Arvind Kumar, Delhi V. ITO, Ward-1, Rewari

ITA 5314/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4374 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 08-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Section: 143(3); 40(a)(ia); 194C; 37; 28; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC, NEW DELHI BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER ITA NO. 5314/DEL/2018 ASSESSMENT YEAR: 2013-14 ARVIND KUMAR, VS. ITO, WARD-1, C/O KAPIL GOEL, ADVOCATE, REWARI F-26/124, SECTOR-7, ROHINI, DELHI 110 085 (PAN: ALNPK8589L) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. KAPIL GOEL, ADV. REVENUE BY : SH. SL ANURAGI, SR. DR. ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 10.10.2017 AND CORRIGENDUM ORDER DATED 26.6.2018 OF THE LD. CIT(A), ROHTAK PERTAINING TO ASSESSMENT YEAR 2013-14 ON TH E FOLLOWING GROUNDS:- I) THAT ARBITRARY ADDITION AMOUNTING TO RS. 864,221/- MADE U/S. 40(A)(IA) BY AO AS SUSTAINED IN ORDER OF LD. CIT(A) DATED 26.6.2018 IS INCORRECT AS NO TAX WITHHOLDING LIABILITY IS ATTRACTED ON SUBJECT PAYMENTS U/S. 194C AND OTHERWISE ALSO SAME IS DIRECT COST U/S. 28 WHICH DOES NOT FALL IN PROVISIONS OF SECTION 30 TO 37 LIMITEDLY COVERED 2 U/S. 40(A(IA) AND IN WORST CASE AS PER RECENT AMENDMENT ONLY 30% OF THE EXPENDITURE CAN BE CONSIDERED FOR DISALLOWANCE IN WORST CASE, WHICH ALSO WOULD ENHANCE DEDUCTION / BENEFIT U/S. 80JJA OF THE ACT WHICH CLAIMED WAS RAISED BEFORE CIT(A) IN GROUNDS NO. 6 & 7 SPECIFICALLY. II) THAT SPECIFIC CLAIM OF ASSESSEE BEFORE CIT(A) IN GROUNDS NO. 6 & 7 SPECIFICALLY TO ENHANCE DEDUCTION AND BENEFIT U/S. 80JJA ON ADDITIONS SUSTAINED HAS BEEN PERFUNCTORILY ADJUDICATED IN ORDER DATED 26.6.2018 WHICH IS IMPUGNED HERE. HUMBLE PRAYER:- (I) TO DELETE THE ADDITION OF RS. 864,221/- U/S. 40(A)(IA); ALTERNATIVELY ALLOW DEDUCTION AND BENEFIT U/S. 80JJA; (II) TO ALLOW BENEFIT U/S. 80JJA ON ADDITIONS ETC. SUSTAINED. (III) TO RESTORE RETURNED INCOME. (IV) ANY OTHER APPROPRIATE RELIEF. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE F ILED HIS RETURN OF INCOME ON 28.9.2013, DECLARING INCOME OF RS.NIL. TH E ASSESSEE IS RUNNING AN INDUSTRY OF MANUFACTURING OF BIO-FUEL BR IQUETTES. THE CASE OF THE ASSESSEE WAS PICKED UP FOR COMPLETE SCRUTINY UN DER CASS. STATUTORY NOTICES AND QUESTIONNAIRES WERE ISSUED. THE AR OF THE ASSESSEE 3 ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND FILE D THE WRITTEN REPLIES FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREAFTER, THE AO MADE THE ADDITIONS OF RS. 15,90,947/- UNDER DIFFERE NT HEADS FROM PARA NO. 2 TO 6 OF HIS ORDER AND ASSESSED THE INCOME AT RS. 15,90,950/- U/S. 143(3) OF THE ACT VIDE ORDER DATED 04.03.2016. AGA INST THE ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS ORIGINAL IMPUGNED ORDER DATED 10.10.2017 AND ALSO VIDE CORR IGENDUM ORDER DATED 26.6.2018 HAS PARTLY ALLOWED THE APPEAL OF TH E ASSESSEE. AGGRIEVED WITH THE IMPUGNED ORDER, ASSESSEE IS IN APPEAL BEFO RE THE TRIBUNAL. 3. DURING THE HEARING, LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT ADDITION AMOUNTING TO RS. 864,221/- MADE U/S. 40(A) (IA) BY AO AS SUSTAINED IN ORDER OF LD. CIT(A) DATED 26.6.2018 IS INCORRECT AS NO TAX WITHHOLDING LIABILITY IS ATTRACTED ON SUBJECT PAYM ENTS U/S. 194C AND OTHERWISE ALSO SAME IS DIRECT COST U/S. 28 WHICH DO ES NOT FALL IN PROVISIONS OF SECTION 30 TO 37 LIMITEDLY COVERED U/S. 40(A(IA) AND IN WORST CASE AS PER RECENT AMENDMENT ONLY 30% OF THE EXPENDITURE CA N BE CONSIDERED FOR DISALLOWANCE IN WORST CASE, WHICH ALSO WOULD ENHAN CE DEDUCTION / BENEFIT U/S. 80JJA OF THE ACT WHICH CLAIMED WAS RAISED BEF ORE CIT(A) IN GROUNDS NO. 6 & 7 SPECIFICALLY. HE FURTHER SUBMITTED THAT T HE SPECIFIC CLAIM OF ASSESSEE BEFORE LD. CIT(A) IN GROUNDS NO. 6 & 7 SPE CIFICALLY TO ENHANCE DEDUCTION AND BENEFIT U/S. 80JJA ON ADDITIONS SUST AINED HAS BEEN PERFUNCTORILY ADJUDICATED IN ORDER DATED 26.6.2018. ACCORDINGLY, HE REQUESTED TO DELETE THE ADDITION OF RS. 864,221/- U /S. 40(A)(IA); 4 ALTERNATIVELY ALLOW DEDUCTION AND ALLOW BENEFIT U/S . 80JJA ON ADDITIONS ETC. SUSTAINED. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT HE HAS PASSED A WELL REASONED ORDER DATED 26.6.2018 WHICH DOES NOT NEED ANY INTERFERENCE. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS ESPECIALLY THE IMPUGNED ORDER. I FIND THAT THE AO HAS RIGHTLY MA DE THE ADDITION AS THERE WAS CONTRAVENTION OF PROVISION OF SECTION 194 C AND 40(A)(IA) OF THE INCOME TAX ACT, 1961 IN THIS CASE. FROM THE DETAILS SUBMITTED BY THE ASSESSEE, IT IS SEEN THAT THE LABOUR PAYMENT WAS MA DE ON CONTRACT BASIS TO MR. SAGIR KAHN AND DURING THE YEAR ALL THE PAYME NTS FOR LABOUR WORK HAVE BEEN GIVEN TO HIM. HOWEVER, NO DEDUCTION OF T AX WAS MADE ON THE PAYMENT OF RS. 8,64,221/-. THIS ACTION OF THE AO IS IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND REQUIRES NO INTERFERE NCE. THE ASSESSEES SUBMISSION THAT THIS WAS AN ARRANGEMENT AND DETAILS OF PAYMENTS MADE TO VARIOUS EMPLOYEES HAS BEEN FURNISHED, REMAINS UN SUBSTANTIATED AND IS NOT ACCEPTABLE. HENCE, THE ADDITION OF RS. 8,64,22 1/- WAS RIGHTLY CONFIRMED BY THE LD. CIT(A), WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, THEREFORE, I UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND REJECT THE GROUNDS RAISED BY THE ASSESSEE. SINCE TH E ADDITION MADE BY THE AO HAS BEEN RIGHTLY SUSTAINED BY THE LD. CIT(A) AND I AFFIRMED THE ACTION OF THE LD. CIT(A), AS AFORESAID, HENCE, THE OTHER G ROUNDS RAISED BY THE ASSESSEE HAVE BECOME ACADEMIC AND NEED NOT BE ADJUD ICATED. 5 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 12-02-2019. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE:12/02/2019 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES