ACIT 24(1), MUMBAI V. COLOR IMAGE, MUMBAI

ITA 5/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3359 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 14-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OM NANGSEN
• Assessee Lawyers: N R AGARWAL
• Keywords: Principle of natural justice; Wrong claim; Bad and doubtful debts
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER. ITA. NO. 5/MUM/2014 (ASSESSMENT YEAR:2009-10) A.C.I.T. 24(1), MUMBAI-400 051 APPELLANT VS. M/S. COLOR IMAGE S-3/304, SUNDER NAGAR, S.V.ROAD, MALAD (W), MUMBAI 400 064 RESPONDENT PAN: AAEFC4509L /BY APPELLANT : SHRI M. C. OM NANGSEN, D.R. /BY RESPONDENT: SHRI N. R. AGARWAL, A.R. /DATE OF HEARING : 29.08.2016 /DATE OF PRONOUNCEMENT : 31.08.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-34, MUMBAI, DA TED 17.10.2013 FOR A.Y. 2009-10 ON FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ESTIMA TED NET PROFIT ADDITION OF RS.1,77,73,250/- DESPITE THE ITA NO.5/MUM/14 A.Y. 09-10 [ACIT VS. M/S. COLOR IMAGE) PAGE 2 ASSESSEE FAILING TO EXPLAIN THE DRASTIC FALL IN THE G.P. AND N.P. RATIO AS COMPARED TO EARLIER YEARS. 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN NOT APPRECIATING TH E ISSUE OF INCREASE IN WAGES, SALARIES AND FACTORY EXPENSES DEALT BY THE AO, THEREBY INVOKING THE PROVISIONS OF SECTION 145 AS THE BOOKS OF ACCOUNTS WERE NOT FOUND RELIABLE AND HENCE REJECTED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITI ON OF RS.2,68,594/- MADE ON ACCOUNT OF DISCOUNT TO M/S. JAYPEE TECHNOPLAST DESPITE THE FACT THAT THE SAID DISCOUNT HAD BEEN ACCOUNTED FOR A.Y.2012-13 AND WRONG CLAIM HAS BEEN MADE IN A.Y.2009-10. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITIO N OF RS.2,50,000/- MADE ON ACCOUNT OF DISCOUNT/REBATE TO M/S. SUNBEAM MACHINE P. LTD. DESPITE THE FACT THAT THE SAID REBATE CLAIMED WAS RELEVANT TO A.Y.2010-11 AND WRONG CLAIM HAS BEEN MADE IN A.Y.2009-10. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE DISALLO WANCE OF WAGES OF RS.2,38,890/- DESPITE THE FACT THAT THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM OF PAYMEN T OF WAGES OF CONCERNED PERSONS. 2. ASSESSEE IS A PARTNERSHIP FIRM AND WAS ENGAGED I N THE BUSINESS OF MANUFACTURING CORRUGATED BOXES AND FOIL S. ASSESSEE FILED ITS RETURN OF INCOME U/S.139(1) ON 3 0.09.2009, DECLARING TOTAL INCOME OF RS.26,02,100/-. ASSESSIN G OFFICER SELECTED THE CASE OF ASSESSEE FOR SCRUTINY AND DETE RMINED ITS INCOME AT RS.1,41,35,950/- AFTER REJECTING THE BOOK S OF ACCOUNT OF ASSESSEE U/S.145(3) OF THE ACT AND ESTIM ATED HIGHER NET PROFIT OF 35.55% OF SALES TURNOVER AND ALSO MAK ING CERTAIN ITA NO.5/MUM/14 A.Y. 09-10 [ACIT VS. M/S. COLOR IMAGE) PAGE 3 OTHER ADDITIONS/DISALLOWANCES TO INCOME DECLARED BY ASSESSEE AS UNDER: I. ESTIMATED NET PROFIT @ 35.55% OF SALES RS.1,77, 73,250 II. DISALLOWANCE U/S. 40(A)(IA) RS. 3,17,200 III. DISALLOWANCE AS PER PARA 19 OF THE ASST. ORDER RS. 2,68,594 IV. DISALLOWANCE AS PER PARA 20 OF THE ASST. ORDER RS. 2,50,000 V. DISALLOWANCE AS PER PARA 21 OF THE ASST. ORDER R S. 2,38,890 RS. 1,88,47,934 LESS: DEDUCTION U/S.80IB(5)(I) @ 25% OF NET PROFIT RS. 47,11,984 TOTAL INCOME RS. 1,4135,950 ASSESSING OFFICER DISCUSSED THIS ISSUE IN PARA 4 TO 18 OF ASSESSMENT ORDER. ASSESSING OFFICER WHILE MAKING A SSESSMENT RAISED A QUESTION AS TO WHY THERE WAS A DRASTIC RED UCTION IN GROSS PROFIT RATE FROM 62.29% IN A.Y. 2008-09 TO 23 .30% IN A.Y. 2009-10 AND NET PROFIT RATE FROM 55.59% IN A.Y . 2008-09 TO 7.35% IN A.Y. 2009-10. ASSESSING OFFICER OBSERV ED THAT SINCE UP TO LAST YEAR, ASSESSEE WAS ELIGIBLE FOR 10 0% DEDUCTION IN RESPECT OF ITS PROFITS U/S.80IB(5) OF THE ACT AN D 25% DEDUCTION IN RESPECT OF ITS PROFITS FROM A.Y. 2009- 10, ASSESSEE HAD INTENTIONALLY SUPPRESSED THE PROFIT. ASSESSEE TRIED TO JUSTIFY ITS DEDUCTION IN GROSS PROFIT AND NET PROFI T BY WAY OF WRITTEN SUBMISSION AND CERTAIN DETAILS BUT ASSESSIN G OFFICER DID NOT AGREE WITH THE SAME. HE CONCLUDED THAT COR RECTNESS AND COMPLETENESS OF ACCOUNTS AND AS PER PROVISIONS OF SECTION 145(3) OF THE ACT AND MADE ASSESSMENT BY ESTIMATING NET PROFIT ON TOTAL TURNOVER FOR THE YEAR UNDER CONSIDERATION AND FURTHER TO GIVE NATURAL JUSTICE TO ASSESSEE, THE AVERAGE OF THREE YEARS INCLUDING YEAR UNDER CONSIDERATION, NET PROFIT RATI O WAS TAKEN FOR ESTIMATING THE INCOME OF ASSESSEE WHICH WORKS O UT TO ITA NO.5/MUM/14 A.Y. 09-10 [ACIT VS. M/S. COLOR IMAGE) PAGE 4 35.55% ON THE TOTAL TURNOVER OF RS.4,99,95,07/-, NE T PROFIT WAS ESTIMATED AT RS.1,77,73,250/-. 2.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) GRANTED RELI EF TO ASSESSEE ON ALL ACCOUNTS. SAME HAS BEEN OPPOSED BE FORE US ON BEHALF OF REVENUE. 3. FIRST ISSUE IS WITH REGARD TO ESTIMATED NET PROF IT ADDITION OF RS.1,77,73,250/-. LEARNED DEPARTMENTAL REPRESEN TATIVE SUBMITTED THAT ASSESSEE FAILED TO SUBSTANTIATE THE DRASTIC FALL IN GROSS PROFIT AND NET PROFIT RATIO AS COMPARED TO EARLIER YEARS. CIT(A) ERRED IN NOT APPRECIATED THE ISSUE ON INCREA SE IN WAGES, SALARIES AND FACTORY EXPENSES BY INVOKING THE PROVI SIONS OF SECTION 145 OF THE ACT AS BOOKS OF ACCOUNT WERE NOT FOUND RELIABLE. ACCORDINGLY, HE SUBMITTED THAT ORDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. O N THE OTHER HAND, LEARNED AUTHORIZED REPRESENTATIVE SUPPORTED T HE ORDER OF CIT(A) AND REITERATED THE SUBMISSION MADE BEFORE CIT(A) AND REQUESTED TO UPHELD THE ORDER OF CIT(A). 3.1 AFTER GOING THROUGH RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD, WE FIND THAT STAND OF ASSESSEE HAS BEEN THAT RELATING MAIN ISSUE, LEARNED AUTHORIZED REPRES ENTATIVE DREW OUR ATTENTION TO COMPARATIVE POSITION OF SALES GROSS PROFIT AND NET PROFIT WHICH IS AS UNDER: A.Y.2009-10 A.Y. 2008-09 SALES 4,99,95,078/- 9,70,29,438/- ITA NO.5/MUM/14 A.Y. 09-10 [ACIT VS. M/S. COLOR IMAGE) PAGE 5 G.P. 1,16,49,365/- (23.3%) 6,04,37,834/-(62.29%) N.P. 36,72,188/-(7.35%) 5,39,57,881/- (55.59%) IN FOIL MANUFACTURING, GROSS PROFIT RATIO CAME DOWN FROM 79.55% TO 66.36% AND IN THE BUSINESS OF BOX GROSS P ROFIT RATIO CAME DOWN FROM 8.53% TO 3.50%. ACCORDING TO LEARNE D AUTHORIZED REPRESENTATIVE, ASSESSING OFFICER DID NO T CONSIDER THE OPENING AND CLOSING STOCK FIGURES. ACCORDING T O HIM, CORRECT FIGURE HAS BEEN DETAILED ON PAGE NO.196 OF PAPER BOOK WHICH GIVES COMPRISING ITEM-WISE QUANTITY MANUFACTU RING: ASSESS MENT YEAR ITEM-WISE QUANTITY MANUFACTURED DURING THE YEAR TOT AL OF QUANTITY CORRUGATE D BOX DUPLEX BOX PTD STICKERS/ LABLES TRANSFER/ DECALCOM ANIAS A.Y. 2008 -09 OPENING 7,968 71,000 9,985 14,950 1,03,903 7.67 68.33 9.61 14.39 100% MFG 6,82,740 40,32,118 11,07,68,995 17,06,204 11,71 ,90,057 0.58 3.44 94.52 1.46 100% SOLD (6,82,158) (37,67,118) (10,71,75,107) (17,06,204) (11,33,30,58 7) 0.60 3.32 94.57 1.51 100% CLOSING 8,550 3,36,000 36,03,873 14,950 39,63,373 0.22 8.48 90.93 0.38 100% A.Y. 2009 -10 OPENING 8,550 3,36,000 36,03,873 14,950 39,63,373 0.22 8.48 90.93 0.38 100% MFG 4,61,260 52,16,015 4,29,36,087 4,72,191 4,90,85 ,553 0.94 10.63 87.47 0.96 100% SOLD (4,29,361) (54,39,815) (4,65,39,960) (4,72,191) (5,28,81,327) 0.81 10.29 88.01 0.89 100% CLOSING 40,449 1,12,200 - 14,950 1,67,599 24.13 66.95 - 8.92 100% CHANGE IN % QTY MFG AS COMPARED TO LAST YEAR -32.44% 29.36% -61.24% -72.33% -58.11% CHANGE IN % QTY SOLD AS COMPARED TO LAST YEAR -37.06% 44.40% -56.58% -72.33% -53.34% MANUFACTURED QUANTITY OF FOILS (PTD STICKERS/LABLES & TRANSFER/DECALCOMANIA) WAS REDUCED FROM RS.11.24 CR ORE TO RS.4,34,80,278/- I.E. REDUCED BY RS.6,90,66,921/-. THIS DEDUCTION IS MORE THAN 60% AS EVIDENT FROM THE DETA ILS OF PAGE NO. 196 OF PAPER BOOK. REGARDING QUANTITY OF BOX ( CORRUGATED BOX + DUPLEX BOX) INCREASED FROM RS.47,14,858/- TO ITA NO.5/MUM/14 A.Y. 09-10 [ACIT VS. M/S. COLOR IMAGE) PAGE 6 RS.56,77,275/- WHICH INCREASED ABOUT RS.9,62,417/- AS EVIDENT FROM PAGE NO.196 OF PAPER BOOK. SOLD QUANT ITY OF FOILS (PTD STICKERS/LABLES & TRANSFER/DECALCOMANIA) REDUC ED FROM RS.10,88,81,311/- TO RS.4,70,12,151/- REDUCED BY AB OUT RS.6,18,69,160/- MORE THAN 60% AS EVIDENT FROM DETA ILS OF PAGE NO.196 OF PAPER BOOK. THE SOLD QUANTITY OF BO XES INCREASED FROM RS.44,94,276/- TO RS.58,69,176/- WHI CH INCREASED FROM RS.14,19,900/-. THE PERCENTAGE OF B OXES SOLD COMPARED TO LAST YEAR INCREASED BY 3.67% WHILE THAT OF FOIL REDUCED BY 64.45%. THE FREIGHT EXPENSES INCREASED AND INDIRECT EXPENSES ALSO INCREASED AS EVIDENT FROM TH E DETAILS GIVEN ON PAGE 4 OF PAPER BOOK. DURING A.Y. 2009-10 TURNOVER OF FOILS REDUCED TO RS.157 LACS FROM RS.734LACS. A SSESSEE EARNED BETTER VALUE ADDITION IN BUSINESS OF FOILS I .E. APPROXIMATELY 66.36%. AS TURNOVER IN FOILS REDUCED FROM 75% TO 31% GROSS PROFIT ALSO REDUCED PROPORTIONATELY. DURING A.Y. 2009-10 TURNOVER OF BOXES INCREASED TO RS.342/- LAC S FROM RS.234/- LACS, IN TERMS OF VALUE, IT WAS LESS. WAG ES WERE INCREASED FROM A.Y. 2008-09 TO 2009-10 BECAUSE OF I NCREASE IN CASE OF LABOUR. THE FACTORY EXPENSES IN THE YEAR A .Y.2009-10 HAD A MAJOR OVERHAUL OF MACHINERIES THATS WHY SAME WERE INCREASED. FALL IN GROSS PROFIT IN THE BUSINESS OF BOXES AND FOILS IS CLAIMED DUE TO BE INCREASED IN PURCHASE CO ST AND REDUCTION IN SALES PRICE, FOR WHICH, LEARNED AUTHOR IZED REPRESENTATIVE TOOK US TO DIFFERENT DETAILS AS MENT IONED IN PAGE NOS. 198 TO 223 OF PAPER BOOK. OTHER FACTORS HAVE BEEN CLAIMED TO BE DISCOUNT TO CELLO PLASTOTECH RS.25,09 ,876/- AS DETAILED ON PAGE 7 OF ASSESSMENT ORDER. THE DISCOU NT TO M/S. ITA NO.5/MUM/14 A.Y. 09-10 [ACIT VS. M/S. COLOR IMAGE) PAGE 7 JAYPEE TECHNOPLAST P. LTD. IS CLAIMED TO BE OTHER F ACTOR FOR LOW PROFIT AMOUNT RECEIVED BY ASSESSEE WAS LESS. HENCE , SAME WERE WRITTEN OFF ONLY IN THE YEAR UNDER CONSIDERATI ON. OTHER, CUSTOMER ACCOUNTED THE SAME IN A.Y. 2012-13. ALL DISCOUNT/BAD DEBTS HAVE TO BE ALLOWED TO ASSESSEE. THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY OF SUCH DISCO UNT OF BAD DEBT HAS COME TO ASSESSEE INDIRECTLY IN ANY MANNER. AGREEING TO THE CONTENTION, WE ARE OF THE VIEW THAT CIT(A) W AS JUSTIFIED IN DELETING ADDITION OF RS.1,77,73,250/- BY REASONED F ACTUAL FINDING. SAME NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 4. NEXT ISSUE IS WITH REGARD TO ADDITION OF RS.2,68 ,594/- MADE ON ACCOUNT OF DISCOUNT TO M/S. JAYPEE TECHNOPL AST. ASSESSING OFFICER HAS DISCUSSED THE ISSUE IN PARA 1 9 OF ASSESSMENT ORDER. FROM THE DETAILS FILED DURING AS SESSMENT PROCEEDINGS, ASSESSEE HAD SHOWN DISCOUNT/REBATE ALL OWED TO M/S. JAYPEE TECHNOPLAST OF RS.2,68,594/-. TO CROSS VERIFY THIS TRANSACTION, ASSESSING OFFICER ISSUED NOTICE U/S.13 3(6) OF THE ACT TO M/S. JAYPEE TECHNOPLAST. IN REPLY, IT WAS O BSERVED BY HIM THAT DISCOUNTS HAVE BEEN ACCOUNTED ON 06.04.201 1 I.E. IN A.Y. 2012-13. THUS, THE CLAIM OF DISCOUNT/REBATE O F RS.2,68,594/- CLAIMED BY ASSESSEE IN A.Y. 2009-10 W AS NOT FOUND TENEABLE AND ADDED BACK TO THE TOTAL INCOME O F ASSESSEE, WHICH WAS DELETED BY CIT(A) BY OBSERVING THAT STAND OF ASSESSEE HAS BEEN THAT IT WAS APPREHENSIVE ABOUT RE CEIVING BALANCE OUTSTANDING DUES FROM M/S. JAYPEE TECHNOPLA ST, BASED ON CIRCUMSTANTIAL EVIDENCE. ASSESSEE BEING A PRUDENT ITA NO.5/MUM/14 A.Y. 09-10 [ACIT VS. M/S. COLOR IMAGE) PAGE 8 BUSINESSMAN HAS WRITTEN OFF A DEBT. THIS DOES NOT PREVENT THE ASSESSEE FROM CLAIMING THE SAME IN EARLIER YEAR. T HIS FACT OF ASSESSEE WAS NOTHING BUT WRITTEN OFF A DEBT, WHICH, ACCORDING TO IT HAS BECOME BAD AND ACCORDING TO INCOME TAX AC T, THE ONLY CONDITION OF CLAIMING A BAD DEBT IS TO WRITE OFF IN THE BOOKS OF ACCOUNT AND THAT ENTITLES ANY ASSESSEE TO CLAIM IT IN THE YEAR OF WRITE OFF. UNDER FACTS AND CIRCUMSTANCES, CIT(A) R IGHTLY ALLOWED THE SAME BY GIVING REASONED FACTUAL FINDING . SAME IS UPHELD. 5. NEXT ISSUE IS WITH REGARD TO DISALLOWANCE OF DISCOUNT/REBATE ALLOWED TO SUNBEAM MACHINES INDIA P VT. LTD. AMOUNTING TO RS.2,50,000/-. ASSESSING OFFICER HAS DISCUSSED THIS ISSUE IN PARA 20 OF ASSESSMENT ORDER. ASSESSE E HAD PAID AN ADVANCE OF RS.2,50,000/- TO SUNBEAM MACHINES IND IA PVT. LTD. FOR SUPPLYING A MOULD WORTH RS.5,00,000/-. DU E TO BAD QUALITY OF MOULD, ASSESSEE HAD REJECTED THE MOULD, BUT COULD NOT RECOVER THE ADVANCE FROM SUNBEAM MACHINES INDIA PVT. LTD. IN VIEW OF SPECIFIC CONDITION THAT ADVANCE WOU LD NOT BE RETURNED IN CASE OF CANCELLATION OF ORDER. IN RESP ONSE TO NOTICE ISSUED U/S.133(6) OF THE ACT, IT WAS REVEALED THAT THE PARTY HAS ISSUE NON-ACCEPTANCE OF REJECTION VIDE ITS LETTER D ATED 05.12.2009 I.E. IN A.Y. 2010-11 AND HENCE ASSESSING OFFICER CONTENDED THAT THIS CLAIM WAS NOT TO BE ALLOWED IN A.Y.2009- 10. SO, THE DISPUTE IN NOT WITH REGARD TO DISCOUNT BUT YEAR OF DISCOUNT. AS REGARDS, ALLOWABILITY OF YEAR, NO SON NER DID IT COME TO KNOW THAT THE AMOUNT OF ADVANCE IS NOT RECO VERABLE, IT WROTE OFF THE SAME IN ACCOUNTS AS A PRUDENT BUSINES SMAN AND ITA NO.5/MUM/14 A.Y. 09-10 [ACIT VS. M/S. COLOR IMAGE) PAGE 9 AS PER SECTION 36(1)(VII) OF THE ACT, IT IS TO BE A LLOWED IN THE YEAR IN WHICH IT WAS WRITTEN OFF IN THE BOOKS OF ACCOUNT . SO, CIT(A) RIGHTLY DELETED THE SAME BY WAY OF REASONED FACTUAL FINDING. SAME NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 6. NEXT ISSUE IS WITH REGARD TO DISALLOWANCE OF RS. 2,38,890/- OUT OF WAGES PAID TO THE FACTORY WORKERS OF ASSESSE E. ASSESSING OFFICER ASKED TO ASSESSEE FOR WAGES REGISTER OF ASS ESSEE, OUT OF WHICH, SHE ISSUED NOTICES U/S.133(6) OF THE ACT TO FOUR EMPLOYEES, WHICH WERE RETURNED BY POSTAL AUTHORITIE S WITH REMARKS NOT KNOWN. ASSESSING OFFICER HAD THEN AS KED ASSESSEE TO PRODUCE THEM PERSONALLY BEFORE HER AND ON ITS INABILITY TO PRODUCE THEM, SHE DISALLOWED THE SAME OF RS.2,38,890/- BEING AGGREGATE SALARIES PAID TO THEM . 6.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN ASSESSEE SUBMITTED WAGES REGISTER AND SUMMA RY OF WAGES PAID TO 13 EMPLOYEES AMOUNTING TO RS.8,40,545 /-, WHEREIN THE ADDRESSES OF WORKERS WERE ALSO GIVEN. A SECOND STATEMENT FOR WAGES AGGREGATING TO RS.18,51,502/- W AS ALSO GIVEN IN RESPECT OF WAGES PAID TO DAILY WORKERS. C ONCERNED DEPUTY COMMISSIONER OF INCOME TAX NEVER RAISED ANY QUESTIONS ABOUT AUTHENTICITY OF WAGES REGISTER OR S TATEMENT OF WAGES. SHE, HOWEVER, ISSUED SUMMONS TO 4 PERSONS, WHO HAD RECEIVED WAGES IN AGGREGATE OF RS.2,38,890/- WHICH WERE RETURNED UNACCEPTED WITH REMARKS NOT KNOWN AND ACCORDINGLY, DEPUTY COMMISSIONER OF INCOME TAX DISA LLOWED THE SAME. IN THIS REGARD, STAND OF ASSESSEE HAS BE EN THAT ITA NO.5/MUM/14 A.Y. 09-10 [ACIT VS. M/S. COLOR IMAGE) PAGE 10 WORKERS, WHOSE ADDRESSES WERE GIVEN TO DEPUTY COMMI SSIONER OF INCOME TAX WERE AS PER ADDRESSES GIVEN TO ASSESS EE BY THE SAID WORKERS WHILE JOINING THE SERVICE. ALL THE WO RKERS, TO WHOM SUMMONS U/S.133(6) OF THE ACT WERE SENT HAD BE EN PAID WAGES OF AROUND RS.5000/- PER MONTH. THEY WERE VER Y POOR PEOPLE AND MOST OF WHICH WERE NOT RESIDENTS OF DAMA N AND WERE STAYING IN RENTED PREMISES. BEING MIGRANT, TH EY KEPT ON CHANGING THEIR RESIDENCES BECAUSE THEY DID NOT HAVE THEIR OWN PERMANENT RESIDENCE. UNDER THE CIRCUMSTANCES, ASSE SSEE COULD NOT KEEP TRACK OF THOSE WORKERS. ALL OF THEM HAD LEFT JOB OF ASSESSEE. SO, DISALLOWANCE IN QUESTION WAS NOT JUSTIFIED. CIT(A) HAS RIGHTLY DELETED THE ADDITION IN QUESTION BECAUSE ASSESSEE CAN MAKE PAYMENT TO WORKERS, WHOSE ADDRESS ES WERE TOLD TO ASSESSEE AT RELEVANT POINT OF TIME. ASSESS EE HAS NOT MECHANISM TO HOLD THESE WORKERS ON THE SAME ADDRESS AFTER WORK IS DONE. SO, TAKING ALL FACTS AND CIRCUMSTANC ES INTO CONSIDERATION, CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION BY WAY OF REASONED FACTUAL FINDING. SAME NEEDS NO INT ERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 7. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 31 ST DAY OF AUGUST, 2016. SD/- SD/- ( JASON P. BOAZ ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 31/08/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- ITA NO.5/MUM/14 A.Y. 09-10 [ACIT VS. M/S. COLOR IMAGE) PAGE 11 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&