Sh. Mool Raj Sharma, Rajouri. V. The Income Tax Officer, Jammu

ITA 96/ASR/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3751 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 17-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Bogus purchase; Principle of natural justice
• Section: 40A(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S.KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NO.96(ASR)/2014 ASSESSMENT YEARS: 2007-08 SH. MOOL RAJ SHARMA, S/O LT. SH. AMAR NATH SHARMA, VILL:-SEERI TEHSIL NOWSHERA, DIST:-RAJOURI, J&K. PAN: ACDPS4908B VS. THE CIT, WARD-3 JAMMU & KASHMIR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N.ARORA (ADV.) RESPONDENT BY: SH. TARSEM LAL (DR.) DATE OF HEARING: 09.11.2015 DATE OF PRONOUNCEM ENT: 23.12.2015 ORDER PER T.S.KAPOOR (A.M): THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT(A), JAMMU, DATED 10.12.2013 FOR ASST. YEAR 2007 -08. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROU NDS OF APPEAL (I) THAT THE LD, COMMISSIONER HAS ERRED IN LA W AND FACTS OF THE CASE IN CONFIRMING THE ADDITIONS TO THE RETURNED INCOME. (II) THE LD, COMMISSIONER HAS ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITIONS OF RS.6,47,460.00 ON ACCOU NT OF WORK IN PROGRESS. (III) THAT AS HAS ALREADY BEEN PRAYED THAT DURING THE COU RSE OF SCRUTINY ASSESSMENT FOR THE PERIOD UNDER DISPUTE, THE LD A.O . HAS ASKED TO FILE MONTH WISE COMPUTATION OF WORK IN PROGRESS AND THER E ARISES TOTALING MISTAKE IN THE COMPUTATION SHEET OF WORK IN PROGRES S SUBMITTED AT THE 2. ITA NO.96 (ASR)/2014 ASST. YEAR 200 7-08 TIME OF ASSESSMENT AND IS ALSO CONFIRMED IN THE REMAND REPORT THAT THE CLOSING WIP AS ON 31.03.2007 ARRIVED AT RS.4,95 ,100.00 INSTEAD OF RS.11,42,569.00 AND THE ADDITION MADE ON ACCOUNT OF WIP AMOUNTING RS.647460.00 (11,42,569-4,95,100) IS NOT SUSTAINABL E AND IS PRAYED MAY DROP THE SAID ADDITION AS THE SAID TOTALING MIS TAKE IN THE W.I.P. SHEET IS HUMAN ERROR AND IS PRAYED MAY DROP THE SAM E AND FOR THIS ACT OF KINDNESS WE SHALL EVER PRAY. (IV) THAT REGARDING ADDITION OF RS.6,36,100.00 U\S 40A( 3) OF THE IT ACT 1961,IT IS PRAYED THAT THE PETITIONER IS A CONTRACT OR AND DURING THE EMERGENCY (DURING CONSTRUCTION OF BIG SLAB) OF THE WORK AT THE SITE HAS MADE SOME CASH PAYMENTS AGAINST PURCHASES OF MATERI AL REQUIRED AT THE SITE AND HAS MADE CASH PAYMENT TO THE TUNE OF R S.2,01,000.00 ON HOLIDAYS AND AS PER RULE 6DD PAYMENTS MADE ON BANK HOLIDAY OR STRIKE MAY NOT BE DISALLOWED AND IS PRAYED THAT THE ADDITIONS OF SAID CASH PAYMENTS OF RS.2,01,000.00 IS INJUSTICE O F THE LD, A.O. AND IS PRAYED MAY ALLOW THE SAID PAYMENTS AS GENUINE SO THAT THE PETITIONER MAY HAVE NATURAL JUSTICE. (V) THAT REGARDING NON DEDUCTION OF TDS BY THE PETITI ONER ON THE PAYMENTS OF RS.4,95,000.00 TO LABORERS ,IT IS PRAYE D THAT MOST OF THE LABORERS ARE NOT HAVING PAN AND IS NOT POSSIBLE TO DEDUCT AND DEPOSIT THE TDS IN THEIR FAVOUR AND IS PRAYED MAY CONDONE T HE SAID LAPSE AND FOR THIS ACT OF KINDNESS WE SHALL EVER PRAY. (VI) THAT REGARDING ADDITIONS OF RS.13754.00 ON A\C OF M ISC EXPENSES IT HAS ALREADY BEEN PRAYED THAT IT IS NOT POSSIBLE TO COLLECT EACH AND EVERY EXPENSES VOUCHER AND IS PRAYED MAY CONDONE TH E SAID LAPSE AND MAY DROP THE SAID ADDITION AND FOR THIS ACT OF KIND NESS WE SHALL EVER PRAY. (VII) THAT THE LD,A.O. HAS ERRED IN LAW & FACTS OF THE CA SE IN LEVYING INTEREST U\S 234 AND U\S 224 A OF THE INCOME TAX ACT AND IS NOT SUSTAINABLE. (VIII) ASSESSEE CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL. 3. EARLIER THE APPEAL OF THE ASSESSEE WAS DISMISSED AS BEING DEFECTIVE VIDE ORDER DATED 23.04.2014, HOWEVER THE SAID ORDER WAS RECALLED VIDE TRIBUNAL ORDER DATED 06.02.2015 AND MATTER WAS LISTED FOR HE ARING ON MERITS. 4. THE BRIEF FACTS AS NOTED IN THE ASSESSMENT ORDER ARE THAT THAT ASSESSEE IS A CIVIL CONTRACTOR AND HE FILED HIS RETURN OF INCOME DECLAR ING TOTAL INCOME AT RS.4,44,680/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT TH E ASSESSEE HAD NOT DISCLOSED TRUE WORKING PROGRESS IN THE BOOKS OF ACCOUNT WHICH ACCO RDING TO HIM ON THE BASIS OF BOOKS OF ACCOUNT WORKED OUT OF RS.11,42,569/- WHER EAS THE ASSESSEE HAD DECLARED 3. ITA NO.96 (ASR)/2014 ASST. YEAR 200 7-08 THE WIP AT RS.4,95,100/- ONLY. THEREFORE, THE ASSES SEE WAS SHOW CAUSED AS TO WHY THE PROFITS OF THE ASSESSEE BE NOT INCREASED ON ACCOUNT OF UNDER VALUATION OF WIP. IN RESPONSE THE COUNSEL OF THE ASSESSEE SUBMITTED THAT IN NORMAL COURSE THE CONTRACTORS ARE NOT AWARE OF THE PROCEDURE OF VALUATION OF WIP AND ARE ALSO NOT WELL EQUIPPED WITH ACCOUNTINGS PROCEDURE. THE ASSESSING OFFICER WAS NO T CONVINCED WITH THE REPLY OF ASSESSEE, THEREFORE, HE MADE AN ADDITION OF RS.6,47 ,460/- ON ACCOUNT OF UNDER VALUATION OF WIP. THE ASSESSING OFFICER FURTHER OBS ERVED THAT DURING THE YEAR THE ASSESSEE HAD MADE PAYMENTS IN VIOLATION OF PROVISIO NS OF SECTION 40A(3), AND THEREFORE, THE ASSESSEE WAS SHOW CAUSED AS TO WHY 2 0% OF THE ABOVE PAYMENTS BE NOT DISALLOWED. THE COUNSEL OF THE ASSESSEE FAILED TO F URNISH ANY EXPLANATION AND THEREFORE, THE ASSESSING OFFICER MADE ADDITION ON R S.12,72,20/- FOR VIOLATION OF PROVISION OF SECTION 40A(3). THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE HAD MADE CERTAIN PAYMENTS WHICH REQUIRED DEDUCTION OF TAX U/S 194C AND THE TOTAL OF SUCH PAYMENTS WERE RS.4,95,000/-. THEREFORE, ASSESS EE WAS SHOW CAUSED AS TO WHY THE AMOUNT OF EXPENSES BE NOT DISALLOWED UNDER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. IN RESPONSE THE COUNSEL OF THE ASSESSEE ST ATED THAT CONTRACTOR ASSESSEE WAS NOT AWARE OF THE LEGAL PROVISIONS AS SUCH HAD OMITT ED TO MAKE DEDUCTION OF TAX AT SOURCE. THE ASSESSING OFFICER HELD THAT IGNORANCE O F LAW WAS NOT AN EXCUSE AND THEREFORE, HE MADE AN ADDITION OF RS.4,95,000/- U/S 40(A)(IA) OF THE ACT. THE ASSESSING OFFICER FURTHER OBSERVED THAT ON THAT DATED 3.1.200 6 AND 15.1.2006 THE ASSESSEE HAD RECORDED MISCELLANEOUS PURCHASES AMOUNTING TO RS.1, 23,149/- AND RS.2,53,145 RESPECTIVELY AND THE ASSESSEE WAS ASKED TO PRODUCE NECESSARY DOCUMENTARY EVIDENCE/ BILLS IN SUPPORT OF PURCHASES DEBITED ON SAID DATES . THE ASSESSEE FAILED TO PRODUCE NECESSARY PURCHASE BILLS AND EVEN FAILED TO GIVE DE TAILS OF ITEM/GOODS PURCHASES AND THEREFORE, ASSESSING OFFICER MADE DISALLOWANCE OF R S.3,76,303/-BEING UNVOUCHED AND 4. ITA NO.96 (ASR)/2014 ASST. YEAR 200 7-08 UNEXPLAINED PURCHASES. THE ASSESSING OFFICER FURTHE R MADE AN ADDITION OF RS.13,754/- ON ACCOUNT OF EXPENDITURE BOOKED UNDER THE HEADING TA AND CONVEYANCE ON ACCOUNT OF NON PRODUCTION OF VOUCHERS. 5. AGGRIEVED WITH THE ADDITIONS THE ASSESSEE FILED APPEAL BEFORE CIT(A) AND THE LEANED CIT(A) OBTAINED REMAND REPORT OF THE ASSESSE E AND AFTER OBTAINING REMAND REPORT PARTLY ALLOWED THE RELIEF BY HOLDING AS UNDE R: 6.2 GROUND OF APPEAL NO 2.1 & 2.2 RELATES TO ADDIT ION OF RS 6,47,460/- ON ACCOUNT OF DIFFERENCE IN VALUATION OF WORK IN PROGR ESS. THE AO WHILE SCRUTINIZING THE BOOKS OF ACCOUNTS AND RECORDS DURI NG THE COURSE OF ASSESSMENT FOUND THAT THE VALUE OF CLOSING WORK IN PROGRESS NOT DECLARED CORRECTLY. THE APPELLANT FURNISHED A RECASTED CHART OF WORK IN PROGRESS WHICH REFLECTED THE VALUE OF CLOSING STOCK AT RS.11 ,42,569/- INSTEAD OF RS 4,95,100/- DECLARED IN PROFIT AND LOSS ACCOUNT. THE APPELLANT SUBMITTED DURING THE COURSE OF ASSESSMENT THAT THE VALUE OF W ORK IN PROGRESS DECLARED IN FINANCIAL STATEMENTS WAS UNDERVALUED AS THE APPELLANT WAS NOT AWARE OF THE ACCOUNTING PROCEDURES AND THE MIST AKE IS DUE TO THE IGNORANCE OF PROCEDURE OF VALUATION OF STOCKS/WIP. ACCORDINGLY, AN ADDITION OF RS 5,47,460/- WAS MADE TO THE INCOME OF THE APPELLANT BEING DIFFERENCE IN VALUATION OF STOCK. DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPELLANT HAD SUBMITTED THAT THERE IS NO UNDERV ALUATION OF WORK IN PROGRESS AND PROGRESS. THE SUBMISSION OF THE APPELLANT ALONG WITH THE REVISED CHART WAS REMANDED TO THE AO FOR VERIFICATI ON. THE AO IN HIS REMAND REPORT HAS REPORTED THAT THE GROSS PROFIT SH OWN IN THE REVISED CHART IS RS. 18,21,332/- WHEREAS THE CHART PRODUCED BEFOR E THE AO WAS SHOWING A GROSS PROFIT OF RS13,26,232/- IT IS OBSER VED THAT THE NET PROFIT SHOWN BY BOTH THE CHARTS IS SAME. IT IS NOT ACCEPTA BLE THAT IF THE FIGURE OF GROSS PROFIT AND INDIRECT EXPENSES REMAINS THE SAME , THE NET PROFIT CANNOT REMAIN THE SAME. THE APPELLANT HAS PRODUCED A CHART IN WHICH THE FIGURES OF GROSS PROFIT AND OTHER FIGURES HAS BEEN ADJUSTED TO MATCH THE FIGURE OF CLOSING WORK IN PROGRESS. THIS PLEA OF THE APPELLAN T COULD NOT BE SUSTAINED AND ACCORDINGLY THIS APPEAL OF THE APPELLANT IS DIS MISSED. 5. ITA NO.96 (ASR)/2014 ASST. YEAR 200 7-08 6.3 GROUND OF APPEAL NO 3.1,3.2 & 3.3 RELATES TO ADDIT ION OF RS 1,27,200/- U/S 40A(3) OF THE ACT. THE AO FOUND DURI NG THE COURSE OF ASSESSMENT THAT CASH PAYMENTS OF RS 6,36,100/- ON D IFFERENT DATES ARE MADE IN VIOLATION OF PROVISIONS OF SECTION 40A(3) O F THE ACT AND ACCORDINGLY 20% OF EXPENDITURE WAS DISALLOWED. THE APPELLANT HA S ARGUED THAT THE PAYMENTS WERE MADE DUE TO URGENCY AND THERE WAS BAN K HOLIDAY OR STRIKE ON THOSE DATES AND AS PER RULE 6DD THESE MAY NOT BE DISALLOWED. IT IS OBSERVED THAT THE PAYMENTS ARE MADE ON DIFFERENT DA TES IN VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT. THE APPELL ANT HAS NOT PRODUCED ANY EVIDENCE IN SUPPORT HIS CLAIM THAT THERE WAS URGENC Y FOR SUCH PAYMENT AND ALL THE PAYMENTS WERE REQUIRED TO BE MADE EITHE R ON SUNDAYS OR ON PUBLIC HOLIDAYS. THERE WAS NOTHING ON RECORD TO SHO W WHY THE PAYMENTS COULD NOT HAVE BEEN MADE BY ACCOUNT TO INVOKE THE E XCEPTION OF RULE 6DD, IT IFTO BE ESTABLISHED THAT THE PAYMENTS WERE REQUI RED TO BE MADE ON THE DAY OF HOLIDAY AND COULD NOT HAVE BEEN MADE ON THE SUBSEQUENT DAY AND THAT THE PAYMENT COULD NOT HAVE BEEN MADE BY CHEQUE . THE PLEA OF THE APPELLANT CANNOT BE ACCEPTED ON MERE STATEMENT OF T HE APPELLANT WITHOUT ANY EVIDENCE ON RECORD. THE APPELLANT HAS ALSO ARGU ED THAT SOME OF THE PARTIES DOES NOT MAINTAIN BANK ACCOUNT. THERE IS NO SUCH EXCEPTION IN RULE 6DD UNLESS THE PAYMENTS ARE MADE TO A PERSON WHO RE SIDES IN AN AREA WHICH IS NOT SERVED BY THE BANK AND THIS WAS NOT ES TABLISHED BY THE APPELLANT. THIS GROUND OF APPEAL IS THUS DISMISSED. 6.4 GROUND OF APPEAL NO 4.1 & 4.2 RELATES TO ADDITION OF RS 4,95,000/- U/S 40(A)(IA) OF THE ACT. THE APPELLANT HAS MADE PA YMENTS FOR LABOUR & WAGES WITHOUT DEDUCTION OF TAX AND ACCORDINGLY ADDI TION U/S 40(A)(IA) OF THE ACT WAS MADE. THE APPELLANT HAS ARGUED THAT THE PAYMENTS WERE MADE IN URGENCY WITHOUT DEDUCTING TDS. THE APPELLAN T HAS ALSO ARGUED THAT MOST OF THE PAYEES DO NOT POSSESS PAN AND ACCO RDINGLY TDS WAS NOT DEDUCTED. BOTH THESE PLEA OF THE APPELLANT COULD NO T BE SUSTAINED AS URGENCY OF PAYMENT OR NON AVAILABILITY OF PAN COULD NOT BE TAKEN AS 6. ITA NO.96 (ASR)/2014 ASST. YEAR 200 7-08 EXCUSE FOR NON DEDUCTION OF TDS UNDER THE PROVISION S OF THE ACT. THEREFORE, THIS GROUND OF APPEAL IS DISMISSED. 6.5 GROUND OF APPEAL NO 5.1 & 5.2 RELATES TO ADDITION OF RS 3,76,303/- ON ACCOUNT OF BOGUS PURCHASES. THE APPELLANT HAS AR GUED THAT THE BILLS OF PURCHASES WERE SUBMITTED WITH THE DDO FOR VERIFICAT ION AND ACCORDINGLY COULD NOT BE PRODUCED AT THE TIME OF ASSESSMENT. TH E APPLICANT HAS PRODUCED THE BILLS FOR MISCELLANEOUS PURCHASES AND THE SAME WERE VERIFIED BY THE AO IN REMAND PROCEEDINGS AND FOUND TO BE GEN UINE. THIS GROUND OF APPEAL OF THE APPELLANT IS ALLOWED AND A RELIEF OF RS 3,76,303/- IS ALLOWED. 6.6 GROUND OF APPEAL NO.6.1 & 6.2 RELATES TO ADDITION O F 20% OF TRAVELING &CONVEYANCE EXPENSES AMOUNTING TO RS.13,7 54/- ON ACCOUNT OF UNVOUCHED EXPENSES. THE APPELLANT HAS NOT PRODUCED VOUCHERS OF EXPENSES AND ACCORDINGLY ADHOC ADDITION OF 20% IS M ADE. THE APPELLANT SUBMITTED BEFORE ME THAT IT NOT POSSIBLE TO PRODUCE ALL THE VOUCHERS. IN MY OPINION, THE ACTION OF AO OF MAKING ADHOC DISALLOWA NCE OF 20% OF EXPENSES IS JUSTIFIED AND IS THEREFORE, CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 6. AGGRIEVED WITH THE ORDER OF LEARNED CIT(A), THE ASSESSEE IS BEFORE US. 7. AT THE OUTSET, ARGUING GROUND NO. I TO III, THE LEARNED AR INVITED OUR ATTENTION TO PROFIT AND LOSS ACCOUNT PLACED AT PAPER BOOK PAGE 1 AND SUBMITTED THAT IN THE PROFIT AND LOSS ACCOUNT THE FIGURE OF WORK IN PROGRESS WAS RS.4,95,100/-. HE FURTHER TOOK US TO PAGE NO.3 OF PAPER BOOK AND SUBMITTED THAT ON TH E BASIS OF MONTH WISE CALCULATION OF WORK IN PROGRESS THE VALUE OF WORK IN PROGRESS C AME OUT TO RS.11,42,559/-. HE SUBMITTED THAT BEFORE THE CIT(A), THE ASSESSEE FILE D A FURTHER CHART WHICH IS PLACED AT PAPER BOOK PAGE 4 WHICH WAS A REVISED CHART AND IN WHICH AGAIN THE FIGURE OF CLOSING STOCK OF WIP CAME OUT AT RS.4,95,100/-. HE SUBMITT ED THAT IN THE ABOVE CHART PLACED AT PAPER BOOK PAGE 3 AND 4 THERE IS NO DIFFERENCE I N ANY OF THE FIGURE AND IT WAS ONLY 7. ITA NO.96 (ASR)/2014 ASST. YEAR 200 7-08 DUE TO A MISTAKE IN TOTALING WHICH WAS RECTIFIED BE FORE THE LEARNED CIT(A) AND MOREOVER THE ASSESSING OFFICER IN HIS REMAND REPORT HAS ADMITTED THAT THERE WAS NO DIFFERENCE IN THE FIGURE OF WIP. IN THIS RESPECT HE TOOK US TO THE COPY OF THE REMAND REPORT PLACED AT PAPER BOOK PAGE 13 & 14. ARGUING U PON THE GROUND NO. IV, THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAD MADE PAY MENTS IN CASH TO WORKERS WHO DID NOT HAVE BANK ACCOUNT. HE FURTHER SUBMITTED THA T PAYMENTS WERE MADE ON ACCOUNT OF EXECUTION OF WORK AT RAJAURI AND IN THE INTEREST OF BUSINESS THE ASSESSEE HAD TO MAKE PAYMENTS IN CASH. ALTERNATIVELY, HE SUB MITTED THAT OUT OF THE TOTAL PAYMENTS OF 6,47,460/- PAYMENTS AMOUNT TO RS.2,10,0 00/- WERE MADE ON BANK HOLIDAYS FOR WHICH ADDITION SHOULD NOT HAVE BEEN MA DE AS PER CLAUSE-J OF RULE 6DD. 8. AS REGARDS GROUND NO. V REGARDING NON DEDUCTION OF TDS THE LEARNED AR SUBMITTED THAT LABOURERS WERE NOT HAVING PAN NOS. A ND THOSE PERSONS TO HIM PAYMENTS WERE MADE DO NOT FILE INCOME TAX RETURN AN D THEREFORE, IT WAS NOT POSSIBLE TO DEDUCT TDS AT SOURCES AND MOREOVER SINCE THEY WERE NOT HAVING PAN CREDIT OF TDS WAS NOT POSSIBLE. THE LEARNED AR FURTHER SUBMITTED THAT NOTHING WAS DUE AND ALL THE PAYMENTS WERE ALREADY MADE BEFORE THE END OF FINANC IAL YEAR AND RELYING UPON THE CASE LAW OF SPECIAL BENCH IN THE CASE OF MERILYN S HIPPING & TRANSPORTS VS. ACIT 146 TTJ 001 (SB), THE LEARNED AR SUBMITTED THAT THE TAX WAS NOT DEDUCTIBLE. 9. ARGUING GROUND NO. VI, THE LEARNED AR SUBMITTED THAT SINCE THE ASSESSING OFFICER HAD NOT POINTED OUT ANY INADMISSIBLE ITEMS, THEREFORE, THE ADDITION WAS NOT WARRANTED. 10. THE LEARNED DR, ON THE OTHER HAND, REPLYING TO THE ARGUMENTS OF THE LEARNED AR IN RESPECT OF GROUND NO. I TO III SUBMITTED THAT THE DIFFERENCE AMOUNTING TO 8. ITA NO.96 (ASR)/2014 ASST. YEAR 200 7-08 RS.6,47,416/- IN WIP CANNOT BE TERMED AS A TOTALING MISTAKE. HE INVITED OUR ATTENTION TO CHART SUBMITTED BEFORE LEANED CIT(A) PLACED AT P APER BOOK PAGE 4, AND SUBMITTED THAT ASSESSEE HAD ARRIVED AT THE FIGURE OF WORK IN PROGRESS AT RS.4,95,100/- BY INCREASING GROSS PROFIT FROM RS.13,26,232/- TO 18,2 1,332/-. HE FURTHER SUBMITTED THAT THERE WAS DIFFERENCE IN PURCHASES ALSO SO, THEREFOR E, CONTENTION OF LEARNED AR IS NOT CORRECT. REPLYING TO SECOND ADDITION THE LEARNED DR FAIRLY AGREED THAT IN RESPECT OF PAYMENTS MADE ON HOLIDAYS, THE ASSESSEE CAN BE GIVE N RELIEF FOR VIOLATION OF RULE 40A(3). AS REGARDS ADDITION ON ACCOUNT OF NON DEDUC TION OF TDS, THE LEANER DR SUBMITTED THAT ASSESSEE HAD NOT ARGUED EARLIER THAT NOTHING WAS PAYABLE AND THEREFORE, NOW ASSESSEE CAN NOT RAISE THIS ARGUMENT . 11. AS REGARDS LAST GROUND OF APPEAL, THE LEARNED D R SUBMITTED THAT ON ACCOUNT OF NON PRODUCTION OF VOUCHERS THE ASSESSING OFFICER HA D RIGHTLY MADE THE ADDITIONS AND LEARNED CIT(A) HAS RIGHTLY CONFIRMED THE SAME AND I N THIS RESPECT OUT ATTENTION WAS INVITED TO FINDINGS OF ASSESSING OFFICER AND LEARNE D CIT(A). 12. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. AS REGARDS THE FIRST ISSUE OF DIFFERENCE IN WIP AS DECLARED IN THE PROFIT AND LOSS ACCOUNT AND AS PER CHART SUBMITTED DURING THE ASSES SMENT PROCEEDINGS, WE FIND THAT THERE WAS A DIFFERENCE OF RS. 6,47,418/-BETWEEN THE TWO FIGURES. THE ASSESSEE HAD FILED A REVISED CHART BEFORE LEARNED CIT(A) IN WHIC H HE ADJUSTED THE VALUE OF CLOSING STOCK TO MATCH WITH THE FIGURE IN PROFIT AND LOSS A CCOUNT. THE WIP FIGURE AS PER CHART FILED BEFORE THE ASSESSING OFFICER PLACED AT PAPER BOOK PAGE 3 WAS OF RS.11,42,569/- WHEREAS THE VALUE OF WIP AS PER CHART FILED WITH LE ARNED CIT(A) PLACED AT PAPER BOOK PAGE 4 WAS RS.4,95,100/-. THE ASSESSEE HAS TRIED TO RECAST THE MONTHLY WIP CHART 9. ITA NO.96 (ASR)/2014 ASST. YEAR 200 7-08 WHEREIN IT HAD REDUCED THE WIP TO RS.4,95,100/- TO MATCH WITH THE FIGURE IN THE PROFIT AND LOSS ACCOUNT. THE LEARNED AR HAD ARGUED THAT TH ERE WAS ONLY A TOTALLY MISTAKE, HOWEVER, WE FIND THAT THE ASSESSEE HAD MATCHED THE FIGURE OF CLOSING WIP WITH THAT DISCLOSED IN PROFIT AND LOSS ACCOUNT BY INCREASING THE GROSS PROFIT FROM RS.13,26,232.52 TO RS.18,21,332.52 MOREOVER, WE FIN D THAT THERE IS DIFFERENCE IN THE AMOUNT OF PURCHASES ALSO IN THE TWO CHARTS. THE FIG URE OF PURCHASES AS PER CHART SUBMITTED DURING THE ASSESSMENT PROCEEDINGS COMES O UT AT RS.2,37,55,634.00 WHEREAS THE FIGURE IN THE RECASTED CHART COMES OUT AT RS.2,35,30,634/-. DESPITE THESE DIFFERENCES THE ASSESSING OFFICER IN HIS REMAND REP ORT PLACED AT PAPER BOOK PAGE 13 & 14 HAS SUBMITTED THAT THE FIGURE OF WIP SHOWN IN PR OFIT & LOSS ACCOUNT STANDS TALLIED WITH THE CLOSING WORK IN PROGRESS AS PER CHART, THE REFORE, IN VIEW OF THE ABOVE CONTRADICTIONS WE REMIT BACK THE FIRST ISSUE TO THE OFFICE OF ASSESSING OFFICER WHO ON THE BASIS OF COMPLETE VERIFICATION OF FACTS AND FIG URES WILL ARRIVE AT THE APPROPRIATE DECISION. IN VIEW OF THE GROUND NO. I TO III ARE A LLOWED FOR STATISTICAL PURPOSES. 13. AS REGARDS GROUND NO. IV, WE ARE IN AGREEMENT W ITH THE ALTERNATIVE PLEA OF LEARNED AR THAT AT LEAST THOSE PAYMENTS WHICH WERE MADE ON BANK HOLIDAYS OR OTHER HOLIDAYS SHOULD BE EXCLUDED FROM THE DISALLOWANCE U /S 40A(3) AND THEREFORE, THIS ISSUE IS ALSO REMITTED BACK TO ASSESSING OFFICER WH O WILL WORK OUT PAYMENTS MADE ON BANK HOLIDAYS AND WILL EXCLUDE THE PAYMENTS MADE ON HOLIDAYS FOR DISALLOWANCE U/S 40A(3). 14. AS REGARDS THE ISSUE OF TAX DEDUCTION AT SOURCE, LEARNED AR HAS RAISED A NEW ARGUMENT WHICH WAS NOT TAKEN BEFORE THE AUTHORITIES BELOW THAT NOTHING WAS PAYABLE AT THE CLOSE OF YEAR AND THEREFORE, AS PER THE DECI SION OF SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS VS. ACIT 146 TTJ 0001 (SB), THE ASSESSEE WAS NOT 10. ITA NO.9 6(ASR)/2014 ASST. YEAR 200 7-08 REQUIRED TO DEDUCT THE TAX. HOWEVER, THE FACTS ARE NOT BEFORE US AS TO WHETHER ANY AMOUNT WAS OUTSTANDING AS ON CLOSE OF YEAR OR NOT, THEREFORE, WE REMIT BACK THIS ISSUE ALSO TO THE OFFICE OF ASSESSING OFFICER WHO ON THE BASIS OF EXAMINATION OF OUTSTANDING PAYMENTS AS ON THE CLOSE OF YEAR WILL EXAMINE THE I SSUE OF DEDUCTION OF TAX AT SOURCE IN THE LIGHT OF DECISION OF SPECIAL BENCH IN THE CA SE OF MERILYN SHIPPING & TRANSPORTS (SUPRA) AND OTHER RELEVANT CASE LAWS AND WILL DECID E THE ISSUE IN ACCORDANCE WITH LAW. 15. AS REGARDS LAST ISSUE REGARDING ADDITION O N ACCOUNT OF NON PRODUCTION OF VOUCHERS, WE FIND THAT THE ASSESSING OFFICER HAS MA DE DISALLOWANCE AS ASSESSEE WAS NOT ABLE TO PRODUCE VOUCHERS FOR EXPENDITURE CLAIME D UNDER HEAD TA AND CONVEYANCE. THE DISALLOWANCE MADE BY ASSESSING OFFICER AND CONF IRMED BY LEANED CIT(A) IS A REASONABLE DISALLOWANCE AND WE DO NOT SEE ANY INFIR MITY IN THE SAME. IN VIEW OF THE ABOVE GROUND NO. VI OF APPEAL IS DISMISSED. 16. GROUND NO. VII REGARDING LEVY OF INTEREST IS A CONSEQUENTIAL AND DO NOT REQUIRE ANY ADJUDICATION. 17. IN NUTSHELL, THE APPEAL FILED BY THE ASSESSEE I S PARTLY ALLOWED FOR STATISTICAL PURPOSES AND IS PARTLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DECEMBER, 2015. SD/- SD/- (A.D.JAIN) (T.S.KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23.12.2015 PK/PS 11. ITA NO.9 6(ASR)/2014 ASST. YEAR 200 7-08 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.