ITO, Bangalore V. M/s Rajalakshmi Enterprises, Bangalore

ITA 563/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1640 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-01-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 21-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI
• Keywords: Non-deduction of tax; Set aside

Judgement Text

ITA.563/BANG/2010 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A', BANGALORE BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A NO.563/BANG/2010 (ASSESSMENT YEAR : 2005-06) INCOME-TAX OFFICER, WARD -1(2), BANGALORE .. APPELLANT V. M/S. RAJALAKSHMI ENTERPRISES, NO.122, VEERA PILLAI STREET, BANGALORE .. RESPONDENT APPELLANT BY : SMT. JACINTA ZIMIK VASHAI, ADDL.CIT RESPONDENT BY : NONE O R D E R PER DR. O. K. NARAYANAN, VICE PRESIDENT : THIS APPEAL IS FILED BY THE REVENUE. THE RELEVANT ASSESSMENT YEAR IS 2005-06. THE APPEAL IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(A)-I AT BANGALORE, DATED .01.01.2010, AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S.144 OF THE INCOME-TAX ACT, 1961. 2. THE ASSESSEE FIRM FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR 2005-06 ON AN INCOME OF ` 16,72,277/-. THE ITA.563/BANG/2010 PAGE - 2 ASSESSING OFFICER HAS MADE AN ADDITION OF ` 5,01,968/- TOWARDS GROSS PROFIT ON UNACCOUNTED SALES AND ANOTHER ADDITION OF ` 11,33,920/-, U/S.40(A)(IA) FOR FAILURE TO DEDUCT TAX AT SOURCE. 3. WHEN THE MATTER WAS TAKEN IN FIRST APPEAL, THE C OMMISSIONER OF INCOME-TAX(A) CONFIRMED THE ADDITION OF ` 5,01,968/- AND DELETED THE ADDITION OF ` 11,33,920/-. 4. IN THE ABOVE SCENARIO THE ONLY GRIEVANCE RAISED BY THE REVENUE IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME-T AX(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER U/S.40(A)(IA), AMOUNTING TO ` 11,33,920/-. 5. WHEN THIS MATTER WAS CALLED FOR HEARING, NOBODY WAS PRESENT FOR THE RESPONDENT ASSESSEE IN SPITE OF NOTICE. AT THE TIME OF PREVIOUS POSTING ALSO THE ASSESSEE WAS NOT PRESENT AND THE I NCOME-TAX DEPARTMENT WAS DIRECTED TO SERVE THE NOTICE ON THE ASSESSEE. ACCORDINGLY NOTICE HAS BEEN SERVED ON THE ASSESSEE BY THE DEPARTMENT AND THE ACKNOWLEDGEMENT IS PLACED IN THE FILE. I N THESE CIRCUMSTANCES, WE PROCEED TO DISPOSE OF THE MATTER EX-PARTE, QUA THE ASSESSEE. ITA.563/BANG/2010 PAGE - 3 6. WE HEARD SMT. JACINTA ZIMIK VASHAI, THE LEARNED ADDITIONAL COMMISSIONER OF INCOME-TAX APPEARING FOR THE REVENU E. 7. IT IS CLEAR IN THE ASSESSMENT ORDER THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS DIRECTED A NUMBER OF TIMES TO PRODUCE SOME CREDIBLE DETAILS TO SUPPORT ITS ARGUME NTS REGARDING THE NATURE OF HIRING OF VEHICLES, BUT THE ASSESSEE EXPR ESSED BEFORE THE ASSESSING AUTHORITY THAT IT WAS NOT IN A POSITION T O FILE SUCH DETAILS AS REQUISITIONED BY THE ASSESSING AUTHORITY. IT CLEAR LY SHOWS THAT THE ASSESSEE WAS RAISING ONLY ASSERTIONS, BUT NO MATERI ALS WERE PRODUCED TO PROVE THOSE ASSERTIONS. 8. IN FIRST APPEAL THE COMMISSIONER OF INCOME-TAX(A ) HAS DELETED THE ADDITION ON THE BASIS OF A GENERAL PROPOSITION THAT TRUCK DRIVERS WERE PART OF AN UNORGANIZED SECTOR OF ECONOMY AND T HEREFORE NO ELEMENT OF CONTRACT COULD BE INVOLVED IN SUCH PAYME NTS. APART FROM THE ABOVE GENERAL PROPOSITION, THE COMMISSIONER OF INCOME-TAX(A) HAS NOT EXAMINED THIS ISSUE ON MERIT. THE ASSESSEE 'S CASE MAY BE A GOOD ONE, BUT THAT IS A DIFFERENT ISSUE. IT IS ONL Y A GENERAL STATEMENT THAT TRUCK DRIVERS FORMED PART OF UNORGANIZED SECTO R OF ECONOMY. IF DECISIONS ARE TAKEN ON THE BASIS OF SUCH GENERAL PR OPOSITIONS, IT WILL LEAD TO UNDESIRABLE CONSEQUENCES. ONLY ON THE BASI S OF AN ALIBI THAT ITA.563/BANG/2010 PAGE - 4 TRUCK DRIVERS ARE PART OF UNORGANIZED SECTOR, IT IS NOT POSSIBLE TO ALLOW THE CLAIM OF AN ASSESSEE TOWARDS DEDUCTION OF EXPEN DITURE. SUCH A PROPOSITION WILL HAVE PERSUASIVE VALUE ; BUT IT DOE S NOT SUBSTITUTE FOR REASONABLE EXPLANATION AND EVIDENCE. THEREFORE, WE FIND THAT THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) ON THIS POINT IS NOT SUSTAINABLE IN LAW. IT IS SET ASIDE. 9. THE ISSUE IS SENT BACK TO THE ASSESSING AUTHORIT Y FOR REEXAMINING THE ISSUE AFTER TAKING INTO CONSIDERATION THE PROPO SITIONS MADE OUT BY THE COMMISSIONER OF INCOME-TAX(A) AS WELL. THE ASS ESSEE SHALL BE HEARD BEFORE PASSING ANY CONSEQUENTIAL ORDER. 10. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 05TH DAY OF JANU ARY, 2011, AT BANGALORE. SD/- SD/- (P. MADHAVI DEVI) (DR. O. K. NARAYANAN) JUDICIAL MEMBER VICE PRESIDENT