ITO, New Delhi V. M/s Chandra Buildcon Pvt. Ltd., New Delhi

ITA 5498/DEL/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6956 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 06-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KRISHNA
• Assessee Lawyers: V MOHAN
• Keywords: Additional evidence; Sham transactions; TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI K.D. RANJAN ITA NO. 5498/DEL/2010 ASSTT. YR: 2006-07 INCOME-TAX OFFICER, VS. M/S CHANDRA BUILDCON PVT . LTD., WARD 3(3), NEW DELHI. B-5/263, SECTOR-3, ROHINI, NEW DELHI. PAN/GIR NO. AACCC5263G (APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI KRISHNA CIT DR RESPONDENT BY : SHRI VED JAIN, FCA & MS.RANO JAIN & V. MOHAN CA O R D E R PER R.P. TOLANI, J.M : THIS IS REVENUES APPEAL AGAINST CIT(A)S ORDER DAT ED 10-9-2010 RELATING TO A.Y. 2006-07. SOLE EFFECTIVE GROUND RAI SED IS AS UNDER: THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DE LETING ADDITION OF RS. 2,19,62,182/- MADE ON ACCOUNT OF SH AM TRANSACTION ENTERED BY THE ASSESSEE WITH M/S PACL I GNORING THAT THE ASSESSING OFFICER CLEARLY BROUGHT OUT THE SHAM TRANSACTION BETWEEN M/S PACL AND THE ASSESSEE. SINC E THE ASSESSEE HAS NOT PRODUCED ANY PROOF OF WAGE PAYMENT DURING THE YEAR UNDER CONSIDERATION AND REMAINING WAGES IN NEXT YEAR WHICH IS THE MAIN EXPENSE INCURRED BY THE ASSESSEE, IT PROVES THAT NO CONSTRUCTION WORK WAS DONE. 2. LEARNED DR CONTENDS THAT IT IS A MATTER OF RECOR D THAT M/S PACL INDULGED INTO SHAM TRANSACTIONS OF CONTRACTS, THERE FORE, THERE WAS NO REASON FOR THE CIT(A) TO DELETE THE ADDITIONS MADE BY THE AO. 2 3. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, CONTENDS THAT THE REVENUES GROUND IS MISCONCEIVED INASMUCH AS CIT(A) ADMITTED THE ADDITIONAL EVIDENCE AGAINST WHICH REVENUE IS NOT IN APPEAL. AFTER ADMISSION OF ADDITIONAL EVIDENCE, CIT(A) HAS NOT GIVEN ANY RE LIEF BUT DIRECTED THE AO TO VERIFY THE ADDITIONAL EVIDENCE AND CLAIM OF THE ASSESSEE BY FOLLOWING OBSERVATIONS: IN ADDITION TO THE DETAILS AND DOCUMENTS ALREADY F ILED BEFORE ASSESSING OFFICER, THE APPELLANT AHS FILED WAGE SHE ETS FOR VARIOUS MONTHS, LEDGER ACCOUNT OF WAGES PAYABLE FOR SUBSEQUENT YEAR, BANK STATEMENT FOR THE PERIOD 2006 -07. COPY OF LEDGER ACCOUNT OF WAGES WAS ALSO PRODUCED FOR VE RIFICATION WHICH IS A RELEVANT DOCUMENT FOR EXAMINING THE ENTR IES FOR THE WHOLE YEAR. NO DISCREPANCY HAS BEEN POINTED OUT IN THESE DOCUMENTS AND THEY HAVE BEEN FOUND TO BE IN ORDER B Y THE ASSESSING OFFICER. THE APPELLANT HAS ALSO ADDRESSED VARIOUS OTHER OBJECTIONS RAISED IN THE ASSESSMENT ORDER AND COPIES OF VARIOUS DOCUMENTS WERE FILED TO SHOW THAT THE TRANS ACTIONS WITH M/S PACL INDIA LTD. WERE GENUINE, SUCH AS COPY OF C ONT5RACT NOTE WITH PACL INDIA LTD., LEDGER ACCOUNT OF PACL I NDIA LTD. IN THE BOOKS OF ASSESSEE, COPY OF LEDGER ACCOUNT OF ASSESSEE IN THE BOOKS OF M/S PACL INDIA LTD., COPY OF TDS CERTI FICATE RECEIVED FROM M/S PACL INDIA LTD., COPY OF BILLS RA ISED ON M/S PACL INDIA LTD. TDS CERTIFICATE CONTAINS DETAILS SU CH AS ADDRESS OF THE DEDUCTOR, TAX DEDUCTION A/C NO. AND PAN. NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE ASSESSIN G OFFICER TO PROVE THAT THESE DOCUMENTS ARE NOT GENUINE. THE EVI DENCES FILED IN SUPPORT OF THE CLAIM OF WAGES ARE FOUND TO BE IN ORDER BY THE ASSESSING OFFICER. HENCE, THERE IS NO JUSTIFICATION OF DISALLOWANCE OF THE TOTAL EXPENDITURE ON ACCOUNT OF WAGES. I, HOWEVER, FIND THAT THE APPELLANT HAS NOT FILED ANY EVIDENCE FOR THE WAGES PAID FOR THE MONTH OF SEPTEMBER, 2005. AS PER THE DETAILS FILED DURING THE APPEAL PROCEEDINGS, NO EXP ENSES WERE INCURRED IN THE MONTH OF SEPTEMBER ON WAGES. THE AS SESSING OFFICER IS DIRECTED TO VERIFY THIS FROM THE RECORDS AND ALLOW THE EXPENDITURE TO THE EXTENT THE EVIDENCES HAVE BEEN F ILED AND FOUND TO BE IN ORDER, AS PER THE VERIFICATION ALREA DY MADE BY HIM. 3 3.1. LEARNED COUNSEL CONTENDS THAT REVENUE HAS NOT CHALLENGED THE ADMISSION OF ADDITIONAL EVIDENCE U/S 46A. CIT(A) HA S ADMITTED THE ADDITIONAL EVIDENCE AND SENT IT BACK TO THE AO TO V ERIFY THE SAME. REVENUE HAS TAKEN MISCONCEIVED GROUND THAT CIT(A) HAS DELE TED THE ADDITION. ORDER OF CIT(A) WAS RELIED UPON. 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND MERIT IN THE ARGUMENT OF LEARNED CO UNSEL. CIT(A), IN OUR VIEW, HAS NOT GIVEN ANY RELIEF BUT SENT THE ADDITIO NAL MATERIAL FOR VERIFICATION OF THE AO. IN VIEW THEREOF WE SEE NO INFIRMITY IN T HE ORDER OF CIT(A), WHICH IS UPHELD. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 21-10-2011. SD/- SD/- (K.D. RANJAN ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21-10-2011. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 4