Shri Bhupendra V.Rathod, Baroda V. The Dy.CIT.,Circle-2(1), Baroda

ITA 658/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76683 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-05-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 01-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SHRI D.K TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTA NT MEMBER SHRI BHUPENDRA RATHOD, PROP. M/S. CAREWELL CONSTRUCTION, 16/B, SARASWATI SOCIETY, B/H ESIC HOSPITAL, GOTRI ROAD, BARODA (APPELLANT) VS DY. CIT, CIRCLE-2(1), BARODA (RESPONDENT) ASSESSEE BY: SRI MUKUND BAKSHI, A.R. REVENUE BY: SRI O.P. BATHEJA, SR.D.R. DATE OF HEARING : 05-05-2014 DATE OF PRONOUNCEMENT : 08-05-20 14 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-II BARODA DATED 04-11-2010. ITA NO. 658/AHD/2011 ASSESSMENT YEAR 2006-07 I.T.A NO.658/AHD/2011 A.Y. 2006-07 PAGE NO SRI BHUPENDRA V. RATHOD PROP. M/S CAREWELL CONSTRUC TION VS. DCIT 2 2. AT THE TIME OF HEARING ONLY FOLLOWING GROUND WAS PRESSED:- 1. LD. CIT(A) II, BARODA HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION TO THE EXTENT OF RS. 4,50,1 87/- TOWARDS SALARY AND LABOUR CHARGES PAID TO PERSONS COVERED U/S. 40A (2)(B) OF THE IT ACT, 1961, ON THE PLEA THAT THE APPELLANT FAILED TO PROVE THAT THE SAME WERE INCURRED AT ARMS LENGTH. THE SAID ADDIT ION BEING ERRONEOUS IN THE FACTS OF THE CASE AND IN LAW AND, THEREFORE, IS PRAYED TO BE DELETED. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENG AGED IN THE BUSINESS OF CIVIL CONSTRUCTION. RETURN OF INCOME WAS FILED BY HIM DECLARING TOTAL INCOME OF RS. 8,80,960/-. ON VERIFICATION OF THE D ETAILS FILED, THE AO NOTED THAT AS PER FORM NO. 3CD, THE ASSESSEE HAD MADE PAY MENT TO PERSONS COVERED U/S. 40A(2)(B) OF THE ACT AS UNDER:- NAME OF THE PERSON AMOUNT NATURE OF PAYMENT RELATIONSHIP SRI VISHRAMBHAI 72,000 RENT FATHER OF THE ASSESSEE SRI JAGDISHBHAI V. RATHOD 90,000 2,07,925 SALARY PROFESSIONALS SUPERVISION CHARGES BROTHER OF THE ASSESSEE SRI VAIBHAV B. RATHOD 90,000 2,10,335 SALARY PROFESSIONALS SUPERVISION CHARGES SON OF THE ASSESSEE SRI PRASHANTBHAI B. RATHOD 3,02,114 PROFESSIONALS SUPERVISION CHARGES SON OF THE ASSESSEE THE ASSESSEE WAS ASKED TO EXPLAIN THE EXPENSES CLAI MED AS THE PAYEES WERE PERSONS COVERED U/S. 40A(2)(B) OF THE ACT. T HE ASSESSEE ACCORDING TO AO FAILED TO PROVE THAT THE PAYMENT MADE TO ABOV E PERSONS WAS WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE A O THEREFORE ADDED THE SAME U/S. 40A(2)(B) OF THE INCOME TAX ACT. I.T.A NO.658/AHD/2011 A.Y. 2006-07 PAGE NO SRI BHUPENDRA V. RATHOD PROP. M/S CAREWELL CONSTRUC TION VS. DCIT 3 4. LD. CIT(A) AFTER TAKING INTO CONSIDERATION THE S UBMISSIONS OF THE ASSESSEE WHICH WERE REPRODUCED IN PARA 2.2 OF HIS O RDER, RESTRICTED THIS DISALLOWANCE TO 50% OF THE CLAIM MADE BY ASSESSEE A S BEFORE LD. CIT(A) ALSO THE ASSESSEE FAILED TO PROVE THAT THE PAYMENT MADE TO THESE PERSONS WAS WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSIN ESS. BEFORE US ALSO ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE HIS CLAI M THAT THE PAYMENT WAS EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND THEREFO RE WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THE SAME IS HEREBY UPHELD. 5. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) ( D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 08/05/2014 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,