M/s Sharda Associates, V. DCIT,

ITA 60/RAN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0002 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 27-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAUDHURY ORAM
• Assessee Lawyers: S S.K.PODARDEVESH PODAR
• Keywords: Depreciation; Corroborative evidences; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.60/RAN/2016 ASSESSMENT YEAR : 2009 - 2010 M/S. NANDLAL & SONS, PO: SUGNU, VIA: TATISILWAY, RANCHI. VS. ITO WARD - 2(2), RANCHI PAN/GIR NO. AADFN 3878 N (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : S/ SHRI S.K.PODAR /DEVESH PODAR , AR REVENUE BY : SHRI CHAUDHURY ORAM , DR DATE OF HEARING : 6 /12/ 2016 DATE OF PRONOUNCEMENT : 6 /12/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - RANCHI , DATED 19.1.2016 , FOR THE ASSESSMENT YEAR 2009 - 2010 . 2. THE SOLE ISSUE INVOLVE IN THIS APPEAL IS THAT THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF RS.1,02,020/ - BEING 10% OF THE TOTAL LABOUR CHARGES CLAIMED. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER ON EXAMINATION OF BOOKS OF ACCOUNT OBSERVED THAT THE ASSESSEE HAS CLAIMED LABO UR CHARGES OF RS.10,20,200/ - BUT SUPPORTING EVIDENCES WITH REGARD TO SAME COULD NOT BE FURNISHED. ON A QUERY BY THE 2 ITA NO.60/RAN/2016 ASSESSMENT YEAR : 2009 - 2010 ASSESSING OFFICER, THE ASSESSEE FILED COPY OF LEDGER ACCOUNT OF THE LABOUR CHARGES AND SUBMITTED THAT THE LABOUR EXPENSES CONSTITUTE 17.3% OF THE TOTAL EXPENSES. THE ASSESSING OFFICER OBSERVING THAT SINCE NO DETAILS/DOCUMENTS WERE FURNISHED, HE MADE AN ESTIMATED DISALLOWANCE O F 10% OF THE LABOUR CHARGES OF R S.10,20,200/ - AND ADDED RS.1,02,020/ - TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. BEFORE ME, LD A.R. OF THE ASSESSEE SUBMITTED THAT BOOKS OF ACCOUNT OF THE ASSESSEE ARE AUDITED AND NO ADVERSE COMMENT HAS BEEN MADE BY THE AUDITORS. HE SUBMITTED THAT AS THE ASSESSEE HAS DISCLOSED NET PROFIT OF 11% AFTER DEPRECIATION WHICH WAS MORE THAN THE NET PROFIT OF 10% DISCLOSED AFTER DEPRECIATION IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2008 - 09, AND ACCEPTED BY THE REVENUE, NO ADHOC DISALLOWANCE OUT OF LABOUR EXPENSES CLAIMED BY THE ASSE SSEE WAS JUSTIFIED AND SHOULD BE DELETED. 6. ON THE OTHER HAND, LD D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES. 7. I FIND THAT IN THE INSTANT CASE, THE ASSESSING OFFICER HAS DISALLOWED 10% OF LABOUR EXPENSES CLAIMED UNDER THE HEAD LABOUR CHARGES BY T HE ASSESSEE AND THEREBY MADE AN ADDITION OF RS.1,02,020/ - TO THE INCOME OF THE ASSESSEE ON THE GROUND THA T THE ASSESSEE FAILED TO PRODUCE THE DETAILS/DOCUMENTS FOR THE SAME. ON APPEAL, LD CIT(A) CONFIRMED THE SAME. I FIND THAT IN ABSENCE OF DETAILS/DOCUMENTS FOR LABOUR EXPENSES, 3 ITA NO.60/RAN/2016 ASSESSMENT YEAR : 2009 - 2010 THE ASSESSING OFFICER HAS ALLOWED 90% OF THE EXPENSES CLAIMED BY THE ASSESSEE AND ONLY MADE AN ESTIMATED DISALLOWANCE OF 10% OUT OF LABOUR CHARGES CLAIMED BY THE ASSESSEE. I FIND THAT THE GENUINENESS OF THE EXPENSES CLAIMED BY THE ASSESSEE FOR ITS BUSINESS PURPOSES IS NOT IN DOUBT OR DEBATE. FURTHER, THE SUBMISSION OF THE ASSESSEE THAT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2008 - 09, THE ASSESSEE HAS SHOWN NET PROFIT OF 10% W HICH WAS ACCEPTED BY THE DEPARTMENT AND THAT IN THE PRESENT YEAR OF APPEAL, THE ASSESSEE HAS SHOWN BETTER RESULTS BY DISCLOSING NET PROFIT @ 11% WHICH HAS REMAINED UNCONTROVERTED BY LD D.R. THUS, CONSIDERING THE PAST PERFORMANCE OF THE ASSESSEE , THE RESUL T SHOWN BY THE ASSESSEE DURIN G THE YEAR UNDER APPEAL COMPARES FAVOURABLE. THEREFORE, I DO NOT FIND ANY JUSTIFICATION IN THE ORDERS OF THE LOWER AUTHORITIES IN DISALLOWING 10% OF THE LABOUR EXPENSES AND MAKING AN ADDITION OF RS.1,02,020/ - TO THE INCOME OF THE ASSESSEE. HENCE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE ADDITION OF RS.1,02,020/ - AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 6 /12/2016 IN THE PRESENCE OF PARTIES. SD/ - (N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 6 /12 /2016 B.K.PARIDA, SPS 4 ITA NO.60/RAN/2016 ASSESSMENT YEAR : 2009 - 2010 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : M/S. NANDLAL & SONS, PO: SUGNU, VIA: TATISILWAY, RANCHI. 2. THE RESPONDENT. ITO WARD - 2(2), RANCHI 3. THE CIT(A) , RANCHI 4. CIT , RANCHI 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//