ACIT, CIR-8, Nagpur V. SHRI K. GOPALKRISHAN KOUCHURAMAN, Nagpur

ITA 99/NAG/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2142 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 20-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Opportunity of being heard; Wrong claim

Judgement Text

1 ITA NO. 99/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 99/NAG/2013. ASSESSMENT YEAR : 2007 - 08. ASSTT. COMMISSIONER OF INCOME - TAX, SHRI K. GOPALKRISHAN KOUCHURAMAN, CIRCLE - 8, NAGPUR. VS. NAGPUR. PAN AEQPG8938B. APPELLANT. RESPONDENT. APPELLANT BY : SHRI A.R. NINAWE. RESPONDENT BY : NONE. DATE OF HEARING : 04 - 07 - 2016 DATE OF PRONOUNCEMENT : 12 TH JULY, 2016 O R D E R THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) I I, NAGPU R DATED 11 - 01 - 2013 AND PERTAINS TO ASSESSMENT YEAR 20 07 - 08 . THE GROUND OF APPEAL READS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.30,76,092/ - BEING THE AMOUNT OF OUTSTANDING LABOUR EXPENSES AS O N 31 - 03 - 2007. 2. BRIEF FACTS ON THIS ISSUE ARE AS UNDER : IT WAS NOTED BY THE AO THAT THE ASSESSEE HAS CLAIMED LABOUR EXPENSES AMOUNTING TO RS.65,34,022/ - OUT OF WHICH AN AMOUNT OF RS.30,76,092/ - WAS OUTSTANDING AS ON 31 ST MARCH, 2007. THE AO FURTHER NO TED THAT THE ASSESSEE HAS PRODUCED A FRESHLY PREPARED ATTENDANCE SHEET AND A FRESH ATTENDANCE REGISTER AND THAT THE AR COULD NOT PRODUCE THE EXACT DETAILS OF LABOURERS TO WHOM THE AMOUNT WAS PAYABLE. IT IS FURTHER NOTED BY THE AO THAT FULL DETAILS INCLUDIN G 2 ITA NO. 99/NAG/2013 VOUCHERS AND PAYMENTS WERE ALSO NOT PRODUCED. THE AO, THEREFORE, CONSEQUENTLY HELD THAT THE LIABILITY TO THE EXTENT OF RS.30,76,092/ - WAS WITHOUT PROOF AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3. UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) NOTE D THAT THE ASSESSEE HAS SUBMITTED DETAILS WHICH THE AO WAS SUPPOSED TO VERIFY. LEARNED CIT(APPEALS) FURTHER OBSERVED THAT EVEN DURING ASSESSMENT PROCEEDINGS, IT IS SEEN THAT NO DETAILED ENQUIRY HAVE BEEN CONDUCTED BY THE AO IN RESPECT OF THE DETAILS FILED TO ESTABLISH THAT THE CLAIM OF EXPENDITURE ON ACCOUNT OF LABOUR PAYMENT HAS BEEN INFLATED OR A BOGUS CLAIM HAS BEEN MADE BY THE ASSESSEE. THAT T HE AO WAS AT LIBERTY TO CONDUCT THE DETAILED ENQUIRIES, SUMMON LABOURERS ON A TEST CHECK BASIS OR CONDUCT ON THE SPOT ENQUIRIES TO ESTABLISH THE GENUINENESS OR OTHERWISE OF THE CLAIMS OF EXPENDITURE MADE BY THE ASSESSEE. THAT AO WAS AT LIBERTY TO ESTABLISH THAT CLAIM OF THE ASSESSEE AMOUNTING TO RS.30,76,092/ - IS BOGUS. THE LEARNED CIT(APPEALS) FURTHER HELD THAT THE AO HAS FAILED TO BRING ANY EVIDENCE ON RECORD TO ESTABLISH THE SAME. FURTHER, THE LEARNED CIT(APPEALS) REFERRED TO THE LETTER OF ASSISTANT COMMISSIONER OF P.F. LEARNED CIT(APPEALS) FURTHER REFERRED THAT THE BALANCE SHEET SUBMITTED BEFORE THE P.F. AUTHORIT IES WAS THE SAME AS THAT SUBMITTED BEFORE THE INCOME - TAX AUTHORITIES. IN THIS BALANCE SHEET THE OUTSTANDING WAGES WERE SAME. LEARNED CIT(APPEALS) HELD THAT AT NO POINT THE P.F. OFFICE HAS COME TO A CONCLUSION THAT THE CLAIM OF LABOUR EXPENSES AS DEBITED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS WAS INFLATED OR BOGUS. ACCORDINGLY LEARNED CIT(APPEALS) DIRECTED THAT THE ADDIT ION BE DELETED. 4. I HAVE HEARD THE LEARNED D.R. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, IN MY CONSIDERED OPINION THE ISSUE CAN BE DISPOSED OF BY HEARING THE LEARNED D.R. AND PERUSING THE RECORDS. 5. I FIND THAT IN THIS CASE THE AO IN HIS ASSESSM ENT ORDER HAS CLEARLY OBSERVED THAT THE ASSESSEE HAS NOT PRODUCED COGENT EVIDENCES FOR THE LABOUR 3 ITA NO. 99/NAG/2013 EXPENSES OUTSTANDING AS ON 31 ST MARCH, 2007. THE AO HAS NOTED THAT THE ASSESSEE HAS PRODUCED A FRESHLY PREPARED ATTENDANCE SHEET AND A FRESH ATTENDANCE REGIST ER AND THAT THE ASSESSEE COULD NOT PRODUCE THE EXACT DETAILS OF LABOURERS TO WHOM THE AMOUNT WAS PAYABLE. THE AO HAS FURTHER NOTED THAT THE ASSESSEE HAS NOT PRODUCED DETAILS INCLUDING VOUCHERS AND PAYMENTS. AGAINST THE ABOVE OBSERVATION OF THE AO, LEARNED CIT(APPEALS) HAS OBSERVED THAT THE ASSESSEE HAS SUBMITTED THE NECESSARY DETAILS AND THAT THE AO WAS SUPPOSED TO MAKE THE ENQUIRY WHICH HE HAS FAILED TO DO SO. 6. IN MY CONSIDERED OPINION IT IS A SETTLED LAW THAT THE POWERS OF LEARNED CIT(APPEALS) ARE COTER MINOUS WITH THAT OF THE AO. IF THE AO HAS FAILED TO MAKE NECESSARY ENQUIRY IT WAS INCUMBENT UPON THE CIT(APPEALS) TO MAKE NECESSARY ENQUIRY TO ESTABLISH THE VERACITY OF THE CLAIM OF EXPENSES. HONBLE APEX COURT IN THE CASE OF KAPURCHAND SHRIMAL VS. CIT 13 1 ITR 451 HAS HELD THAT IT IS THE DUTY OF THE APPELLATE AUTHORITY TO RECTIFY THE DEFECTS IN THE ORDER OF AUTHORITIES BELOW UNLESS PROHIBITED BY LAW. HENCE IN MY CONSIDERED OPINION, LEARNED CIT(APPEALS) HAS ERRED IN DIRECTING TO DELETE THE ADDITION MERELY O N THE GROUND THAT DESPITE THERE BEING PRIMA FACIE EVIDENCE OF LACK OF COGENCY OF OUTSTANDING LABOUR PAYMENTS , THE AO HAS NOT MADE PROPER ENQUIRY. FURTHER MORE I NOTE THAT LEARNED CIT(APPEALS) HAS RELIED UPON THE BALANCE SHEET SUBMITTED TO THE PROVIDENT FU ND OFFICE BY THE ASSESSEE. IN THIS REGARD IT HAS BEEN BROUGHT TO MY NOTICE BY THE LEARNED D.R. THAT IN THE LETTER FROM THE P.F. OFFICE HAS CLEARLY SUBMITTED THAT THE ASSESSEE HAS NOT SUBMITTED THE P.F. RETURN FOR ASSESSMENT YEAR 2006 - 07. IN SUCH CIRCUMSTAN CES, WHEN NO RETURN OF P.F. FOR ASSESSMENT YEAR 2006 - 07 HAS BEEN SUBMITTED, LEARNED CIT(APPEALS) PLACING HEAVY RELIANCE ON THE BALANCE SHEET FOR ASSESSMENT YEAR 2006 - 07 SUBMITTED TO THE P.F. DEPARTMENT IS ERRONEOUS. MOREOVER THE INCOME - TAX AUTHORITIES HAV E TO MAKE PROPER ENQUIRY TO ESTABLISH THE VERACITY OF THE FIGURES SUBMITTED IN THE RETURN OF INCOME. IN MY CONSIDERED OPINION, INTEREST OF JUSTICE IN THIS CASE 4 ITA NO. 99/NAG/2013 MANDATES THAT THE ISSUE BE REMITTED TO THE FILE OF LEARNED CIT(APPEALS). LEARNED CIT(APPEALS) I S DIRECTED TO CONSIDER THE ISSUE AFRESH AFTER ENSURING PROPER VERIFICATION OF THE ASSESSEES CLAIM OF OUTSTANDING EXPENSES FOR LABOUR PAYMENTS. NEEDLESS TO ADD, THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THIS APP EAL BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF JULY,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 12 TH JULY, 2016. COPY FORWARDED TO : 1. SHRI K. GOPALKRISHAN KOUCHURAMAN, A/13 - 2, N.S.K. SOCIETY, CIVIL LINES, NAGPUR - 440001. 2. A.C.I.T., CIRCLE - 8, NAGPUR. 3. C.I.T. - I V , NAGPUR. 4. CIT(APPEALS), - I I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.