SHRI GANGA RAM CHOUDHARY, JAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-7, JAIPUR

ITA 655/JPR/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4955 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 11-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONISHA CHOUDHARY CIT DHK
• Assessee Lawyers: DEVANG GARGIEYA ITP
• Keywords: TDS
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH B,(VC) JAIPUR JH LANHI XKSLKBZ] U;KF;D LNL; ,O A JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NO. 655/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14. SHRI GANGA RAM CHOUDHARY, TADAWALA BHAWAN, VILLAGE - SAIPURA, SANGANER, JAIPUR. CUKE VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-7, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAQPC 5542 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI DEVANG GARGIEYA, (ITP) JKTLO DH VKSJ LS@ REVENUE BY : SMT. MONISHA CHOUDHARY (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27.01.2021. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 09/02/2021 . VKNS'K@ ORDER PER SANDEEP GOSAIN, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 28.02.2018 OF LD. CIT (A)-3, JAIPUR FOR THE ASSESSMENT YEAR 2013- 14. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE IMPUGNED ADDITION AND DISALLOWANCES MADE I N THE ORDER U/S 143(3) OF THE ACT DATED 21.03.2016 ARE BAD IN LAW A ND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS O THER REASONS AND HENCE, THE SAME KINDLY BE DELETED. 2 ITA NO. 655/JP/2018 SHRI GANGA RAM CHOUDHARY, JAIPUR. 2. RS. 5,00,000/-: THE LD. CIT (A) ERRED IN LAW AS WELL AS ON THE ACTS OF THE CASE IN PARTLY CONFIRMING THE DISALLOWA NCE OF RS. 5,00,000/- MADE BY THE AO ON ACCOUNT OF THE DEVELOP MENT EXPENSES OUT OF TOTAL DEVELOPMENT EXPENSES OF RS. 4 5,92,528/-. THE DISALLOWANCE SO MADE & PARTLY CONFIRMED BY THE LD. CIT (A), IS CONTRARY TO THE PROVISIONS OF LAW AND FACTS HENC E, KINDLY BE DELETED IN FULL. 3. THE LD. AO FURTHER ERRED IN LAW AS WELL AS ON TH E FACTS OF THE CASE IN CHARGING INTEREST U/S 234 OF THE ACT. THE A PPELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING AND WITHDR AWAL OF ANY SUCH INTEREST. THE INTEREST SO CHARGED/WITHDRAWN, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. 4. THE APPELLANT PRAYS YOUR HONOUR INDULGENCES TO A DD, AMEND OR ALTER OF OR ANY OF THE GROUNDS OF APPEAL ON OR BEFO RE THE DATE OF HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF BUILDER AND PROPERTY DEVELOPER. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 ON 13.09.201 3 DECLARING TOTAL INCOME OF RS. 33,13,290/-. THE CASE OF THE ASSESSEE WAS SELE CTED FOR SCRUTINY ASSESSMENT. WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 14 3(3), THE A.O. MADE THE ADDITION OF RS. 9,00,000/- OUT OF EXPENSES CLAIMED OF RS. 45,92,528/- TO COVER UP THE POSSIBLE LEAKAGE. ON APPEAL FILED BEFORE THE L D. CIT (A), THE LD. CIT (A) SUSTAINED THE ADDITION OF RS. 5,00,000/- CONSIDERIN G THAT THE APPELLANT FAILED TO FILE ANY EXPLANATION OR EVIDENCES WHICH PROVE THAT DEVEL OPMENT EXPENSES ARE FULLY VOUCHED OR VERIFIABLE. THE NET PROFIT RATE IS ALSO DECREASED FROM 10.35% TO 10.11% AND THE DEVELOPMENT EXPENSES ARE NOT FULLY VOUCHED. THE LD. CIT (A) CONSIDERING THE NATURE OF BUSINESS AND EXPENSES, RESTRICTED THE ADDITION TO RS. 5,00,000/-. 3. AGGRIEVED BY THE ORDER OF THE LD. CIT (A), THE A SSESSEE HAS PREFERRED THIS APPEAL BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE 3 ITA NO. 655/JP/2018 SHRI GANGA RAM CHOUDHARY, JAIPUR. ADDITION/DISALLOWANCE MADE BY THE AO UNDER SECTION 143(3) IS BAD IN LAW AND THE LD. CIT (A) HAS COMMITTED AN ERROR IN PARTLY CONFIRMING THE DISALLOWANCE OF RS. 5,00,000/- MADE BY THE AO ON ACCOUNT OF DEVELOPMENT EXPENSES OUT OF TOTAL DEVELOPMENT EXPENSES OF RS. 45,92,528/-. THE LD. A /R ALSO REITERATED THE SAME ARGUMENTS AS MADE BY HIM BEFORE THE LD. CIT (A) WHI CH ARE CONTAINED IN PARA 4.2 OF THE CIT(A)S ORDER AS UNDER :- 4.2. (1) DEVELOPMENT EXPENSES RS. 1162583/- INCUR RED IN CASH: OUT OF RS. 45,92,528/- DEVELOPMENT EXPENSES RS. 116258 3/- PAID TO JDA FOR INTERNAL DEVELOPMENT CHARGES, SITE PLAN CHARGES , LAND COST UNDER BSUP, URBAN ASSESSMENT AND OTHER CHARGES LEVIED BY JDA. ALL THESE EXPENSES SUPPORTED BY CHALLAN. COPY OF THESE CHALLA N PRODUCED BEFORE L.A.O. IN ASSESSMENT PROCEEDING BY WIDE LETTER DATE D 05.11.2015. THESE WAS NO LEAKAGE OF REVENUE. EXPENSES ARE PROPE RLY SUPPORTED BY CHALLAN. (2) DEVELOPMENT EXPENSES FOR RS. 3429945/- RELATED TO THREE PARTIES (I) KUDALIYA CONSTRUCTION (II) NAND LAL THA KEDAR (III) JAGDISH NARAYAN MEENA. THESE ALL EXPENSES SUPPORTED BY INVO ICES. COPY OF SUCH INVOICE PRODUCED BEFORE L.A.O. FOR VERIFICATIO N. IN INVOICES NATURE OF EXPENSES ALSO MENTIONED. ALL BILL WERE PAKKA BIL L AND TDS DEDUCTED ON ALL THESE EXPENSES WHICH WAS ADMITTED BY L.A.O. IN ASSESSMENT ORDER HOWEVER THE PAYMENT MADE TO 3 CONTRACTOR IS SUBJECT TO TDS AND ASSESSEE HAS PROPERLY COMPLIED IN THIS REGARD SO L.A.O MAKE ADDITION ON THE GROUND THAT SOME KACCHI SLIPS WHERE NAME AND COMPLETE ADDRESS OF PAYEE IS NOT MENTION WAS UNJUST IFIED AS L.A.O GOODSELF ADMITTED THAT T.D.S WAS DEDUCTED ON BILLS BY ASSESSEE. SECONDLY ASSESSEE PRODUCED CONFIRMATION OF ACCOUNTS OF ALL THREE PARTIES. THERE IS NO LEAKAGE OF REVENUE ON THIS ACC OUNT. ALL EXPENDITURE DULY SUPPORTED AND NON OF EXPENDITURE INCURRED BY A SSESSEE WHICH WAS SUPPORTED BY KACHHI-SLIP ETC. (3) THAT DURING THE YEAR PAYMENT WAS MADE TO KUDALI YA CONSTRUCTION BY CHEQUE AND NO PAYMENT MADE IN CASH DURING THE YEAR. THUS IT IS CLEAR THAT ASSESSEE DID NOT MADE ANY PAY MENT IN CASH TO THREE PARTIES DURING THE YEAR AND ALSO NO PAYMENT M ADE BY KACHHI SLIP ALSO THERE WAS NO DEFECT IN VOUCHERS. ADDITION MADE BY L.A.O. ON THE ABOVE GROUND IS NOT JUSTIFIED. THERE FOR ADDITION O F RS. 900000/- NEED TO DELETED. (4) WE ARE ENCLOSING HERE WITH POWER OF ATTORNEY IN ORIGINAL. 4 ITA NO. 655/JP/2018 SHRI GANGA RAM CHOUDHARY, JAIPUR. 4. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPON T HE ORDER OF THE LD. CIT (APPEALS). 5. WE HAVE HEARD BOTH THE PARTIES. AFTER HAVING GO NE THROUGH THE PRESENT CASE AS WELL AS THE DOCUMENTS PLACED ON RECORD BY THE PA RTIES AND ORDERS PASSED BY THE REVENUE AUTHORITIES, WE FIND THAT DURING THE YEAR U NDER CONSIDERATION THE ASSESSEE HAD INCURRED AN AMOUNT OF RS. 45,92,528/- ON ACCOUN T OF DEVELOPMENT EXPENSES IN ADDITION TO PURCHASES OF RS. 5,39,451/-. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF THE DEVELOPMENT EXPENSES AND TO PRODUCE THE RELEVANT SUPPORTING VOU CHERS IN THIS REGARD. THE AO, ON SCRUTINY OF THESE EXPENSES NOTICED THAT OUT OF T OTAL EXPENSES CLAIMED AT RS. 45,92,528/-, THE ASSESSEE HAD MADE PAYMENT OF RS. 3 4,29,945/- TO THREE PARTIES, NAMELY, M/S. KUDALIYA CONSTRUCTION CO., SHRI NAND L AL THEKEDAR AND SHRI JAGDISH NARAIN MEENA. THE BALANCE EXPENDITURE AMOUNTING TO RS. 11,62,583/- WAS INCURRED IN CASH. DURING THE ASSESSMENT PROCEEDINGS, THE ASS ESSEE HAD STATED THAT THESE EXPENSES HAVE BEEN INCURRED IN RESPECT OF LEVELING OF LAND, SAND FILLING, CONSTRUCTION OF PILLARS OF DEMARCATION, LAYING OF GRIT ROADS, TR ACTOR CHARGES, WATER TANKER CHARGES ETC. THE REVENUE HAS TAKEN THE SPECIFIC STAND THAT THE ASSESSEE HAS NOT SUBMITTED COMPLETE DETAILS OF WORK DONE AND THERE IS A SINGLE BILL FOR WORK COMPLETED IN A MONTH OR MORE PERIOD, FOR WHICH DATE-WISE DETAILS O F JOB DONE AND PLOT-WISE AREA, WHERE THE JOB DONE WAS NOT MENTIONED. IT WAS FURTH ER SUBMITTED BY THE REVENUE THAT THE EXPENDITURE CLAIMED ARE NOT SUBJECT TO VER IFICATION WHEREAS THE ASSESSEE HAS TAKEN THE STAND THAT THE AMOUNT OF RS. 11,62,58 3/- WAS INCURRED ON ACCOUNT OF INTERNAL DEVELOPMENT EXPENSES WHICH WERE PAID TO JD A ON ACCOUNT OF SITE PLAN 5 ITA NO. 655/JP/2018 SHRI GANGA RAM CHOUDHARY, JAIPUR. CHARGES, LAND COST UNDER BSUP, URBAN ASSESSMENT AND OTHER CHARGES LEVIED BY JDA AND ALL THESE EXPENSES WERE SUPPORTED BY CHALLANS. THE COPIES OF THE CHALLANS HAVE ALREADY BEEN PLACED ON RECORD BY THE ASSESSEE. AS PER THE ASSESSEE THERE WAS NO REVENUE LEAKAGE AND ALL THE EXPENSES WERE SUPPORTED BY DOCUMENTARY EVIDENCE. AFTER HAVING GONE THROUGH THE FACTS OF THE PRESENT CASE AND THE DOCUMENTS PLACED ON RECORD, WE ARE OF THE VIEW THAT THE DEVELOPMENT EXPENSES OF RS. 34,29,945/- WERE PAID TO THREE PARTIES, NAMELY, M/S. KUDALIYA C ONSTRUCTION CO., SHRI NAND LAL THEKEDAR AND SHRI JAGDISH NARAIN MEENA AND ARE SUPP ORTED BY INVOICES, COPIES OF THE SAME HAVE ALREADY BEEN PLACED ON RECORD IN THE PAPER BOOK FILED BY THE ASSESSEE. IN THE INVOICES NATURE OF EXPENSES HAVE ALSO BEEN MENTIONED AND ALL THE BILLS ARE PACCA BILLS AND THE TDS DEDUCTED ON ALL T HESE PAYMENTS WAS ADMITTED BY THE AO IN THE ASSESSMENT ORDER. APART FROM THIS, T HE ASSESSEE HAS ALSO PRODUCED CONFIRMATION OF ACCOUNTS OF ALL THREE PARTIES AND T HE AMOUNT OF RS. 11,62,583/- WAS PAID BY THE ASSESSEE TO JDA. COPIES OF LEDGER ACCO UNT OF DEVELOPMENT EXPENSES ALONG WITH SUPPORTING VOUCHERS HAVE BEEN PLACED ON RECORD BY THE ASSESSEE IN THE PAPER BOOK AT PAGES 9 TO 14, COPY OF RELEVANT ANNEX URES OF AUDIT REPORT ALONG WITH BALANCE SHEET & PROFIT & LOSS ACCOUNT ARE AT PAGES 3 TO 8 OF THE PAPER BOOK, COPIES OF LEDGER ACCOUNTS OF THREE PARTIES, NAMELY, M/S. K UDALIYA CONSTRUCTION CO., SHRI NAND LAL THEKEDAR AND SHRI JAGDISH NARAIN MEENA HAV E BEEN PLACED ON RECORD AT PAPER BOOK PAGES 18 TO 20 ALONG WITH CONFIRMATION O F ACCOUNTS OF THESE PARTIES AT PAGES 21 TO 23, BILL OF DEVELOPMENT EXPENSES RELATE D TO THREE PARTIES ARE PACED AT PAPER BOOK PAGES 24 TO 34, COPY OF FORM 27A OF FOUR QUARTERS OF FY 2012-13 SHOWING TAX DEDUCTED AT SOURCE OF ABOVE MENTIONED T HREE PARTIES IS PLACED AT PAPER BOOK PAGES 35 TO 38 AND COPY OF FORM 26Q OF FOUR QU ARTERS OF FY 2012-13 IS PLACED 6 ITA NO. 655/JP/2018 SHRI GANGA RAM CHOUDHARY, JAIPUR. AT PAPER BOOK PAGES 39 TO 42. FROM ALL THESE DOCUM ENTS WE FIND THAT THE REVENUE HAS FAILED TO PIN-POINT SPECIFICALLY REGARDING THE MISSING BILLS WITH REGARD TO DEVELOPMENT EXPENSES. IN THE ABSENCE OF SPECIFIC D ETAILS OR OBJECTIONS, NO DISALLOWANCE CAN BE MADE OUT OF THE EXPENDITURES IN CURRED BY THE ASSESSEE. THE REVENUE HAS SIMPLY MENTIONED THAT SOME KACHHI SLIPS WERE MAINTAINED WHERE NAME AND COMPLETE ADDRESS OF PAYEE IS NOT MENTIONED HAS BEEN PLACED ON RECORD. BUT AT THE SAME TIME, THE AO AND LD. CIT (A) HAS FAILED TO POINT OUT AS TO WHICH DOCUMENTS DO NOT CONTAIN COMPLETE ADDRESS OF THE PAYEE. THE A O HAS NOT ISSUED ANY SUMMON TO THE RESPECTIVE PARTIES TO WHOM THE DOCUMENTS BEL ONGED. EVEN THE AO HAS NOT RECORDED THE STATEMENTS OF THE PERSONS WHO HAVE ISS UED THE BILLS. IN THE ABSENCE OF CONTRARY DETAILS FILED BY THE REVENUE, THE ADHOC DI SALLOWANCE OF EXPENSES IS NOT JUSTIFIED. THEREFORE, WE DELETE THE ADDITION. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 09/02/2021. SD/- SD/- FOE FLAG ;KNO LANHI XKSLKBZ (VIKRAM SINGH YADAV) ( SANDEEP GOSAIN ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:-09/ 02/02/2021. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-SHRI GANGA RAM CHOUDHARY, JAIPUR. 7 ITA NO. 655/JP/2018 SHRI GANGA RAM CHOUDHARY, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT-THE DCIT, CIRCLE-7, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 655/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR