Sh. Ramendra Singh Kushwah, Gwalior V. J.C.I.T., Range-1, Gwalior

ITA 564/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0581 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 4 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-03-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 21-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Set aside
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 564/AGRA/2012 ASSTT. YEAR : 2009-10 RAMENDRA SINGH KUSHWAH, VS. J.C.I.T., RANGE -1, S/O SHRI MATHURA SINGH GWALIOR. 501, AAKRATI ARCADE, GOVINDPURI, GWALIOR.(PAN: AEBPK 7522 G) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDRA SHARMA, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 05.03.2013 DATE OF PRONOUNCEMENT OF ORDER : 08.03.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A), GWALIOR DATED 02.11.2012 FOR THE ASSESSMENT YEAR 20 09-10, CHALLENGING THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 7,46,710/- ON ACCOUNT OF DISALLOWANCE OF LABOUR EXPENSES AND ADDITION OF RS. 50,000/- ON ACCOUNT OF DISALLOWANCE OUT OF VARIOUS EXPENSES. 2. THE AO FOUND THAT THE ASSESSEE HAS INCURRED LABO UR EXPENSES IN A SUM OF RS.1,49,34,177/-. THE AO ON VERIFICATION OF THE VOU CHERS AND DETAILS FOUND THAT ITA NO. 564/AGRA/2012 2 SOME OF THE VOUCHERS ARE NOT PROPER AND NOT SUPPORT ED BY THE NAME OF SITE. THE AO, ACCORDINGLY, DISALLOWED 5% OF THE EXPENSES AND MADE ADDITION OF RS.7,46,710/-. SIMILARLY, OUT OF OTHER EXPENSES, TH E AO FOUND THAT SOME OF THE EXPENSES ARE NOT PROPERLY VOUCHED AND NOT SUPPORTED BY BILLS AND MOREOVER PERSONAL USE OF TELEPHONE CANNOT BE RULED OUT AND A CCORDINGLY, RS.50,000/- WAS DISALLOWED OUT OF VARIOUS EXPENSES. THE LD. CIT(A) CONFIRMED BOTH THE ADDITIONS AND DISMISSED THE APPEAL OF THE ASSESSEE. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AO HAS NOT POINTED OUT WHICH OF THE EXPENSES ARE NOT PROPERLY VOUCHED. THEREFORE , THESE ARE ADHOC ADDITIONS. THEREFORE, THE SAME MAY BE DELETED. ON THE OTHER HA ND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE FINDINGS OF THE AUTHORITIES BELOW. THE ASSESSEE HAS FILED RETURN OF INCOME AT RS.43,10,930/-. THE ASSESSEE IS A CONTRACTOR AND DERIVING INCOME FROM C IVIL CONTRACT BUSINESS AND RENTAL INCOME. DURING THE YEAR UNDER CONSIDERATION, THE AO FOUND THAT THE ASSESSEE HAS DECLARED GROSS RECEIPTS OF RS.13,75,29,348/- YIELDI NG GROSS PROFIT AT THE RATE OF 6.32% AND NET PROFIT AT THE RATE OF 3.22% AS AGAINS T LAST YEARS GROSS RECEIPTS OF 12.04 CRORES DECLARING GROSS PROFIT OF 5.51% AND NE T PROFIT AT 2.89%. THEREFORE, THE ITA NO. 564/AGRA/2012 3 PROFIT OF THE ASSESSEE WAS FOUND TO BE BETTER. THE ASSESSEE PRODUCED REQUIRED DETAILS BEFORE THE AO AND ALSO FILED CONFIRMATION E TC. AND BOOKS HAVE BEEN TEST CHECKED. THE HISTORY OF THE ASSESSEE, THEREFORE, CL EARLY PROVES THAT THE ASSESSEE PRODUCED COMPLETE DETAILS AND BOOKS OF ACCOUNTS BEF ORE THE AO AND THE BOOK RESULTS OF THE ASSESSEE WERE FOUND BETTER AS COMPAR ED TO THE LAST YEARS PROFIT INCLUDING THE TURNOVER HAVE ALSO INCREASED. THE ASS ESSEE IN ORDER TO BUY PEACE AND DURING THE SHORT PERIOD COULD NOT FILE CONFIRMATION OF CERTAIN CREDITORS AND ALSO MADE SURRENDER OF RS.21,77,485/-, WHICH WAS ADDED T O THE INCOME OF THE ASSESSEE. THUS, THE ADDITION WAS NOT CHALLENGED BEFORE THE LD . CIT(A). IF THE SAID ADDITION OF RS.21,77,485/- IS ADDED TO THE BOOK RESULTS OF THE ASSESSEE/RETURNED INCOME, THE PROFIT RATE OF ASSESSEE WOULD FURTHER ENHANCE CONSI DERABLY, WHICH WOULD BE NEAR TO THE DEEMED PROFIT EVEN AS PER SECTION 44AD OF THE I T ACT. THUS, THE FINDING OF THE AO IN THE ASSESSMENT ORDER ITSELF PROVES THAT THE A SSESSEE HAS SHOWN BETTER RESULTS AS COMPARED TO THE EARLIER YEAR AND BY MAKING FURTH ER ADDITIONS ON ACCOUNT OF SUNDRY CREDITORS, INCOME OF THE ASSESSEE IS ENHANCE D CONSIDERABLY. THEREFORE, WE FIND THAT THERE IS NO FURTHER SCOPE TO ENHANCE THE INCOME OF THE ASSESSEE BY DISALLOWANCE OF EXPENSES PARTICULARLY ON ADHOC BASI S. THE AO HAS NOT GIVEN ANY SPECIFIC FINDING OF FACT AS TO WHICH OF THE EXPENSE S ARE NOT PROPERLY VOUCHED. IN THE ABSENCE OF ANY DETAILS OF INADMISSIBLE EXPENSES AND IN THE ABSENCE OF ANY FINDING THAT THE EXPENSES WERE NOT INCURRED FOR THE PURPOSE OF BUSINESS, IT APPEARS THAT THE ITA NO. 564/AGRA/2012 4 AO HAS MADE ADHOC ADDITIONS BY DISALLOWING LABOUR E XPENSES AND OTHER EXPENSES. THE DISALLOWANCE, THUS, CANNOT BE SUSTAINED. CONSID ERING THE HISTORY OF THE ASSESSEE AS NOTED ABOVE AND THE BOOK RESULTS DECLAR ED AND FURTHER ADDITIONS MADE ON ACCOUNT OF SUNDRY CREDITORS AND THAT ONLY ADHOC ADDITIONS HAVE BEEN MADE BY DISALLOWING EXPENSES, WE DO NOT FIND ANY JUSTIFICAT ION TO SUSTAIN THE ORDERS OF THE AUTHORITIES BELOW IN MAKING OR CONFIRMING THE DISAL LOWANCE OF EXPENSES ABOVE. THE ORDERS OF THE AUTHORITIES BELOW ARE, THEREFORE, SET ASIDE AND THE ADDITIONS OF RS.7,46,710/- & RS.50,000/- ARE ACCORDINGLY DELETED . 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY