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SAK TIJIT DEY , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 4633 / MUM/2018 ( / ASSESSMENT YEAR : 2012 - 13 ) SAYENDRA SINGH D - 42, PUNARVASU CHS LTD., SEC TOR - 3, SHRISTI COMPLEX, OPP. SURYA SHOPPING CENTRE, MIRA ROAD EAST, THANE - 401107 / V. ACIT - 32(3) C - 11, R.NO. 108, 1 ST F LOOR, PRAYAKSHA KAR BHAVAN, B ANDRA K URLA C OMPLEX, BANDRA EAST, MUMBAI - 400051 ./ PAN : AMEPS3092A ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: LILADHAR PANSARIA REVENUE BY : SHRI. S.K. JAIN / DATE OF HEARING : 05.11 .2018 / DATE OF PRONOUNCEMENT : 14 .12 .2018 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER: THIS APPEAL , FILED BY ASSESSEE, BEING I.T.A. NO. 4633 / MUM/2018 , IS DIRECTED AGAINST APPELLATE ORDER DATED 15.12.2016 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 44 , MUMBAI (HEREINAFTER CALLED THE CIT(A)), FOR ASSESSMENT YEAR 2012 - 13 , THE APPELLATE PROCEEDINGS HAD ARISEN BEFORE LEARNED CIT(A) FROM ASSESSMENT ORDER DATED 31.03.2015 PASSED BY LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO) U/S 143 (3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) FOR ASSESSMENT YEAR 2012 - 13. I.T.A. NO.4633/ MUM/2018 2 2 . THE ASSESSEE IS AN INDIVIDUAL AND IS PROPRIETOR OF M/S JAGANNATH INDUSTRIAL SERVICE . THE SERVICES PROVIDED BY THE ASSESSEE ARE RELATING TO MANPOWER RECRUITMENT SERVICES . T HE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND RELEVANT NOTICES U/S. 143(2) AND 142(1) OF THE INCOME - TAX ACT,1961 (HEREINAFTER CALLED THE ACT) WERE ISSUED BY LEARN ED ASSESSING OFFICER ( HEREINAFTER CALLED THE AO) TO THE ASSESSEE AND IN RESPONSE THEREOF THE ASSESSEE APPEARED BEFORE THE AO FROM TIME TO TIME DURING SCRUTINY PROCEEDINGS . ON SCRUTINY OF A NNEXURE III FILED WITH THE TAX AUDIT REPORT, THE AO OBSERVED T HAT THE ASSESSEE HAS DEPOSITED EMPLOYEES CONTRIBUTION TO PF AND ESIC LATE AFTER THE DUE DATE OF SUCH PAYMENT UNDER THE RELEVANT ACT. THE DETAILS OF SUCH DELAYED DEPOSIT OF EMPLOYEES CONTRIBUTION TO PF AND ESIC AS ARE APPEARING IN THE ASSESSMENT ORDER FRAME D BY THE AO , ARE AS UNDER: - PROVIDENT FUND (THANE, KHAPOLI & JHARSUGUDA) AMOUNT (RS.) DUE DATE DATE OF PAYMENT 57262 15.08.2011 24.08.2011 58145 15.12.2011 20.12.2011 67753 15.01.2012 16.01.2012 62446 15.04.2012 17.04.2012 68109 15.12.2011 20.12.2011 64780 15.01.2012 16.01.2012 53211 15,04.2012 17.04.2012 28758 21.04.2012 25.04.2012 4,60,464 I.T.A. NO.4633/ MUM/2018 3 ESIC (JHARSUGUDA DIVISION): THE AO OBSERVED THAT AS PER AUDITOR REPORT UNDER SCHEDULE - 16, THE SAID AMOUNT OF RS. 5,36,805/ - IS INADMISSIBLE KEEPING IN VIEW PROVISION S OF SECTION 36(I)(V A) OF THE 1961 ACT, HENCE RS. 5,36,805/ - WAS ADDED TO THE INCO ME OF THE ASSESSEE U/S. 2(24)(X ) OF THE 1961 ACT , VIDE AS SESSMENT ORDER DATED 31.03.2015 PASSED BY THE AO U/S 143(3) OF THE 1961 ACT . THE ASSESSEE FILED FIRST APPEAL WITH LD. CIT(A) CHALLENGING ADDITIONS AS WERE MADE BY THE AO . H OWEVER , THE ASSESSEE DID NOT ENTERED APPEARANCE BEFORE LD. CIT(A) WHEN THE APPEAL WAS CALLED FOR HEARING ON THE FOLLOWING DATES BEFORE LEARNED CIT(A) , AS UNDER: - AMOUNT (RS.) DUE DATE DATE OF PAYMENT 17359 21.12.2011 11.05.2012 16523 21.01.2012 11.05.2012 15707 21.02.2012 11.05.2012 13180 21.03.2012 11.05.2012 13572 21.04.2012 11.05.2012 76341 DATE OF ISSUE OF NOTICE DATE FIXED FOR HEARING /ADJOURNED DATE REMARKS 09.05.2016 23. 05.2016 NO COMPLIANCE 17.10.2016 22.11. 2016 NO COMPLIANCE 23.11.2016 09.12.2016 NO COMPLIANCE I.T.A. NO.4633/ MUM/2018 4 T HE LD. CIT(A) ADJUDICATED THE APPEAL OF THE ASSESSEE WHICH STOOD DISMISSED ON ALL THE ISSUES RAISED BY THE ASSESSEE . THE ASSESSEE HAS FILED AN SECOND APPEAL WITH INCOME - TAX APPELLATE TRIBUNAL, MUMBAI. THE ASSESSEE HAS FILED THIS APPEAL LATE BY 93 DAYS. THE ASSESSEE HAS CONTENDED THAT THE ASSESSEE RECEIVED APPELLATE ORDER OF LD. CIT(A) ONLY ON 23 RD FEB 2018 . THE ASSESSEE HAS FILED AN AFFIDAVI T IN SUPPORT OF SAID CONTENTIONS WHICH IS PLACED IN FILE . THE ASSESSEE HAS ALSO SUBMITTED THAT ACCOUNTANT OF THE ASSESSEE WAS SUFFERING FROM HEART AILMENT AND HAD UNDERGONE BMV PROCEDURES ON 14 TH MARCH 2018. IT IS CLAIMED IN THE SAID AFFIDAVIT THAT THE ACC OUNTANT WAS THEREAFTER ON BEDREST AND HENCE DELAY IN FILING THIS APPEAL LATE BY 93 DAYS . THE APPEAL WAS FINALLY FILED ON 27.07.2018 WITH TRIBUNAL . THE ASSESSEE HAS FILED DISCHARGE SUMMARY FROM LOKMANYA TILAK MUNICIPAL COLLEGE AND GENERAL HOSPITAL , DEPART MENT OF CARDIOLOGY , IPD/OPD NO. 10543/34876 DATED 15 - 03 - 2018(DATE OF ADMISSION 13 - 03 - 2018) . THE SAID DISCHARGE SUMMARY IS PLACED IN FILE. THIS IS IN THE NAME OF MR LILADHAR PANSANIA (AGED 42 YEARS) , ACCOUNTANT OF THE ASSESSEE WHO ALSO ENTERED APPEARANCE BEFORE US AND ALSO IN EARLY HEARING APPLICATION HEARD BY ITAT. THE ASSESS EE HAS ALSO FILED MEDICAL REPORT S FROM TATA MEMORIAL CENTRE IN THE NAME OF MST. RISHAAN LILADHAR PANSANIA FOR THE PERIOD 02 - 02 - 2016 TO 13 - 07 - 2018 AND CONTENTIONS ARE MADE THAT ACCOU NTANTS SON WAS SUFFERING FROM BLOOD CANCER. THE RELEVANT MEDICAL DOCUMENTS ARE ENCLOSED AND PLACED IN FILE. IT IS CLAIMED THAT DUE TO MEDICAL DISTURBANCES IN THE FAMILY OF THE ACCOUNTANT OF THE ASSESSEE, IT PREVENTED ASSESSEES AR TO APPEAR BEFORE THE LD. CIT(A) AND ALSO IN LATE FILING OF THE APPEAL BEFORE THE TRIBUNAL. IT IS CLAIMED THAT APPEAL BY LEARNED CIT(A) WAS DISPOSED OF EX - PARTE AS THE ASSESSEE COULD NOT ENTER APPEARANCE DUE TO MEDICAL DISTURBANCES IN THE FAMILY OF ACCOUNTANT OF THE ASSESSEE AND TH E APPEAL OF THE ASSESSEE STOOD DISMISSED EX - PARTE BY LEARNED CIT(A). I T IS ALSO EXPLAINED THAT THE APPEAL WAS FILED LATE WITH THE TRIBUNAL DUE TO I.T.A. NO.4633/ MUM/2018 5 ABOVE CITED REASONS LATE BY 93 DAYS BEYOND TIME STIPULATED U/S 253(5) OF THE 1961 ACT . I T WAS PRAYED THAT DELAY IN FILING THIS APPEAL LATE WITH THE TRIBUNAL BE CONDONED . K EEPING IN VIEW THE ENTIRE FACTUAL MATRIX AND BONAFIDE EXIGENCY SHOWN BY THE ASSESSEE BY WAY OF HEART AILMENT OF ACCOUNTANT AND BLOOD CANCER OF HIS SON SUPPORTED BY MEDICAL DOCUMENTS WHICH IN OUR CONSIDERED VIEW WAS A SUFFICIENT CAUSE WHICH PREVENTED ASSESSEE FROM FILING THIS APPEAL LATE , WE TAKE A LIBERAL VIEW AND CONDONE DELAY OF 93 DAYS IN FILING THIS APPEAL LATE BEYOND THE TIME STIPULATED U/S 253(5) OF THE 1961 ACT AND WE ADMIT THIS APPEA L TO BE ADJUDICATED ON MERITS . ON THIS FIRST ISSUE AS DETAILED ABOVE, WE HAVE OBSERVED THAT THE AO HAS RECORDED IN ITS ASSESSMENT ORDER ABOUT THIS FACT THAT EMPLOYEE CONTRIBUTION TOWARDS PF AND ESI WAS DEPOSITED LATE WITH STATUTORY AUTHORITIES BUT ADMITTE DLY THE SAME WAS DEPOSITED PRIOR TO THE DUE DATE OF FILING OF RETURN OF INCOME AS PRESCRIBED U/S 139(1) OF THE 1961 ACT : PROVIDENT FUND (THANE, KHAPOLI & JHARSUGUDA) AMOUNT (RS.) DUE DATE DATE OF PAYMENT 57262 15.08.2011 24.08.2011 58145 15.12.2011 20.12.2011 67753 15.01.2012 16.01.2012 62446 15.04.2012 17.04.2012 68109 15.12.2011 20.12.2011 64780 15.01.2012 16.01.2012 53211 15,04.2012 17.04.2012 28758 21.04.2012 25.04.2012 4,60,464 I.T.A. NO.4633/ MUM/2018 6 ESIC (JHARSUGUDA DIVISION): THUS, ADMITTEDLY THE SAID EMPLOYEE CONTRIBUTION OF PF/ESI WAS DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) OF THE 1961 ACT. THUS, KEEPING IN VIEW DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. GHATGE PATIL TRANSPORTS LIMITED (2014) 368 ITR 749(BOM.), WE ALLOW THIS CLAIM OF THE ASSESSEE. WE ORDER ACCORDINGLY. 3. T HE SECOND DISALLOWANCE CONCERN ITSELF WITH DISALLOWANCE OF PROFESSIONAL FEE PAID OF RS. 23340/ - ON THE GROUNDS THAT INCOME TAX DEDUCTED AT SOURCE OF RS. 2,33 4/ - U/S 194J OF THE 1961 ACT WAS NOT DEPOSITED BY THE ASSESSEE, KEEPING IN VIEW PROVISION OF SECTION 40(A)(IA) OF THE 1961 ACT . THE ASSESSEE HAS CONTENDED THAT THE LIMIT OF NON DEDUCTION OF INCOME - TAX AT SOURCE U/S. 194J DURING THE RELEVANT PERIOD WAS RS. 30,000/ - FOR EACH PAYEE DURING THE ENTIRE YEAR AND SINCE THE PAYMENT OF PROFESSIONAL FEES WAS MADE TO THE TUNE OF RS. 23,340/ - , INCOME TAX WAS DEDUCTED WRONGLY AT SOURCE WHILE NO SUCH TDS OUGHT TO HAVE BEEN DEDUCTED BY THE ASSESSEE AS THE SAID AMOUNT AMOUNT (RS.) DUE DATE DATE OF PAYMENT 17359 21.12.2011 11.05.2012 16523 21.01.2012 11.05.2012 15707 21.02.2012 11.05.2012 13180 21.03.2012 11.05.2012 13572 21.04.2012 11.05.2012 76341 I.T.A. NO.4633/ MUM/2018 7 WAS LOWER THAN THE THRESHOLD LIMIT AS PRESCRIBED U/S 194J OF THE 1961 ACT. WE HAVE OBSERVED THAT THE TOTAL PROFESSIONAL FEES PAID BY THE ASSESSEE WAS RS. 62,250/ - DURING THE YEAR UNDER CONSIDERATION. HOWEVER, AS PER FACTS EMANATING FROM RECORDS AS ARE AVAILAB LE IN THE FILE BEFORE US , IT IS NOT CLEAR THAT WHO WERE THE PAYEES TO WHOM THE ASSESSEE HAD MADE PAYMENT OF RS. 23,340/ - ON WHICH INCOME - TAX WAS DEDUCTED AT SOURCE U/S 194J OF THE 1961 ACT . IT IS EQUALLY NOT AVAILABLE ON RECORD , THE BREAK - UP PAYEE WISE O F TOTAL PROFESSIONAL FEES PAID BY THE ASSESSEE OF RS. 62,250/ - AND WHETHER PROVISION S OF SECTION 194J ARE HIT OR NOT AS IF THE SAME PAYEE IS PAID ABOVE THRESHOLD LIMIT IN AGGREGATE IN A YEAR, THE PROVISIONS OF SECTION 194J READ WITH SECTION 40(A)(IA) OF T HE 1961 ACT GOT HIT. THUS, UNDER THESE CIRCUMSTANCES WE ARE INCLINED TO RESTORE THIS ISSUE BACK TO THE FILE OF THE AO AND THE ASSESSEE HAS TO DEMONSTRATE THE FACTUAL MATRIX ON MERITS TO TAKE IT OUT OF CLUTCHES OF PROVISIONS OF SECTION 194J OF THE 1961 ACT. THE AO SHALL ADJUDICATE THIS ISSUE AFRESH ON MERITS AFTER CONSIDERING FACTUAL MATRIX OF THE CASE AND ANALYSING THE COMPOSITION OF PROFESSIONAL FEE OF RS. 62,250/ - PAYEE WISE TO COME TO CONCLUSION AS TO APPLICABILITY OF PROVISIONS OF SECTION 194J READ WITH SECTION 40(A)(IA) OF THE 1961 ACT . THE AO SHALL PROVIDE PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW AND ADMIT ALL RELEVANT EVIDENCES IN THIS REGARDS SUBMITTED BY AS SESSEE IN ITS DEFENCE IN THE DENOVO PROCEEDINGS . WE ORDER ACCORDINGLY. 4. THE NEXT ISSUE CONCERN ITSELF WITH NON - PAYMENT OF SERVICES TAX OF RS. 15,87,630/ - WHICH IT IS CLAIMED WAS PAID AFTER THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) , WHICH FELL ON 3 0TH SEPTEMBER 2012. I T IS CLAIMED THAT THE SERVICES TAX WAS FINALLY PAID ON 3 RD OCT, 2012 AS AGAINST DUE DATE OF FILING OF RETURN OF INCOME BEING 30.09.2012 U/S 139(1) OF THE 1961 ACT AND HENCE IT IS HIT BY PROVISION OF SECTION 43B OF THE 19 61 ACT. THE LEARNED COUNSEL FOR THE ASSESSEE FAIRLY ADMITTED BEFORE US THAT THIS DISALLOWANCE IS TO BE UPHELD , I.T.A. NO.4633/ MUM/2018 8 KEEPING IN VIEW T HAT THERE IS AN INFRINGEMENT OF SECTION 43B AS ADMITTED BY THE ASSESSEE IN PAYING THE SERVICE TAX LATE BEYOND THE DUE DATE OF F ILING OF RETURN OF INCOME AS PRESCRIBED U/S 139(1) , WE UPHOLD THE AFORESAID DISALLOWANCE. WE ORDER ACCORDINGLY. 5 . THE NEXT ISSUE CONCERNS ITSELF WITH LABOUR PAYMENTS . TH E AO OBSERVED THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF RS. 1,44,87,840/ - AS SUNDRY C REDITORS . T HE ASSESSEE WAS ASKED TO EXPLAIN THE SAME BY THE AO DURING ASSESSMENT PROCEEDINGS CONDUCTED BY THE AO U/S 143(3) READ WITH SECTION 143(2) OF THE 1961 ACT. THE ASS E SSEE SUBMITTED THAT THESE PAYABLE ARE ON ACCOUNT OF SALARY AND W AGES PAYABLE FOR JHARSUGUDA (OR IS SA ), KHOPOLI & THANE (MAHARASHTRA). THE AO OBSERVED THAT AN AMOUNT OF RS. 1,30,86,113/ - WAS OUTSTANDING SALARY AND WAGES PAYABLE FOR JHARSUGUDA (OR I SS A) . THE AO ALSO OBSERVED THAT HUGE AMOUNT OF LABOUR PAYMENTS WERE PAID IN THE MONTH OF MA RCH FOR JHARSUGUDA AND PAYMENTS WERE MADE IN CASH . THE AO OBSERVED THAT ONLY RS. 40 LACS CASH WA S WITHDRAWN FROM JHARSUGUDA (OR IS S A) BRANCH WHILE IT WAS OBSERVED BY THE AO THAT THE CASH WAS WITHDRAWN FROM BRANCHES IN MAHARASHTRA AND IT IS CLAIMED BY THE ASSESSEE THAT CASH WAS CARRIED PERSONAL LY TO JHARSUGUDA (OR IS S A) FROM MAHARASHTRA WHICH CONTENTION OF THE ASSESSEE WAS R EJECTED BY THE AO. THE AO ALSO OBSERVED THAT LA RGE AMOUNT OF LABOUR CHARGES WERE BOOKED IN THE MONTH OF MARCH AND NAME S OF LABOUR ER , THEIR ADDRESSES AND IDS W ERE NOT PRODUCED . THE AO DISALLOWED 30% OF THE OUTSTANDING SALARY AND LABOUR PAYMENTS I.E. 30% OF RS. 1,44,87,840/ - WHICH COMES TO RS. 43,46,352/ - , VIDE ASSESSMENT ORDER DATED 31.03.2015 PASSED BY THE AO U/ S 143(3) OF THE 1961 ACT . THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) WHICH STOOD DISMISSED BY LEARNED CIT(A) AS THERE WAS NON - APPEARANCE OF THE ASSESSEE BEFORE THE LD. CIT(A) , VIDE APPELLATE ORDER DATED 15.12.2016 PASSED BY LEARNED CIT(A) . T HE ASSESSEE HAS NOW FILED AN APPEAL BEFORE THE TRIBUNAL. I.T.A. NO.4633/ MUM/2018 9 6. THE ASSESSEE HAS NOW TRIED TO JUSTIFY ITS STAND BEFORE US THAT IT HAS TO WORK IN JHARSUGUDA (OR IS S A) DISTRICT WHICH IS A VERY DIFFICULT DISTRICT IN REMOTE AREA OF ORISSA AND AN AREA VERY DIF FICULT TO WORK . I T IS SUBMITTED THAT ASSESSEE HAS GOT CONTRACT FROM VED ANTA ALUMINIUM LTD. FOR RENDERING OF SERVICES IN THEIR INDUSTRIAL UNIT FOR WHICH LOCAL LABOUR ERS ARE TO BE EMPLOYED WHO ARE TO BE PAID IN CASH ONLY. IT IS SUBMITTED THAT UNDER THESE EX TREME DIFFICULT CIRCUMSTANCES , THE ASSESSEE HAS TO OPER ATE. IT IS CLAIMED THAT THE ASSESSEE HAD WITHDRAWN CASH FROM BANK BRANCHES IN MAHARASHTRA AND THEN IT WAS CARR IED TO JHARSUGUDA (ORISSA) FOR MAKING PAYMENT. THE LD. AR ALSO SUBMITTED THAT THERE IS AN INCREASE IN TURNOVER OF THE ASSESSEE DUE TO THIS CONTRACT AND IT IS PRAYED THAT THE MATTER BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION WHEREIN THE ASSESSEE WILL BE ABLE TO PRODUCE RELEVANT RECORDS AND TO JUSTIFY THAT THIS LABOUR EXPENS ES ARE GENUINE PAYMENTS CONNECTED WITH THE SAID JHARSUGUDA (O R IS S A) CONTRACT . THE LD. DR OBJECTED AND SUBMITTED THAT ONLY RS. 40,00,000/ - WAS WITHDRAWN FROM THE BANK IN JHARSUGUDA (OR IS S A) AND IT IS NOT POSSIBLE THAT CASH OF SUCH HUGE MAGNITUDE CAN BE C ARRIED FROM MUMBAI/MAHARASHTRA TO JHARSUGUDA (ORISSA ) IF SEEN ON TOUCHSTONE OF PREPONDERANCE OF PROBABILITIES. . THE LEARNED DR ALSO CLAIMED THAT NET PROFIT IN THIS YEAR HAS FALLEN TO 5.6% FROM PRECEDING YEAR 6.54% DESPITE INCREASE IN TURNOVER. I T IS SUBM ITTED THAT THE AO HAS DOUBTED THE SE PAYMENTS MADE BY THE ASSESSEE TOWARDS LABOUR EXPENSES. IT WAS ALSO SUBMITTED BY LEARNED DR THAT HOW IT IS POSSIBLE THAT SUCH AN HUGE AMOUNT IS INCURRED AS WAGES/OVERTIME FOR MONTH OF MARCH 2012 . 7 . WE HAVE CONSIDERED R IVAL CONTENTION S AND PERUSED THE MATERIAL ON RECORD. W E HAVE OBSERVED THAT THE ASSESSEE IS AN INDIVIDUAL AND PROPRIETOR OF M/S JAGANNATH INDUSTRIAL SERVICE AND IN THE BUSINESS OF MANPOWER RECRUITMENT SERVICES. THE ASSESSEE HAS GOT CONTRACT FROM VEDANTA AL UMINIUM LTD. FOR SERVICES IN CONNECTION WITH THEIR JHARSUGUDA (OR I SS A) INDUSTRIAL UNIT FOR WHICH LABOUR WAS STATED TO I.T.A. NO.4633/ MUM/2018 10 HAVE BEEN ENGAGED . WE ARE OBSERVED THAT THE ASSESSEE HAS PAYABLE OF RS. 1.3 1 CRORE S AS ON 31 ST MARCH TOWARDS SALARY AND WAGES FROM JHARSUGUDA BRANCH , WHICH WAS CONSIDERED HIGHER BY THE AO AND GENUINENESS OF THE SAME WAS DOUBTED BY THE AO AS THE ASSESSEE COULD NOT JUSTIFY THESE EXPENSES WITH LABOUR ERS NAMES, IDS AND ADDRESSES ETC. . AT THE SAME TI ME , THE ASSESSEE HAS ONLY WITHDRAWN RS. 40,00,000/ - FROM JHARSUGUDA (OR I SSA) BANK BRANCHES , WHILE REST OF THE WITHDRAWAL WAS DONE FROM BANK BRANCHES IN MAHARASHTRA. THE AO DISBELIEVE D THE CONTENTION S OF THE ASSESSEE T HAT IT PHYSICALLY CARRIED HUGE CAS H FROM MAH ARASHTRA TO JHARSUGUDA, ORISSA FOR MAKING PAYMENTS TO LABOUR , BUT THE FACTS ALSO REMAIN S THAT THE ASSESSEE HAS GOT CONTRACT FROM VEDANTA ALUMINIUM LTD. INDUSTRIAL UNIT AT JHARSUGUDA (OR IS S A) FOR WHICH IT IS STATED BY THE ASSESSEE THAT IT ENGAGE D LOCAL LABOUR AND ITS TURNOVER INCREASED . THE AO ON ITS PART ONLY DISALLOWED 30% OF LABOUR PAYMENT S WHILE REST STOOD ALLOWED DESPITE THE FACT THAT THE AO DOUBTED GENUINENESS OF THESE LABOUR PAYMENTS. THE ASSESSEE HAS ALSO CLAIMED THAT ITS TURNOVER HAD INCREASED BUT PROFIT RATIO FELL IN THIS YEAR COMPARATIVE TO PRECEDING YEAR. I N OUR CONSIDERED VIEW AND IN ALL FAIRNESS TO BOTH THE PARTIES, THE ASSESSEE DESERVE ONE MORE OPPORTUNITY AS THE APPELLATE ORDER OF THE LEARNED CIT(A) WAS ALSO AN EX - PARTE ORDER , FOR WHATEVER REASONS THE ASSESSEE COULD NOT AVAIL AN OPPORTUNITY TO EXPLAIN ITS CASE BEFORE LEARNED CIT(A) . THE POWERS OF LEARNED CIT(A) ARE CO - TERMINUS WITH POWERS OF THE AO AND IF ANY INJUSTICE WAS METED TO THE ASSESSEE BY THE AO , SAME COULD HAVE BEE N RECTIFIED BY THE LEARNED CIT(A) BUT IN THE INSTANT CASE FOR WHATEVER REASONS THE APPELLATE ORDER OF LEARNED CIT(A) IS AN EX - PARTE ORDER. THUS, IN THE INTEREST OF JUSTICE AND IN ALL FAIRNESS TO BOTH THE PARTIES, WE ARE RESTORING THIS MATTER BACK TO THE F ILE OF THE AO FOR FRESH ADJUDICATION . THE ASSESSEE WILL BE ALLOWED THE FILE ALL NECESSARY EVIDENCES IN SUPPORT OF ITS CONTENTION WHICH SHALL BE ADMITTED BY THE AO IN THE INTEREST OF JUSTICE . THE AO SHALL PROVIDE PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE INTEREST OF JUSTICE IN DENOVO PROCEEDINGS. WE ORDER ACCORDINGLY. I.T.A. NO.4633/ MUM/2018 11 8 . THUS, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 1 4 .1 2 .2018. 1 4 .12 .2018 S D / - S D / - ( SAKTIJIT DEY ) (RAMIT KOCHAR) JUDICI AL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 1 4 .1 2 .2018 NISHANT VERMA SR. PRIVATE SECRETAR Y COPY TO 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) CONCERNED, MUMBAI 4 . THE CIT - CONCERNED, MUMBAI 5 . THE DR BENCH, 6 . MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI