M/s Runway Developers, Guna V. Addl. CIT-Range-3, Gwalior

ITA 85/AGR/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 56945 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 06-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AMIT SOGANI
• Keywords: Revised return
• Section: 244A; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.85/AGR/2010 ASSESSMENT YEAR: 2006-07 M/S. RUNWAY DEVELOPERS, VS. ADDL. COMMISSIONER OF INCOME TAX, 15, PANCHAYAT BHAWAN, RANGE-3, GWALIOR (M.P.) A.B. ROAD, GUNA (M.P.) (PAN: AAGFR 7704 J). ITA NO.94/AGR/2010 ASSESSMENT YEAR: 2006-07 JOINT COMMISSIONER OF INCOME TAX, VS. M/S. RUNWAY DEVELOPERS, RANGE-3, GWALIOR (M.P.). 15, PANCHAYAT BHAWAN, A.B. ROAD, GUNA (M.P.) (PAN: AAGFR 7704 J). (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI AMIT SOGANI, ADVOCATE REVENUE BY : SHRI WASEEM ARSHAD, SR. D.R. DATE OF HEARING : 15.03.2012 DATE OF PRONOUNCEMENT : 23.03.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: ITA NOS.85 & 94/AGR/2010 A.Y. 2006-07 2 THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND R EVENUE AGAINST THE ORDER DATED 19.01.2010 PASSED BY THE LD. CIT(A), GWALIOR FOR THE ASSESSMENT YEAR 2006-07. ITA NO.85/AGR/2010 BY THE ASSESSEE FOR A.Y. 2006-0 7 2. THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL ARE AS UNDER :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED A.O. ERRED IN DISALLOWING RS.11,82,904/- OUT OF FOLLOWIN G EXPENDITURE. A. WAGES PAYABLE A/C. B. SITE EXPENSES A/C C. FREIGHT AND CARTAGE A/C 2. THAT THE LEARNED A.O. ERRED IN CHARGING PENAL IN TEREST RS.2,25,598/- U/S. 234A, 234B, 234D OF I.T. ACT AND RS.29,172/- BEING WITHDRAWAL OF INTEREST ALLOWED U/S 244A OF THE ACT. 3. THE BRIEF FACTS OF THE CASE IN RESPECT OF GROUND NO.1 ARE THAT THE ASSESSEE IS A CIVIL CONTRACTOR. THE ASSESSEE HAS TAKEN CONTRACT WORK FROM M/S. TELECOMMUNICATION CONSULTANT INDIA LIMITED, BHOPAL. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED RS.8,91,324/- ON ACCOUNT OF WAGES PAYMENT, RS.1,45, 780/- ON ACCOUNT OF SITE EXPENSES AND RS.1,45,800/- ON ACCOUNT OF FREIGHT AN D CARTAGE. THE ASSESSEE COULD ITA NOS.85 & 94/AGR/2010 A.Y. 2006-07 3 NOT FURNISH DETAILS REGARDING WAGES EXPENSES TO THE PERIOD FOR WHICH THE AMOUNT WAS OUTSTANDING. THE ASSESSEE MAINTAINS WAGES PAYM ENT SHEET ON LOOSE PAPER. THE ASSESSEE HAS SHOWN OUTSTANDING PAYMENT ON ACCOU NT OF WAGES RS.8,56,824/- FROM 15.04.2006 TO 10.05.2006 AS ON 31 ST MARCH, 2006. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS SHOWN BOGUS OUTST ANDING LIABILITY. THEREFORE, THE AMOUNT IS TO BE ADDED TO THE TOTAL INCOME OF THE AS SESSEE. 4. SIMILAR IS THE POSITION IN RESPECT OF SITE EXPEN SES OF RS.1,45,780/- AS THE ASSESSEE FAILED TO FURNISH THE DETAILS REQUIRED BY THE ASSESSING OFFICER. 5. IN RESPECT OF AMOUNT OF RS.1,45,800/- FREIGHT AN D CARTAGE WAS ALSO OUTSTANDING AND THE ASSESSEE FAILED TO PRODUCE THE DETAILS OF THE EXPENSES. THEREFORE, THE ASSESSING OFFICER MADE THE ADDITION OF RS.1,45,800/-. THE ASSESSING OFFICER MADE ADDITION ON THE GROUND THAT THE ASSESSEE HAS FAILED TO JUSTIFY THE OUTSTANDING BALANCE AS ON 31.03.2006 IN RESPECT OF ALL THE ABOVE THREE ACCOUNTS. THESE EXPENSES WERE ALSO DISALLOWED BECA USE THESE WERE MADE BY THE ASSESSEE ON SELF-MADE VOUCHERS. THE PERSONS TO WHO M THESE PAYMENTS HAVE BEEN MADE ARE NOT IDENTIFIABLE HENCE EXPENSES ARE UNVERI FIABLE IN NATURE. THE ASSESSING OFFICER NOTED THAT NO SEPARATE DISALLOWANCE WAS MAD E OUT OF THESE EXPENSES AS THE ASSESSING OFFICER MADE THE ADDITION OF THE OUTSTAND ING LIABILITIES ON ACCOUNT OF ITA NOS.85 & 94/AGR/2010 A.Y. 2006-07 4 ABOVE THREE ACCOUNT WHICH COVERS DEFICIENCY IN MAIN TENANCE OF VOUCHERS AND OTHERS. THEREFORE, THE ASSESSING OFFICER MADE TOTA L ADDITION OF RS.8,91,324/-, RS.1,45,780/- AND RS.1,45,800/- ON ACCOUNT OF WAGES , SITE EXPENSES AND FREIGHT & CARTAGE EXPENSES RESPECTIVELY. THE CIT(A) CONFIRME D THE ACTION OF THE ASSESSING OFFICER FOLLOWING THE PAST HISTORY OF THE CASE. TH E RELEVANT FINDING OF THE CIT(A) IS REPRODUCED AS BELOW:- 3.1 DURING THE COURSE OF APPEAL PROCEEDINGS, WRITT EN SUBMISSIONS HAVE BEEN FILED BY THE APPELLANT. COPY OF LEDGER A CCOUNT OF SITE EXPENSES, WAGES AND FREIGHT & CARTAGE ALONGWITH VOU CHES HAVE BEEN SUBMITTED. THE SAME HAVE BEEN PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALSO. THESE VOUCHERS ARE FO UND TO BE SELF- MADE GIVING NO DETAIL OF THE RECIPIENT OF THE AMOUN T MENTIONED IN EACH VOUCHER. THE SAID EXPENSES HAVE BEEN CLAIMED TO BE INCURRED ON VARIOUS SITES AND PAYMENT MADE TO THE WORKER CONCER NED. ALL THE PAYMENTS HAVE BEEN MADE IN CASH. THE AMOUNT OF ADD ITION MADE RELATES BASICALLY TO OUTSTANDING LIABILITIES AS AT THE END OF THE FINANCIAL YEAR WHICH HAVE BEEN PAID DURING SUBSEQUENT YEAR, M AINLY IN THE MONTH OF APRIL & MAY. AS PER ITS PROFIT & LOSS ACC OUNT, THE APPELLANT HAS CLAIMED FREIGHT & CARTAGE AT RS.16,46,016/-, LA BOUR AND WAGES AT RS.25,89,785/-, SITE WAGES AND EXPENSES AT RS.1,59, 34,831/-, OUT OF WHICH THE AMOUNTS MENTIONED BY THE A.O. REPRESENTIN G OUTSTANDING LIABILITIES AT THE CLOSE OF THE FINANCIAL YEAR HAVE BEEN ADDED. THE A.O. HAS NOT MADE ANY SEPARATE ADDITION ON ACCOUNT OF TH ESE EXPENSES, THOUGH THEY HAVE BEEN FOUND TO BE OF UNVERIFIABLE N ATURE. IT IS ALSO SEEN FROM THE RECORDS THAT FOR A.Y. 2005-06 THE APP ELLANT HAS AGREED TO DISALLOWANCE OF RS.10 LAKHS BEING FOUND OF UNVER IFIABLE NATURE UNDER THESE HEADS. SIMILARLY, FOR A.Y. 2007-08, AD DITIONAL INCOME OF RS.19 LAKHS HAS BEEN ADDED TO ITS ORIGINAL INCOME O N ACCOUNT OF UNVERIFIABLE LABOUR CHARGES AND EXPENSES. REVISED RETURN FOR THE SAME HAS ALSO BEEN FILED FOR A.Y. 2007-08 SUBSEQUEN TLY. ITA NOS.85 & 94/AGR/2010 A.Y. 2006-07 5 3.2 ON THE BASIS OF FACTS MENTIONED ABOVE AND KEEPI NG IN VIEW THE PAST HISTORY OF THE APPELLANT ADDITION MADE BY THE A.O. AT RS.11,82,904/- ON ACCOUNT OF WAGES, SITE EXPENSES, FREIGHT & CARTAGE EXPENSES IS UPHELD, THOUGH FOR A DIFFERENT REASON. 6. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE IS THAT THE ASSESSING OFFICER MADE DISALLOWANCE WITHOUT REJECTING THE BOOKS OF AC COUNTS. THE ASSESSEE MAINTAINED PROPER BOOKS OF ACCOUNTS. LD. AUTHORISE D REPRESENTATIVE FURTHER SUBMITTED THAT LOOKING TO THE NATURE OF BUSINESS TH E ASSESSEE HAS TO MAINTAIN CERTAIN VOUCHERS AS POINTED OUT BY THE ASSESSING OFFICER. AS REGARDS THE DISALLOWANCE IN PAST, THE LD. AUTHORISED REPRESENTATIVE SUBMITTED T HAT TO PURCHASE PEACE THE ASSESSEE DID NOT AGITATE IN THOSE YEARS AND THERE I S NO APPEAL PENDING ON THIS ACCOUNT IN ASSESSMENT YEAR 2005-06 & 2007-08. 7. LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HA ND, RELIED UPON THE ORDER OF CIT(A) ON THE ISSUE. WE NOTICED THAT ON IDENTICAL SET OF FACTS THE CIT(A) FOLLOWED THE PAST HISTORY OF THE ASSESSEE AND SUSTAINED THE ADDITION. IN ASSESSMENT YEAR 2005-06, THE CIT(A) NOTED IN HIS ORDER THAT THE ASS ESSEE AGREED FOR DISALLOWANCE OF RS.10 LAKHS. SIMILARLY, RS.19 LAKHS HAS BEEN ADDED ON ACCOUNT OF UNVERIFIABLE LABOUR CHARGES AND EXPENSES. CONSIDERING THE NATUR E OF ASSESSEES BUSINESS AND ADMISSION BY THE ASSESSEE IN THE PAST, WE DO NOT FI ND ANY INFIRMITY IN THE ORDER OF ITA NOS.85 & 94/AGR/2010 A.Y. 2006-07 6 CIT(A). THE CIT(A) HAS RIGHTLY FOLLOWED THE PAST H ISTORY TO MAINTAIN CONSISTENCY. THE ASSESSEE FAILED TO POINT OUT ANY MATERIAL FACTS BASED ON WHICH A DIVERGENT VIEW CAN BE TAKEN IN THIS YEAR. IN THE LIGHT OF THE FAC TS, WE CONFIRM THE ORDER OF CIT(A) ON THE ISSUE. 8. AS REGARDS THE ISSUE RAISED IN GROUND NO.2 IN RE SPECT OF CHARGING OF INTEREST UNDER SECTIONS 234A, 234B & 234D OF THE ACT, SINCE THIS GROUND IS A CONSEQUENTIAL GROUND OF APPEAL, THEREFORE, THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. ITA NO.94/AGR/2010 BY THE REVENUE FOR A.Y. 2006-07 9. THE ONLY GROUND RAISED BY THE REVENUE IN ITS APP EAL IS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(APPEAL) HAS ERRED IN DELETING THE ADDITION OF R S.2,52,21,832/- ON ACCOUNT OF WORK IN PROGRESS. 10. THE BRIEF FACTS OF THIS GROUND ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS TAK EN CONTRACT FROM M/S. TELECOMMUNICATION CONSULTANT INDIA LIMITED, BHOPAL. M/S. TELECOMMUNICATION CONSULTANT INDIA LIMITED HAS INTIMATED THAT THE ASS ESSEE FIRM DONE TOTAL WORK OF ITA NOS.85 & 94/AGR/2010 A.Y. 2006-07 7 RS.19,40,10,160/- DURING THE F.Y. 2005-06. THE PAY MENT OF THIS AMOUNT OF RS.19,40,10,160/- WAS PAID AS UNDER :- FINANCIAL YEAR 05-06 AMOUNT PAID TDS 2005-06 16,87,88,328/- ` 43,53,589/- 2006-07 2,52,21,832/- ` 5,65,978/- 11. ASSESSING OFFICER NOTICED THAT THE ASSESSEE DID NOT SHOW ANY WORK IN PROGRESS IN THE YEAR UNDER CONSIDERATION WHEREAS AS PER THE INTIMATION BY THE AWARDER THE WORK DONE FOR THE YEAR UNDER CONSIDERAT ION OF WHICH PAYMENT RECEIVED IN SUBSEQUENT YEAR WAS RS.2,52,21,832/-. THE ASSES SING OFFICER TREATED THE SAID AMOUNT AS WORK IN PROGRESS AND ADDED TO THE TOTAL I NCOME OF THE ASSESSEE. THE CIT(A) DELETED THE ADDITION ACCEPTING THE ASSESSEE S CONTENTION THAT THE ASSESSEE DID NOT CARRY OUT ANY WORK OF THE AMOUNT OF RS.2,52 ,21,832/- DURING THE YEAR UNDER CONSIDERATION. THE RELEVANT FINDING OF THE CIT(A) IS REPRODUCED BELOW :- 4.3 IT IS ALSO SEEN FROM THE RECORDS THAT THE A.O. HAS MADE EXTENSIVE ENQUIRIES U/S.133(6) OF THE I.T. ACT FROM VARIOUS PARTIES FOR WHOM THE APPELLANT HAS CARRIED OUT THE WORK DURING THE YEAR AND FOUND NO DISCREPANCY IN CONTRACT RECEIPTS AND TAX D EDUCTED THEREON. AS PER COPY OF ACCOUNT OF TCIL, BALANCE OF RS.30,65 ,009/- WAS OUTSTANDING AS ON 31.3.06 WHICH HAS BEEN RECEIVED B Y THE APPELLANT COMPANY ON 7.4.06 AS PER ITS BANK STATEMENTS. THIS OUTSTANDING BALANCE DOES NOT CONTAIN THE AMOUNT OF RS.2,52,21,8 32/- WHICH HAS BEEN ADDED BY THE A.O. AS WORK IN PROGRESS. SINCE NO SUCH WORK HAS BEEN CARRIED OUT BY THE APPELLANT COMPANY AND IS NO T DEBITED IN ITS ITA NOS.85 & 94/AGR/2010 A.Y. 2006-07 8 BOOKS OF ACCOUNTS NOR ANY PAYMENT RECEIVED FOR THE SAME DURING THE YEAR, THE A.O. WAS NOT JUSTIFIED IN TREATING THE SA ID AMOUNT AS WORK IN PROGRESS. THE ADDITION OF RS.2,52,21,832/- IS, THE REFORE, DELETED. 12. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT THE VTH R.A . BILL RECEIVED BY THE ASSESSEE FROM M/S. TELECOMMUNICATION CONSULTANT INDIA LIMITE D WAS FOR RS.30,65,009/- ON 07.04.2006. THEREFORE, ON THE BASIS OF THIS FACT A LONE ONE CAN SAY THAT THERE WAS NO WORK IN PROGRESS OF RS.2,52,21,832/- AS ON 31.03.20 06. THE AWARDER M/S. TELECOMMUNICATION CONSULTANT INDIA LIMITED ISSUED T WO SEPARATE TDS CERTIFICATES PERTAINING TO TWO SEPARATE YEARS. THE ASSESSEE IS DEMONSTRATED BY FACTS AND FIGURES THAT THERE WAS NO WORK IN PROGRESS OR WORK CARRIED OUT BY THE ASSESSEE AS ON 31.03.2006 FOR RS.2,52,21,832/-. IT MAY BE A DIFFE RENT THING THAT THE AWARDER MAY MAKE CERTAIN ENTRY IN ITS RECORDS FOR SOME BENEFICI AL REASONS TO THEM. THEREFORE, WITHOUT MATERIAL FACTS ON RECORD MERELY ON THAT BAS IS WORK IN PROGRESS OF THE AWARDER CANNOT BE TAKEN AS RS.2,52,21,832/-, PARTIC ULARLY UNDER THE CIRCUMSTANCES WHEN SUBSEQUENT R.A. BILL WAS OF LESSER AMOUNT I.E. RS.30,65,009/-. WE FIND THAT THE CIT(A) HAS APPRECIATED THE FACTS OF THE CASE BE FORE DELETING THE ADDITION. IN THE LIGHT OF THE FACTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). THE ORDER OF CIT(A) IS CONFIRMED. ITA NOS.85 & 94/AGR/2010 A.Y. 2006-07 9 13. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE AND REVENUE ARE DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 23.03.2012) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 23 RD MARCH, 2012 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT RESPONDENT CIT CONCERNED CIT (APPEALS) CONCERNED D.R., ITAT AGRA BENCH, AGRA GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY