The DCIT, Circle-4, Ahmedabad V. Gopinath Chem-Tech Ltd., Ahmedabad

ITA 733/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85711 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 07-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH SR D R

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD , , , , , ,, , BEFORE SHRI MUKUL KUMAR SHRAWAT , JUDICIAL MEMBER AND , SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER , !' ! # $ ITA NO. 733/AHD/2011 ASSESSMENT YEAR :2006-07 THE DCIT, CIRCLE-4, AHMEDABAD V/S . GOPINATH CHEM-TECH LTD. A-514, ATMA HOUSE, OPP. OLD RBI, ASHRAM ROAD, AHMEDABAD PAN NO. AA C C G3945M (APPELLANT) .. (RESPONDENT) %& ' ( ! /BY APPELLANT SHRI DINESH SINGH, SR. D.R. )*%& ' ( ! /BY RESPONDENT SHRI TUSHAR P. HEMANI, A.R. + ' ' /DATE OF HEARING 13.02.2015 ,-. ' ' /DATE OF PRONOUNCEMENT 20.02.2015 O R D E R PER : SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF LD. CIT(A)-XX, AHMEDABAD, DATED 03.12.2010 FOR THE ASSESSMENT YEAR 2006-07. 2. THE FACTS AS CULLED OUT FROM THE MATERIALS ON RE CORD ARE AS UNDER: 3. THE ASSESSEE IS A COMPANY STATED TO BE ENGAGED I N MANUFACTURING OF CHEMICALS. IT ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 06-07 ON 30.12.2006 DECLARING TOTAL INCOME AT RS. 47,55,120/ -. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAM ED U/S.143(3) VIDE ORDER DATED 30.12.2008 AND THE TOTAL INCOME WAS DETERMINE D AT RS.62,93,140/-. I.T.A. NO. 733/AHD/2011 A.Y. 06-07 (DCIT VS. GOPINATH CHEM-TECH LTD.) PAGE 2 AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED TH E MATTER BEFORE THE CIT(A) WHO VIDE ORDER DATED 03.12.2010 GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), THE REV ENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING EFFECTIVE GROUND : 1). THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE DISALLOWANCE OF RS.13,98,957/- MADE BY THE ASSESSIN G OFFICER U/S.40(A)(IA), WITHOUT PROPERLY APPRECIATING THE FA CTS AND MATERIALS BROUGHT ON RECORD BY THE ASSESSING OFFICER. 4. DURING COURSE OF ASSESSMENT PROCEEDINGS AND ON P ERUSING THE DETAILS OF POLLUTION EXPENSES, A.O. NOTICED THAT ASSESSEE HAD DEBITED RS. 22,93,124/-. ON FURTHER SCRUTINY OF THE ACCOUNT HE NOTICED THAT PAYMENTS WERE MADE TO RAMESHBHAI K. BHARWAD (RS.13,45,510/-) AND TO PRADIP AGRAWAL (RS.64,800/-). ON THE BASIS OF DETAILS SUBMITTED B Y ASSESSEE, A.O. NOTED THAT ASSESSEE HAD SUBMITTED SELF SUPPORTED VOUCHERS IN R ELATION TO SUPPLY OF HYDROLIC LIME. FROM THE VOUCHERS, HE ALSO NOTICED THAT VOUCHERS WERE ISSUED IN THE YEAR 2008. HE ALSO NOTICED THAT ASSESSEE H AD DEDUCTED TDS ONLY ON PAYMENT OF RS.35,880/- OUT OF TOTAL PAYMENT OF RS.1 3,45,510/- TO RAMESHBHAI K. BHARWAD. HE WAS THEREFORE OF THE VIEW THAT THE PAYMENT MADE TO THE AFORESAID TWO PERSONS WERE TOWARDS CONTRACT PAYMENT FOR SUPPLY OF LABOUR SERVICES. A.O. WAS THEREFORE OF THE VIEW THAT SINC E ASSESSEE HAS NOT DEDUCTED TDS AND IN VIEW OF SELF SUPPORTED VOUCHERS WHICH DID NOT PERTAIN TO THE ASSESSMENT YEAR UNDER CONSIDERATION, HE DISALLO WED THE AGGREGATE PAYMENT OF RS.13,74,430/-. I.T.A. NO. 733/AHD/2011 A.Y. 06-07 (DCIT VS. GOPINATH CHEM-TECH LTD.) PAGE 3 5. AGGRIEVED BY THE ORDER OF A.O., THE ASSESSEE CAR RIED THE MATTER BEFORE THE CIT(A). CIT(A) HAVING CONSIDERED THE SAME, REM AND REPORT AND THE REPLY OF ASSESSEE TO THE REMAND REPORT DELETED THE ADDITI ON BY HOLDING AS UNDER: 3.3 I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT O RDER, THE SUBMISSIONS OF THE REMAND REPORT OF THE AO AND THE REJOINDER SUBMI TTED BY THE AR OF THE APPELLANT ON THE REMAND REPORT. IT IS SEEN THAT THE AO HAS MADE THE ADDITION OBSERVING THAT THE APPELLANT HAD NOT DEDUCTED TDS O N PAYMENTS MADE FOR SERVICES RENDERED, WHILE EXAMINING THE DETAILS FILE D BEFORE HIM, HE NOTICED THAT THE APPELLANT HAD PRESENTED PURCHASE BILLS FRO M SHRI RAMESHBHAI K BHARWAD AND SHRI PRADIP AGARWAL. THE YEAR OF ISSUE OF THE VOUCHERS WAS 2008. THE AO HENCE HELD THAT THE APPELLANT'S CONTEN TION THAT THE PAYMENTS ARE MADE FOR PURCHASE OF MATERIAL WAS NOT CORRECT. HE HAS MADE THE ADDITION UNDER SECTION 40 (A) (IA) OF THE IT ACT 1961. 3.3(I) THE AR OF THE APPELLANT SUBMITTED THAT PURCH ASES FROM SHRI RAMESHBHAI K. BHARWAD AND SHRI PRADIP AGARWAL WERE ACTUALLY MADE DURING THE FINANCIAL YEAR 2005-06 WHICH WAS THE RELEVANT P ERIOD. THE AR OF THE APPELLANT STATED THAT IN THE DUPLICATE BILLS FOR PU RCHASE OF HYDRO LIME BEEN ISSUED BY SHRI RAMESHBHAI K BHARWAD AND SHRI PRADIP AGARWAL, THE YEAR WAS WRONGLY MENTIONED BECAUSE THE DUPLICATE BILLS W ERE ISSUED IN 2008. WHEN THE MISTAKE WAS BROUGHT TO THE NOTICE OF THE P ARTIES THEY MADE THE NECESSARY CORRECTION IN THE BILLS. 3.3(II) IT IS SEEN THAT THESE CONTENTIONS WERE BROU GHT TO THE NOTICE OF THE AO AND HE WAS ASKED TO EXAMINE THIS ASPECT REGARDING T HE CORRECTIONS IN THE BILLS IN REMAND PROCEEDINGS. IT IS SEEN HOWEVER THAT THE AO HAS NOT MADE ANY INQUIRIES WHATSOEVER REGARDING THIS ASPECT. HE HAS MERELY RELIED ON THE FACT THAT THE MENTIONED IN THE ORIGINAL BILLS WAS 2008. WHEN THE AR OF THE APPELLANT CLEARLY STATED THAT THE PAYMENT FOR THE A BOVE BILLS WAS MADE BY ACCOUNT PAYEE CHEQUES THE AO SHOULD HAVE EXAMINED T HE PERSONS FROM WHOM THE MATERIALS WERE PURCHASED AND EXAMINED THE PAYMENTS. INSTEAD OF MAKING ANY VERIFICATION THE AO HAS MERELY REITERATE D THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER. I.T.A. NO. 733/AHD/2011 A.Y. 06-07 (DCIT VS. GOPINATH CHEM-TECH LTD.) PAGE 4 IT IS SEEN THAT THE PAYMENT FOR THE ABOVE PURCHASE IS WAS MADE TO THE SAME PARTIES FROM WHOM IT STATED TO BE MADE DURING THE C OURSE OF ASSESSMENT PROCEEDINGS. THE PAYMENTS ARE BY ACCOUNT PAYEE CHEQ UES WHICH MATCH WITH THE DETAILS OF THE BILLS ISSUED BY THESE PARTIES IS ALSO SEEN THAT THE PARTIES AS HAS HAVE CORRECTED THE DATE IN THE BILLS AND HAVE A LSO SIGNED AT THE PLACE WHERE THE CORRECTION IS MADE. 3.3(III) IN VIEW OF THE ABOVE, THE CONTENTION OF TH E AR THAT THE PURCHASES WERE IN FACT MADE WITHIN THE RELEVANT PERIOD AND THAT TH E DATE WAS WRONGLY MENTIONED IN THE DUPLICATE BILLS WHICH WAS SUBSEQUE NTLY CORRECTED BY THE PARTIES IS CORRECT. THE ADDITION MADE BY THE AO IS NOT JUSTIFIED BECAUSE THE AO HAS MADE THE ADDITION TREATING THE PURCHASES AND SERVICES RENDERED. IN VIEW OF THE ABOVE THE ADDITION MADE BY THE AO IS DELETED. 6. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US. 7. BEFORE US, LD. SR. D.R. SUPPORTED THE ORDER OF A .O. LD. A.R. ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE THE A.O . AND CIT(A) AND FURTHER SUBMITTED THAT THE PAYMENTS WERE MADE IN RELATION T O SUPPLY OF MATERIAL AND THEREFORE, NO TAX WAS REQUIRED TO BE DEDUCTED AT SO URCE. HE FURTHER SUBMITTED THAT PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES AN D THE DETAILS OF WHICH MATCHED WITH THE BILLS ISSUED BY THE CONCERNED PART IES. HE THUS SUPPORTED THE ORDER OF CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE ALLOWING THE CLA IM OF THE ASSESSEE HAD NOTED THAT DURING REMAND PROCEEDING, A.O. DID NOT M AKE ANY INQUIRY WITH I.T.A. NO. 733/AHD/2011 A.Y. 06-07 (DCIT VS. GOPINATH CHEM-TECH LTD.) PAGE 5 RESPECT TO SUPPLY OF MATERIAL IN YEAR UNDER CONSIDE RATION AND THE ISSUE OF VOUCHERS TO BE OF 2008. HE FURTHER NOTED THAT A.O. HAD ALSO NOT EXAMINED DURING REMAND PROCEEDING THE PERSONS FROM WHOM ASSE SSEE HAS STATED TO HAVE PURCHASED THE MATERIALS AND HAD EXAMINED THE P AYMENT. WE FURTHER FIND THAT LD. CIT(A) WHILE GRANTING RELIEF TO ASSES SEE HAS GIVEN FINDING THAT THE PURCHASES WERE IN FACT MADE IN THE PERIOD UNDER CON SIDERATION AND THE DATE WAS WRONGLY MENTIONED IN THE DUPLICATE BILLS WHICH WAS SUBSEQUENTLY CORRECTED BY THE PARTIES. BEFORE US, REVENUE HAS N OT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE FINDING OF CIT(A). WE THE REFORE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A). THUS, THIS GRO UND OF REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20/02/2015 SD/- SD/- ( MUKUL KUMAR SHRAWAT ) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA !/ !/ !/ !/ ' '' ' )0 )0 )0 )0 1!0. 1!0. 1!0. 1!0. / COPY OF ORDER FORWARDED TO:- 1. %& / APPELLANT 2. )*%& / RESPONDENT 3. 6 / CONCERNED CIT 4. 6- / CIT (A) 5. 0:; ) , , / DR, ITAT, AHMEDABAD 6. ;=> ?@ / GUARD FILE. BY ORDER/ !/ !, A/ C , $