DCIT 16(3), MUMBAI V. OSIA GEMS, MUMBAI

ITA 8909/MUM/2010

• Counselvise Citation: 890919914 RSA 2010
• Duration Of Justice: 3 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-02-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 21-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B V ZHAVERI
• Keywords: Additional evidence; Retraction
• Section: 143(3); 147; 131; 148

Judgement Text

- 1 - VK;DJ VIHYH; VF/KDJ.K LH U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI JH JH JH JH ,U ,U,U ,U- -- - DS DSDS DS- -- - LSUH LSUH LSUH LSUH] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA JH LAT; XXZ JH LAT; XXZ JH LAT; XXZ JH LAT; XXZ] U;KF;D LNL; DS ] U;KF;D LNL; DS ] U;KF;D LNL; DS ] U;KF;D LNL; DS LE{K LE{K LE{K LE{K BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER VK;DJ VIHY LA[;K /ITA NO. 8909/MUM/2010 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR 2006-07 DCIT - 16(3), MATRU MANDIR, 2 ND FLOOR, R. NO. 206, TARDEO ROAD, MUMABI 400 007. CUKE@ VS. OSIA GEMS M/S VISHINDAS HOLARAM 135, SHREEJI CHAMBERS, OPERA HOUSE, MUMBAI 400 004. PAN: - AAAFO4949C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KKZFJRH DH VKSJ LS @ ASSESSEE BY SHRI B.V. ZHAVERI JKTLO DH VKSJ LS @ REVENUE BY SHRI RAVI PRAKASH VKNS'K@ VKNS'K@ VKNS'K@ VKNS'K@ ORDER PER N.K. SAINI, AM. THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORD ER DATED 28.9.2010 OF CIT(A)-27, MUMBAI. FOLLOWING GROUNDS H AVE BEEN RAISED IN THIS APPEAL: 1. THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A.O. OF RS. 59,88,389/- IN RESPECT OF LABOUR CHARGES AND RS. 2, 32,35,817/- IN RESPECT OF PURCHASES. 2. THE LD. CIT(A) ERRED IN RELYING ON THE DECISION OF THE LD. CIT(A), VALSAD WHEREIN THE LD. CIT(A), VALSAD DETERMINED THE INCOM E OF THE ASSESSEE BY ESTIMATING THE GROSS PROFIT AS WELL AS DISALLOWING CERTAIN LABOUR PAYMENTS MADE BY SHRI ANIL CHAHWALLA U/S. 40(A)(IA) OF THE A CT. LQUOKBZ DH RKJH[K@ DATE OF HEARING 03 - 02 - 2014 ?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT 07 - 02 - 2014 - 2 - 3. THE LD. CIT(A) FAILED TO APPRECIATE THAT SHRI ANIL CHAHWALLA FILED HIS RETRACTION THREE DAYLS LATER AND THE SAME HAVE TO B E TREATED AS ON AFTER THOUGHT. 4. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE STATE MENT OF THE ASSESSEE WERE RECORDED ON FOUR OCCASIONS CLEARLY SHOWING THAT THE STATEMENTS WERE VOLUNTARY IN NATURE AND THAT THE ASSESSEE HAS PARTI CIPATED IN SUCH PROCEEDINGS. 5. THE LD. CIT(A) FAILED TO PLACE THE ORDER OF LD. CIT (A), VALSAD BEFORE THE AO AND HENCE VIOLATED THE PROVISIONS OF THE RULE 46A O F THE I.T. RULES. THEREFORE, THE ORDER OF THE LD. CIT(A) IS BAD IN LA W. 6. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. FROM THE ABOVE GROUNDS IT IS GATHERED THAT THE M AIN GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF ADDITION MADE BY AO OF RS. 59,88,389/- IN RESPECT OF LABOUR CHARGES AND RS. 2, 32,35,817/- IN RESPECT OF PURCHASES 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ORIGINAL ASSESSMENT IN THIS CASE WAS FRAMED U/S 143(3) OF IT ACT, ( HEREINAFTER REFERRED AS THE ACT) AND PASSED ON 16.10.2008 AT AN INCOME OF RS. 2,03,6 6,040/-, WHICH WAS SHOWN IN THE RETURN BY THE ASSESSEE. THEREAFTER THE AO RECEIVED AN INTIMATION FROM DCIT, NAVSARI CIRCLE, NAVSARI THAT LABOUR CHARGES PAYMENT AND PURCHASES PAYMENTS MADE BY THE ASSESSEE TO SHRI ANILKUMAR CHAHWALLA, PROPRIETOR OF M/S PARTH CORPORATION AND M/S PADMAVATI GEMS ARE BOGUS. DURING THE YEAR THE ASSESSEE HAD MA DE LABOUR CHARGES PAYMENT OF RS. 59,88,389/- TO M/S PARTH CORPORATION AND CLAIMED PURCHASES PAYMENTS OF RS. 2,32,25,817/- MADE TO M/ S PADMAVATI GEMS. IN VIEW OF THE AFORESAID INFORMATION, ASSESSEES AS SESSMENT WAS RE- OPENED U/S 147 OF THE IT ACT BY ISSUING NOTICE U/S 148 OF THE ACT. 4. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDIN GS OBSERVED THAT SHRI ANILKUMAR CHAHWALLA PROPRIETOR OF M/S PA DMAVATI GEMS AND M/S PARTH CORPORATION HAD NO INFRASTRUCTURE TO C ARRY OUT LABOUR JOB AND - 3 - HE HIMSELF HAD ADMITTED IN THE STATEMENT RECORDED O N OATH U/S 131 OF THE IT ACT THAT HE HAD NOT EXECUTED ANY LABOUR WORK AS WELL AS PURCHASE AND SALE TRANSACTIONS ALL THESE WERE ONLY PAPER TRANSA CTIONS FOR WHICH HE HAD RECEIVED COMMISSION WHICH WAS DECLARED IN HIS RETUR N OF INCOME. THE AO MADE THE IMPUGNED ADDITIONS BY OBSERVING IN PARA 6 OF THE ASSESSMENT ORDER DATED 21.12.2009, WHICH READS AS UNDER;- AS THE ASSESSEE HAS CLAIMED LABOUR CHARGES OF RS. 59,88,389/- TO M/S PARTH CORPORATION AND PURCHASES OF RS. 2,32,25,817/ - TO M/S PADMAVATI GEMS, IN VIEW OF THE ABOVE MENTIONED INTIMATION AND ALSO THE ADMISSION BY LABOUR CONTRACTOR UNDER OATH U/S 131 OF THE INCOME TAX ACT , 1961 THAT HE HAS NOT CARRIED OUT ANY LABOUR JOB TO THE ASSESSEE AND NOT MADE NAY SALES TO THE ASSESSEE, THE LABOUR CHARGES CLAIM AND PURCHASES CL AIM MADE BY THE ASSESSEE ARE HELD AS BOGUS AND DISALLOWED. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT ASSESSMENT WAS FRAMED BY THE AO DISREGARDING THE MATERIALS PLACED BEFORE HIM THE ATTENTION WAS DRAWN TOWARDS THE CONTENTS OF THE ASSESSMENT ORDER WHEREIN ADDITION W AS MADE PURELY ON ACCOUNT OF INTIMATION RECEIVED FROM DCIT NAVSARI CI RCLE. IT WAS FURTHER SUBMITTED THAT EXCEPT REPRODUCING THE EXTRACT OF TH E INTIMATION RECEIVED FROM DCIT, NAVSARI CIRCLE AND MAKING BARE REFERENCE TO THE STATEMENT RECORDED U/S 131 OF THE ACT FROM ANILKUMAR CHAHWALL A, THE AO DID NOT MAKE ANY QUERY ON HIS OWN NOR BROUGHT ON RECORD ANY MATERIALS/REASONS FOR ASSESSING THE SAID AMOUNT AS ASSESSEES INCOME. IT WAS FURTHER SUBMITTED THAT THE MATERIAL PLACED BEFORE THE AO VI DE LETTER DATED 18.12.2009 WAS NOT CONSIDERED AT ALL AND THAT THE A SSESSMENT MADE U/S 143(3) OF THE ACT IN THE NAME OF MR. ANILKUMAR CHAH WALLA WAS CONTESTED IN APPEAL BEFORE CIT(A), VALSAD, WHEREIN THE TRANSA CTIONS OF MR. ANILKUMAR CHAHWALLA WITH THE ASSESSEE WERE HELD TO BE GENUINE AND - 4 - ADDITION MADE THEREIN WAS DELETED. THE ASSESSEE FUR NISHED THE COPY OF THE ASSESSMENT ORDER AND CIT(A)S ORDER IN THE CASE OF MR. ANILKUMAR CHAHWALLA, BEFORE THE LD. CIT(A). 6. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT FROM THE BODY OF THE ASSESSMENT IT IS VERY MUCH EVIDENT THAT THE AO HAS NOT ADDUCED ANY REASONS OF HIS OWN FOR ASSESSING THE DISPUTED AMOUNTS AS ASSESSEES INCOME EXCEPT REPROD UCING THE EXTRACT OF INTIMATION RECEIVED FROM DCIT, NAVSARI AND THAT THE HUGE ADDITIONS WERE MADE IN A CASUAL MANNER WITHOUT ANY ENQUIRY OR DISC USSION IN THE ASSESSMENT ORDER. HE FURTHER OBSERVED THAT THE ASSE SSEE BROUGHT TO THE KNOWLEDGE OF AO THAT MR. ANILKUMAR CHAHWALLA, WHOSE STATEMENT WAS SUPPOSED TO BE THE BASIS OF REOPENING OF THE ASSESS MENT U/S 147 OF THE ACT, RETRACTED FROM THE STATEMENT GIVEN BY HIM BEFO RE THE DCIT, NAVSARI. HE ALSO POINTED OUT THAT THE ASSESSEE FILED COPIES OF AFFIDAVITS DATED 27.12.2008 AND 15.12.2009 OF MR. ANILKUMAR CHAHWALL A, GIVING DETAILS OF SUCH RETRACTION. HE FURTHER POINTED OUT THAT THE A O HAD NOT CONSIDERED AT ALL THE MATERIALS PLACED BEFORE HIM AND THERE WAS N O WHISPER ABOUT THEM EXCEPT STATING THAT SUBMISSIONS MADE BY APPELLANT W ERE CONSIDERED AND NOT ACCEPTABLE. SO THERE WAS NO APPLICATION OF MIN D ON THE PART OF THE AO IN COMPLETION OF ASSESSMENT. EVEN THE COGNIZANCE OF THE AFFIDAVITS OF MR. ANILKUMAR CHAHWALLA HAD NOT BEEN TAKEN AND NO O PPORTUNITY WAS AFFORDED TO THE ASSESSEE TO EXAMINE/CROSS EXAMINE M R. ANILKUMAR CHAHWALLA TO CROSS VERIFY THE RECORDS. THE LD.CIT(A ) OBSERVED THAT AS REGARDS THE PURCHASES FROM M/S PADMAVATI GEMS, PROP RIETORY CONCERN OF MR. ANILKUMAR CHAHWALLA, THE ASSESSEE FILED CONFIRM ATIONS FROM THE PROPRIETOR AND FURNISHED COPIES OF PURCHASE INVOIC ES BEFORE THE AO MENTIONING REQUISITE DETAILS LIKE, NAME OF THE ITE M, QUANTITY, RATE AND THE TOTAL AMOUNT BESIDES THE NAME AND ADDRESS AND THE F ACT THAT THE GOODS - 5 - SOLD AND DELIVERED AT NAVSARI, WAS DULY MENTIONED T HEREIN. HE FURTHER OBSERVED THAT THE PAYMENTS TO THE ABOVE PARTIES WE RE ALSO DULY MADE BY CHEQUES AND THE COPIES OF THE BANK STATEMENTS OF TH E ASSESSEE HIGHLIGHTING THE ABOVE PAYMENTS WERE PRODUCED BEFOR E THE AO AND THAT THE SAID PARTY WAS NOT RELATED TO THE ASSESSEE WITH IN THE MEANING OF SECTION 40A(2)(B) OF THE ACT. THE LD. CIT(A) POINT ED OUT THAT AS PER THE MATERIALS PLACED BEFORE THE AO, THE PURCHASES WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND THE QUANTITY OF PURCHASE WAS INCLUDED IN THE STOCKS, OUT OF WHICH EXPORT SALES W ERE AFFECTED. THE LD. CIT(A) ALSO POINTED OUT THAT IT WAS EVIDENT FROM TH E COPIES OF SOME OF THE PURCHASE INVOICES, THAT THE PACKING CREDIT FACILITI ES HAD BEEN GRANTED BY BANK OF INDIA, OPERA HOUSE BRANCH ON THE ABOVE PURC HASES AS PER ENDORSEMENT THEREIN. 7. THE LD. CIT(A) OBSERVED THAT THE TRANSACTIONS C ONDUCTED BY THE ASSESSEE WITH M/S PADMAVATI GEMS AND M/S PARTH COR PORATION WERE CARRIED OUT DURING THE NORMAL COURSE OF THE ASSESSE ES BUSINESS. HE ALSO POINTED OUT THAT IN THE CASE OF SHRI ANILKUMAR CHAH WALLA, CIT(A) HAD TAKEN NOTE OF THE FACT THAT ASSESSMENT IN THE SAID CASE W AS MADE ON THE STATEMENT RECORDED FROM THE SAID ASSESSEE ON 24.12 .2008, THE SAID STATEMENT WAS OBTAINED BY THREATENING THE ASSESSEE OF POLICE ACTION AND UNDER COERCIVE PRESSURE. IT WAS FURTHER POINTED OUT THAT CIT(A) VALSAD, VIDE ORDER DATED 27.2.2010 HAD ALSO NOTED THE FACT THAT THE STATEMENT GIVEN BY MR. ANILKUMAR CHAHWALLA ON 24.8.2012 WAS R ETRACTED IMMEDIATELY BY WAY OF AN AFFIDAVIT DATED 27.12.2008 AND, THEREFORE, THE STATEMENT RECORDED BY THE AO DURING THE ASSESSMENT PROCEEDINGS ALONE CANNOT FORM THE BASIS OF ADDITIONS MADE BY THE AO. THE LD. CIT(A) EXTRACTED THE FINDING OF LD. CIT(A) VALSAD, GIVEN I N PARA 10 AND 10.1 HIS ORDER PASSED IN THE CASE OF MR. ANIL KUMAR CHAHWALL A IN PARA 5.1 IN THE - 6 - IMPUGNED ORDER. FOR THE SAKE OF REPETITION THE SAME IS NOT REPRODUCED HEREIN. THE LD. CIT(A) ACCORDINGLY HELD THAT THE TR ANSACTIONS BETWEEN THE ASSESSEE AND MR. ANILKUMAR CHAHWALLA, PROPRIETOR OF M/S PADMAVATI GEMS WERE GENUINE AND THERE WAS NO REASON TO CONSID ER THE SAID TRANSACTIONS AS BOGUS AND ACCOMMODATIVE IN NATURE. 8. AS REGARDS THE LABOUR CHARGES PAID TO M/S PART H CORPORATION, THE LD. CIT(A) OBSERVED THAT PAYMENTS WERE MADE DULY BY CHEQUES COPIES OF THE BANK STATEMENT HIGHLIGHTING THE SAID PAYMENTS W ERE ALSO PRODUCED BEFORE THE AO AND A CERTIFICATE DATED 15.07.2005 IS SUED BY ITO WARD -1, NAVSARI, ADDRESSED TO THE ASSESSEE PERMITTING THE D EDUCTION OF TDS AT A LOWER RATE TILL 31.3.2006 UNDER SECTION 197 OF THE IT ACT ON LABOUR CHARGES PAID BY THE ASSESSEE TO M/S PARTH CORPORATION, INDI CATED THAT M/S PARTH CORPORATION, PROPRIETOR CONCERN OF MR. ANILKUMAR C HAHWALLA WAS A BONAFIDE AND GENUINE TAX PAYER VIS--VIS HIS TRANS ACTIONS AND ACTIVITIES AS LABOUR JOB WOKER. THE LD. CIT(A) FURTHER OBSERVED T HAT THE ASSESSEE DEDUCTED TDS ON PAYMENTS MADE TO THE SAID PARTY FRO M TIME TO TIME AND PAID THE SAME TO THE GOVERNMENT ACCOUNT AND ISSUED FORM NO. 16A. THE LD. CIT(A) ALSO OBSERVED THAT QUANTITATIVE EFFECT O F THE LABOUR BILLS WAS ALSO REFLECTED ILN THE STOCK REGISTER. THEREFORE, THE EXPENDITURE OF LABOUR CHARGES COUPLED WITH OUTWARD DELIVERY OF ROUGH DIAM ONDS AND INWARD DELIVERY OF POLISHED DIAMONDS AND THE CONSEQUENT EX PORTS WILL GO TO SHOW THAT THE LABOUR PAYMENTS WERE DONE IN ORDINARY COUR SE OF THE ASSESSEES BUSINESS. HE, THEREFORE, HELD THAT THERE WAS NO GRO UND TO CONSIDER THE LABOUR PAYMENTS MADE BY ASSESSEE TO M/S PARTH CORPO RATION, PROPRIETARY CONCERN OF MR. ANILKUMAR CHAHWALLA AS BOGUS. ACCORD INGLY THE ADDITION MADE BY THE AO WERE DELETED. AGGRIEVED BY THE DECIS ION OF CIT(A) THE DEPARTMENT IS IN APPEAL BEFORE TRIBUNAL. - 7 - 9. LD. DR STRONGLY SUPPORTED THE ORDER OF AO AND RE ITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER DATED 21. 12.2009. IT WAS SUBMITTED THAT LD. CIT(A) WITHOUT PROVIDING ANY OPP ORTUNITY OF BEING HEARD TO THE AO, ADMITTED THE ADDITIONAL EVIDENCE W HICH IS THE VIOLATION OF THE PROVISIONS CONTAINED IN RULE 46A OF THE INCO ME TAX RULES. IT WAS FURTHER STATED THAT THE LD. CIT(A) WITHOUT APPRECIA TING THE FACTS IN RIGHT PERSPECTIVE DELETED THE ADDITION MADE BY AO. 10. IN HIS RIVAL SUBMISSIONS, LD. COUNSEL FOR THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND F URTHER SUBMITTED THAT THE BOOK RESULTS WERE ACCEPTED BY THE AO. HOWE VER THE PURCHASE AND LABOUR CHARGES WERE NOT ACCEPTED. IT WAS FURTHE R STATED THAT ADDITION WAS MADE ONLY ON THE BASIS OF STATEMENT RECORDED U/ S 131 OF THE ACT ON 24.12.2008 OF MR. ANILKUMAR CHAHWALLA, WHO LATER ON VIDE AFFIDAVIT DATED 27.12.2008 RETRACTED THE STATEMENT. IT WAS FURTHER STATED THAT THE AO HAD NOT INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT AND ALSO ACCEPTED ALL THE TRADING RESULTS I.E. OPENING/CLOSING STOCK, EXPORT SALES, GROSS PROFIT ETC. THEREFORE, THERE WAS NO OCCASION TO CONSIDER THE PURCHASES ONLY AS BOGUS. AS REGARDS THE LABOUR CHARGES IT WAS STATED THAT THOSE WERE REFLECTED IN THE STOCK REGISTER OF POLISHED DIAMOND S AND THE AO ISSUED CERTIFICATE U/S 197 OF THE ACT PERMITTING DEDUCTION OF TDS AT A LOWER RATE, THEREFORE, THE ADDITION MADE BY AO WAS RIGHTLY DELE TED. AS REGARDS THE ADMISSION OF ADDITIONAL EVIDENCE, THE LD. COUNSEL F OR THE ASSESSEE SUBMITTED THAT IF THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE BEFORE THE APPELLATE AUTHORITIES IS IN THE NATURE OF CLINC HING EVIDENCE LEAVING NO FURTHER ROOM FOR ANY DOUBT OR CONTROVERSY, NO USEF UL PURPOSE WOULD BE SERVED IN PERFORMING THE RITUAL OR FORWARDING THE E VIDENCE OR MATERIAL TO AO AND OBTAINING HIS REPORT. RELIANCE WAS PLACED ON THE DECISION OF ITATS - 8 - MUMBAI BENCH OF TRIBUNAL IN THE CASE OF ITO VS. IND USTRIAL ROADWAYS [2008] 305 ITR 219 (MUMBAI). 11. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE CAREFULLY GONE THROUGH THE MATERIAL ON RECORD. IN T HIS INSTANT CASE IT IS AN ADMITTED FACT THAT THE AO DID NOT INVOKED THE PROVI SIONS OF SECTION 145(3) OF THE ACT. HE HAS ALSO ACCEPTED THE OPENING STOCK, CLOSING STOCK, SALES AND GROSS PROFIT SHOWN BY THE ASSESSEE AND IF ALL O THER CONSTITUENTS OF TRADING ACCOUNT WERE ACCEPTED THEN THERE WAS NO OCC ASION TO DOUBT THE PURCHASES. MOREOVER, THE ADDITION WAS MADE BY THE A O MERELY ON THE BASIS OF STATEMENT OF MR. ANILKUMAR CHAHWALLA WHO I S A PROPRIETOR OF M/S PADMAVATI GEMS FROM WHOM THE ASSESSEE PURCHASED THE GOODS AND M/S PARTH CORPORATION TO WHOM THE ASSESSEE MADE THE LAB OUR PAYMENTS. THE ASSESSMENT FRAMED IN THE CASE OF SAID PERSON MR. AN ILKUMAR CHAHWALLA WAS A SUBJECT MATTER OF APPEAL BEFORE THE LD. CIT(A ), VALSAD, VIDE ORDER DATED 27.12.2008, ACCEPTED THE CONTENTION OF THE SA ID ASSESSEE, MR. ANILKUMAR CHAHWALLA. THAT STATEMENT ON 24.12.2008 O BTAINED BY THREATENING THE ASSESSEE OF POLICE ACTION AND UNDER COERCIVE PRESSURE AND THE SAID STATEMENT WAS NOT GIVEN BY FREE WILL. THER EFORE, IT WAS RETRACTED IMMEDIATELY BY WAY OF AN AFFIDAVIT DATED 27.12.2008 . IT IS WELL SETTLED PROPOSITION THAT ANY STATEMENT OBTAINED BY COERCIVE MEASURES OR UNDER ANY PRESSURE CANNOT BE ADMITTED AS AN EVIDENCE BECA USE IT IS NOT BY FREE WILL. THEREFORE, THE ADDITION MADE BY THE AO ON THE BASIS OF STATEMENT OF MR. ANILKUMAR CHAHWALLA WHICH WAS RETRACTED LATER O N WAS NOT JUSTIFIED. MOREOVER THE CIT(A) VALSAD, WHILE DECIDING THE APPE AL OF MR. ANILKUMAR CHAHWALLA CONSIDERED THE TRANSACTIONS BETWEEN THE A SSESSEE AND MR. ANILKUMAR CHAHWALLA, PROPRIETOR OF M/S PADMAVATI GE MS AND M/S PARTH CORPORATION AS GENUINE. THEREFORE, THE AO IS NOT J USTIFIED IN TAKING A - 9 - DIVERGENT VIEW. SIMILARLY FOR THE LABOUR CHARGES PA ID TO M/S PARTH CORPORATION, THE ASSESSEE FURNISHED BEFORE THE AO, COPY OF CERTIFICATE DATED 15.07.2005 ISSUE BY ITO WARD-1, NAVSARI, ADDR ESSED TO ASSESSEE, PERMITTING DEDUCTION OF TDS AT A LOWER RATE U/S 197 OF THE IT ACT ON THE LABOUR CHARGES PAID BY THE ASSESSEE TO M/S PARTH CO RPORATION. THEREFORE, THE TRANSACTIONS RELATING TO THE LABOUR CHARGES BET WEEN THE ASSESSEE AND MR. ANIL KUMAR CHAHWALLA, PROPRIETOR OF M/S PARTH C ORPORATION, CANNOT BE DOUBTED PARTICULARLY WHEN THE QUANTITATIVE EFFE CT OF THE LABOUR BILLS WAS ALSO REFLECTED IN THE STOCK REGISTER. WE, THERE FORE, CONSIDERING THE TOTALITY OF THE CASE AS DISCUSSED HEREIN ABOVE ARE OF THE VIEW THAT LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE IMPUGNED ADDITIONS MADE BY AO. ACCORDINGLY WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE DEPARTMENT AND THE SAME IS DISMISSED. 12. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISM ISSED. ORDER PRONOUNCED ON 07/02/2014 SD/- SD/- (SANJAY GARG) (N.K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED 03 /02/2014 SKS SR. P.S COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI