THE ACIT, (OSD) Ward - 2(1), Bhopal V. SHRI KAILASH SINGH, Misrod

ITA 571/IND/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2301 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALCHAND
• Assessee Lawyers: N D PATWA
• Section: 40A(3); 143(3); 194C; 148

Judgement Text

ACIT VS. KAILASH SINGH ITAT NO. 571/IND/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, HONBLE JUDICIAL MEMBER AND SHRI MANISH BORAD, HONBLE ACCOUNTANT MEM BER ITA NO. 571/IND/2016 A.Y. 2008-09 ACIT (OSD) WARD 2(1) BHOPAL ::: APPELLANT VS KAILASH SINGH MISROD ::: RESPONDENT APPELLANT BY SHRI LALCHAND RESPONDENT BY SHRI ASHISH GOYAL & SHRI N.D. PATWA DATE OF HEARING 15.2.201 8 DATE OF PRONOUNCEMENT 2 8 .2.201 8 O R D E R PER SHRI MANISH BORAD, AM THIS APPEAL OF THE ASSESSEE RELATING TO THE ASSESSMENT YEAR 2008-09 IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-I, BHOPAL, D ATED ACIT VS. KAILASH SINGH ITAT NO. 571/IND/2016 2 29.2.2016 WHICH IS ARISING OUT OF THE ORDER U/S 143( 3) R.W.S. 147 OF THE ACT DATED 18.0.2013 FRAMED BY THE D CIT 1(1) BHOPAL. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN (I) DELETING THE ADDITION OF RS. 13,10,807/- ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE U/S 40A(3) OF THE IT ACT, 1961. (II) DELETING THE ADDITION OF RS. 6,46,62,207/- (RS.4,18,25,817/- + RS.1,87,80,500/-) ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE AS PER PROVISIONS OF SECTION 40A(IA) OF THE IT ACT, 1961. 3. BRIEFLY STATED, THE FACTS, AS CULLED OUT FROM RECOR D, ARE THAT THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE AC T ACIT VS. KAILASH SINGH ITAT NO. 571/IND/2016 3 ON 28.10.2010 DETERMINING THE INCOME AT RS.2,44,16,2 67/- . THEREAFTER THE LEARNED ASSESSING OFFICER AFTER BEIN G SATISFIED ABOUT THE ESCAPEMENT OF INCOME TO THE TUNE O F RS. 6,63,53,106/- ISSUED NOTICE U/S 148 OF THE ACT DATED 9.11.2011 AND REOPENED THE ASSESSMENT PROCEEDINGS. TH E LEARNED ASSESSING OFFICER IN THE REASSESSMENT PROCEED INGS OBSERVED THAT THERE WERE CASH PAYMENTS CONTRAVENING PROVISIONS OF SECTION 40A(3) OF THE ACT AT RS. 13,10 ,807/- AND ALSO THERE WAS NO DEDUCTION OF TAX ON THE PAYMENT OF RS. 6,46,62,207/- AND ACCORDINGLY HE MADE DISALLOWANCE U/S 40A(IA) OF THE ACT AND THERE WAS NO DEDUCTION OF TA X ON THE PAYMENT OF RS. 6,46,62,207/- AND ACCORDINGLY HE M ADE DISALLOWANCE U/S 40A(IA) AT RS. 6,59,73,014/- AND U/S 40A(3) AT RS. 13,10,807/-. THE ADDITION WAS ALSO MADE A T RS.7,80,087/- FOR DEBITING PENALTY EXPENSES IN THE P ROFIT AND LOSS ACCOUNT. THE INCOME ASSESSED AT RS.9,07,69,370/-. AGAINST THE ORDER OF THE ASSESSING ACIT VS. KAILASH SINGH ITAT NO. 571/IND/2016 4 OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND PARTLY SUCCEEDED AND THE COMMISSIONER OF INCOME TAX (APPEALS ) DELETED THE ADDITION U/S 40A(3) OF THE ACT AS WELL U/ S 40A(IA) OF THE ACT. NOW THE REVENUE IS IN APPEAL BEFOR E THE TRIBUNAL. 4. THE LEARNED DR AT THE OUTSET REFERRED TO AND RELIED UPON THE ORDER OF THE ASSESSING OFFICER ON BOTH THE ISSUES. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSIONS MADE BEFORE THE COMMISSIONER OF INCOME T AX (APPEALS) AND THE FINDINGS THEREIN. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. WE OBSERVE THAT DURING THE C OURSE OF ASSESSMENT PROCEEDINGS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), REMAND REPORT WAS CALLED ON BOTH THE ISSUES RELATING TO DISALLOWANCE U/S 40A(3) OF THE ACT AT RS.13,10,807/- AND U/S 40A(IA) OF THE ACT AT ACIT VS. KAILASH SINGH ITAT NO. 571/IND/2016 5 RS.6,46,62,207/- AND THE FOLLOWING COMMENTS WERE GIV EN BY THE ASSESSING OFFICER WHICH ARE DULY INCORPORATED IN THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) :- REGARDING DISALLOWANCE U/S 40A(3) 8.3 THE SUBMISSIONS OF THE APPELLANT, THE REMA ND REPORT OF THE A.O. WHICH IS REPRODUCED ABOVE AND TH E REJOINDER OF THE APPELLANT ARE CONSIDERED. WITH RES PECT TO GROUND OF APPEAL NO. 4, THE A.O. IN HIS REMAND REPO RT IN REGARD TO THE ADDITION MADE UNDER THE HEAD OF BOULD ERS & MURRAM EXPENSES HAS STATED :- THE ASSESSEE HAS ALSO STATED THAT AS PER THE COPY OF LEDGER OF BOULDERS & MURRAM, THE DAILY CASH PAYMENT IS MORE THAN RS. 20,000/- BUT SINGLE PAYMENT TOWARDS INDIVIDUAL SUPPLIERS OR PARTIES HAS NOT BEEN EXCEEDED THE SPECIFIED LIMIT OF RS.20,000/-. THE ORIGINAL VOUCHERS HAVE BEEN PRODUCED BY THE ASSESSEE WHICH WERE VERIFIED. ACIT VS. KAILASH SINGH ITAT NO. 571/IND/2016 6 REGARDING DISALLOWANCE U/S 40A(IA) 8.4 THE REMAND REPORT OF THE A.O. IN REGARD TO THE ADDITION MADE IN THE ASSESSMENT ORDER ON ACCOUNT OF VIOLATION OF SECTION 40(A)(IA) OF THE IT ACT IN RES PECT OF EARTH DIGGING CHARGES OF RS. 4,18,25,817/-, RS. 40,55,890/- FOR STONE CUTTING CHARGES AND RS. 1,87,80,500/- FOR CARTAGE/CARRIAGE HEADS, HAS SUBMITTED THAT THIS EXPENDITURE WAS INCURRED BY THE APPELLANT BY HIRING INDIVIDUAL LABOUR AT ITS REMOTE SITES OR VILLAGES AND DAILY PAYMENTS THOUGH ITS SITE SUPE RVISOR OR EMPLOYEES. THESE LABOURS WERE NOT REGULAR LABOU R. ALSO TEMPORARY LABOURS WERE DEPLOYED AT MULTIPLE REMOTE SITES, THEREFORE, THE ASSESSEE OR HIS SUPERV ISORS HAVE WITHDRAWN MONEY FROM BANK ACCOUNTS FOR PAYMENT TO THE LABOUR. THEREFORE, THERE IS NO LIABILITY FO R TDS U/S 40(A)(IA). THE ORIGINAL VOUCHERS HAVE BEEN VERIFIE D BY THE A.O. REGARDING THE ADDITION MADE IN RESPECT OF STONE ACIT VS. KAILASH SINGH ITAT NO. 571/IND/2016 7 CUTTING AND FOR CARTAGE/CARRIAGE HEADS IT IS SUBMIT TED BY THE A.O. THAT THERE IS NO ANY AGREEMENT WITH ANY AGENCY OR SUBCONTRACTOR FOR CARTAGE OR SUPPLY OF GOODS. ALSO THERE IS NO SINGLE PAYMENT TO INDIVIDUAL PARTY MORE THAN RS.50,000/- DURING THE YEAR UNDER CONSIDERATION. THEREFORE, THE PROVISION OF SECTION 194C IS NOT APPLICABLE. THE ORIGINAL VOUCHERS HAVE BEEN PRODUCE D BY THE ASSESSEE FOR VERIFICATION. 8.5 THEREFORE, IN VIEW OF THE REMAND REPORT AND VERIFICATION OF THE VOUCHERS BY THE A.O., THE CONTE NTION OF THE APPELLANT IS ACCEPTED AND GROUND NO. 4 IS ALLOW ED. 6. FROM A PERUSAL OF REMAND REPORT OF THE ASSESSING OFFICER AND THE FINDINGS OF THE COMMISSIONER OF INCO ME TAX (APPEALS) WHICH GO UNCONTROVERTED BY THE REVENUE, WE FIND NO INFIRMITY IN THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS) DELETING BOTH THE DISALLOWANCES. WE ACIT VS. KAILASH SINGH ITAT NO. 571/IND/2016 8 ACCORDINGLY UPHOLD THE SAME AND DISMISS BOTH THE GROUN DS OF THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED PRONOUNCED IN OPEN COURT ON 28 FEBRUARY, 2018. SD SD (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER 28 TH FEBRUARY, 2018 DN/- COPY TO APPELLANT/RESPODENT/PR.CIT/CIT(A)/DR/GUAR D FILE