M/s Satyam Builders, V. DCIT,

ITA 83/RAN/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85451 (ITAT-RANCHI)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 03-03-2014
• Court: TRIBUNAL
• Department Lawyers: SHR RAKESH KR DAS JCITLD
• Assessee Lawyers: P S PAUL CA LD
• Keywords: Principle of natural justice
• Section: 40A(3)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, RANCHI BEFORE HON'BLE SHRI H.L. KARWA, PRESIDENT , AND HON'BLE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 83 /RAN/201 4 A.Y 2010 - 11 M/S. SATYAM BUILDERS VS. D.C.I.T, CIR - 3, JSR M/S. PAN AAYFS5841B ( APPELLANT ) ( RESPONDENT ) FOR THE APPELLANT :SHRI P.S PAUL, CA, LD.AR FOR THE RESPONDENT : SHR RAKESH KR. DAS, JCIT/LD.DR DATE OF HEARING : 01 - 12 - 2014 DATE OF PRONOUNCEMENT: 01 - 12 - 2014 O R D E R SHRI B.R. BASKARAN, ACCOUNTANT MEMBER : THIS APPEAL F ILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29 - 01 - 2014 PASSED BY LD. CIT(A) , JAMSHEDP UR AND IT RELATES TO THE ASSESSMENT YEAR 2010 - 11. 2. THE SOLITARY ISSUE ADJUDICATING IN THIS APPEAL RELATES TO THE DISALLOWANCE MADE U/S. 40A(3) OF THE ACT 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE NOTICE THAT THE ASSESSEE IS A CIVIL CONTRACTOR AS WELL AS TRADER OF IRON ORE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS MADE PAYMENTS TO VARIOUS PERSONS IN CASH IN EXCESS OF RS.20,000/ - IN VIOLATION OF PROVISIONS OF SECTION 40A (3) OF THE ACT. HENCE, THE ASSESSING OFFICER DISALLOWED A SUM OF RS. 1,09,86,149/ - U/S. 40A(3) OF THE ACT. THE LD.CIT(A) ALSO CONFIRMED THE SAME. 2 ITA NO. 83/RAN/14 M/S. SATYAM BUILDERS 4. THE LD.AR APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THE ASSESSEE CARRIED OUT THE CONTRACT WORKS A T REMOTE PLACES WHERE NO BANKING FACILITIES WAS AVAILABLE. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS MADE THE PAYMENT TO THE RESIDENTS OF THAT PLACE FOR SUPPLY OF MATERIALS AS WELL AS FOR CARRYING OUT CONTRACT WORKS. FURTHER, HE SUBMITTED THAT THE S AID PAYMENTS ARE COVERED BY THE EXCEPTION GIVEN UNDER RULE 6DD (G) OF THE I.T RULES 1962. THE LD.AR FURTHER SUBMITTED THAT THE ASSESSEE HAS OBTAINED AFFIDAVITS FROM THE RECIPIENTS TO PROVE THAT THEY ARE THE RESIDENTS FROM THE PLACES, WHERE BANKING FACI LITIES ARE NOT AVAILABLE. ACCORDINGLY, HE SUBMITTED THAT THE TAX AUTHORITIES HAVE NOT PROPERLY APPRECIATED THE FACTS PREVAILING IN THE INSTANT CASE. THE LD. AR FURTHER PLACED HIS RELIANCE ON THE DECISION OF THE HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF M/S. ANUPAM TELE SERVICES VS. I.T.O REPORTED IN (2014) 366 ITR 122 (GUJ.). 5. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE AFFIDAVITS AND OTHER DOCUMENTS FILED BY THE ASSESSEE AS WELL AS CLAIM PUT FORTH BY THE LD.AR REQUIRES VERIFICATION. 6. THERE SHOULD NOT BE ANY DISPUTE THAT DISALLOWANCE MANDATED U/S. 40A(3) OF THE ACT IS NOT REQUIRED TO BE MADE, IF THE PAYMENTS ARE COVERED BY THE EXCEPTION GIVEN RULE 6DD OF THE I.T RULES 1962. THE CONTENTION OF THE LD.AR IS THAT THE IMPUGNED PAYMENTS ARE COVERED BY THE EXCEPTION GIVEN IN RULE 6DD(G) OF THE I.T RULES 1962. ACCORDING TO THE LD. A.R, THE ASSESSEE COULD SHOW THAT THE IMPUGNED PAYMENTS ARE COVERED BY THE EXCEPTION GIVEN IN RULE 6DD BY FURNISHING NECESSARY DOCUMENTS. UNDER THE SET OF FACTS, IN THE INTEREST OF NATURAL JUSTICE, WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD BE PROVIDED ONE MORE OPPORTUNITY TO PROVE ITS CLAIM. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD.CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSES SING OFFICER WITH THE DIRECTION TO EXAMINE THE SAME AFRESH AFTER CONSIDERING THE INFORMATION/EXPLANATION FURNISHED BY THE ASSESSEE, AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 3 ITA NO. 83/RAN/14 M/S. SATYAM BUILDERS 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED ACCORDINGLY ON 01 - 12 - 2014 SD/ - SD/ - [ H.L. KARWA ] [ B.R. BASKARAN ] PRESIDENT ACCOUNTANT MEMBER DT. 01 - 12 - 2014 PLACE : RANCHI PP, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT : 2 THE RESPONDENT: 3..THE CIT, 4.THE CIT(A), 5.DR, ITAT CIRCUIT BENCH, RANCHI 6. GUARD FILE. TR UE COPY, BY ORDER, ASSTT. REGISTRAR 4 ITA NO. 83/RAN/14 M/S. SATYAM BUILDERS 1. DATE OF DICTATION ............. 01 - 12 - 2014....................... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ........................OTHER MEMBER ..... 02 - 12 - 2014........................ 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. ..................... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT................................ 01 - 12 - - 2014 ................................................... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S ................ 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK ....................................... 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ......................................... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................................................................................................. 9. DATE OF D ESPATCH OF THE ORDER ..............................................................