M/S AASHIRWAAD BUILDCON, BILASPUR,BILASPUR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), BILASPUR, BILASPUR

ITA 348/RPR/2024

AI Insights

The case involves M/s Aashirwaad Buildcon, which appealed against the order of the Commissioner of Income Tax (Appeals)-3, Raipur, confirming disallowances made by the Deputy Commissioner of Income Tax (Central)-2, Bilaspur. The disallowances pertained to wage/labour expenses and non-deduction of TDS on interest for the Assessment Year 2015-16. The primary contention was the disallowance of Rs.4,98,430/- claimed under wage/labour expenses, which the assessee argued was substantiated by evidence not considered by the lower authorities. The Income Tax Appellate Tribunal, Raipur, found that the CIT(A) had not adequately addressed the additional evidence provided and remanded the case for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 29779 (ITAT-RAIPUR)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Next Hearing Date: 09-10-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 01-08-2024
• Other Referred Cases: Tata Coffee Ltd vs. DCIT Karnataka High Court [2020] taxmann.com
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: R. B. DOSHI
• Keywords: Set aside; Opportunity of being heard; Additional evidence; TDS
• Section: 143(3); 250; 40(a)(ia)

Judgement Text

" आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM (ITA No. 348/RPR/2024) (Assessment Year: 2015-16) आदेश / O R D E R Per Arun Khodpia, AM: The aforesaid appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals)-3, Raipur [for short, “ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (in short, “the Act”), for the AY 2015-16, dated 03.06.2024, arises from the order u/s 143(3) of the Act passed by the Deputy Commissioner of Income Tax (Central)-2, Bilaspur [for short, “ld. AO”], dated 26.12.2017. M/s Aashirwaad Buildcon, Aashirwad Hospital, Raipur Road, Bodri, Bilaspur (C.G.) 495001 V S Deputy Commissioner of Income Tax, Circle- 1(1), Bilaspur, 495001 PAN: AABCH2709M (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से / Assessee by : Shri R.B. Doshi, CA राजˢ की ओर से / Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई की तारीख / Date of Hearing : 09.10.2024 घोषणा की तारीख / Date of Pronouncement : 17.10.2024 ITA No.348/RPR/2024 M/s Aashirwad Buildcon 2 2. The grounds of appeal raised by the assessee are extracted as under: “1. Ld. CIT(A) erred in confirming disallowances of Rs.4,98,430/- made by AO out of the wages/labour expenses claimed by the appellant without appreciating evidences on record and facts of the case properly. The disallowance made by AO and confirmed by ld. CIT(A) is arbitrary, baseless and not justified. 2. The appellant reserves the right to add, amend or modify any of the ground/s of appeal.” 3. Briefly stated, the facts of the case are that the assessee had filed its return of income on 30.10.2015, declaring total income of Rs.79,94,100/-. Subsequently, the case was selected for scrutiny through CASS under “limited security” category. Statutory notices were issued along with questionnaire which were duly served upon the assessee. The case was later converted into “complete scrutiny” with prior approval of the Ld. Principal Commissioner of Income Tax, Bilaspur vide letter dated 16.10.2017. The assessment proceedings have been carried out; written replies were filed by the assessee. After considering the reply, explanation and submissions of the assessee, ld. AO dissatisfied on two counts have made following additions / disallowances: (i) addition of Rs.6,139/- on account of violation of provisions u/s 40(a)(ia) of the Act for non-deduction of TDS on interest; (ii) disallowance on account of failure on the part of assessee to furnish documentary evidence in support of wage / labour expenses claimed for Rs.4,98,430/-. ITA No.348/RPR/2024 M/s Aashirwad Buildcon 3 With the aforesaid two disallowances, the taxable income of the assessee was determined at Rs.84,98,669/-. 4. Aggrieved with the aforesaid additions/disallowances by the ld. AO, the assessee carried the matter before the ld. CIT(A), wherein the issue regarding disallowances of wage expenses was assailed by the assessee, however, ld. CIT(A) had not found favour in the submissions of the assessee, so was not convinced with the assesee’s contention, accordingly, had sustained the disallowance made by the ld. AO. The finding of the ld. CIT(A), while dismissing the ground relevant to disallowance of wage / labour expenses claimed by the assessee are as under: “3.1.3 During the appellate proceedings, the appellant company furnished documentary evidence and remand report kept on record. ON examination, the assessee was also found that the payment vouchers which were made on different dates are further paid to different labourers on different dates of Rs.4,98,430/-. The fact that A/R on behalf of the assessee itself has accepted that they are not able to produce the payment vouchers which are not traceable at this moment. The onus was on the assessee to substantiate their claim of expenses, but the assessee has failed to discharge their onus. In view of the case of Tata Coffee Ltd vs. DCIT Karnataka High Court [2020] taxmann.com. “Where assessee claimed deduction on account of miscellaneous expenditure under section 37(1)(1) but failed to produce relevant evidences to justify the said expenditure, Assessing officer was justified in making adhoc disallowances of same.” Therefore, on the basis of facts discussed above, finding the Ld. Ao. I find that the Ld. AO justified a sum of Rs.4,98,430/- is disallowed and added back to the total income of the assessee. The appeal on the above ground are dismissed.” ITA No.348/RPR/2024 M/s Aashirwad Buildcon 4 5. Dissatisfied with the aforesaid order of ld. CIT(A), the assessee challenged the same by filing of present appeal, which is under consideration before us. 6. At the outset, it was the submission of the ld. AR that ld. CIT(A) had erred in deciding the issue by stating that the assessee’s authorized representative had accepted that they are not able to produce the payment vouchers and bills which are not traceable at this moment. Contradicting the finding of ld. CIT(A), it was the submission of the ld. AR that all the evidence necessary to substantiate the payment was furnished before the CIT(A) as additional evidence u/r 46A of Income Tax Rules, 1962 and a remand report has also been called for regarding such additional evidence. Copies of such evidence in the form of vouchers / bills and extract of wage payment register are placed before us at Pages No. 35 to 52 of the assessee’s paper book. It is the submission that all the necessary evidence were furnished before the ld. CIT(A), which were forwarded for remand report to the AO and in response, the AO had commented that as under: “3.1.2 The additional evidence as filed by the appellant were forwarded to the AO on 18.12.2023 for his comments The ld. AO has submitted remand report which is received in this office on 10.01.2024. The comments of the AO on the issue of admission of additional evidences are reproduced hereunder:- “It was also found that the payment vouchers which were made on different dates and further paid to different laborers on different dates of ITA No.348/RPR/2024 M/s Aashirwad Buildcon 5 Rs.4,98,430/-. This court have been presented during the course of assessment as sufficient opportunity has been given to the assessee to produce the copies of respective bills and vouchers. The onus was on the assessee to substantiate their claim of expenses, but the assessee has failed to discharge their onus after giving the sufficient opportunities. The assessee has produced the relevant vouchers/bills after giving an opportunity as per direction of Hon’ble CIT(A). The bills and vouchers are related to F.Y. 2014-15 and after a long gap of 9 years the copies have been produced at this end. This made such type of submission of the evidence suspicious or fabricated.” 7. Reverting to the comments of the AO that since the bills/vouchers are related to financial year 2014-15, the copies of the same were furnished by the assessee after long gap of 9 years, this made such submission / evidence suspicious or fabricated, however, no specific comment qua genuineness of payments have been pointed out by the ld. AO. Also, no enquiry from concerned parties have been made. Ld. AR further submitted that, the conclusion of ld. CIT(A) that the assessee failed to support the evidence to justify the said expenditure was against the facts on record, as the assessee had submitted all the documents which were rejected by the authorities without making any specific comments on the same. Under such facts and circumstances, the order of the CIT(A) on the issue confirming the disallowances of Rs.4,98,430/- made by the ld. AO out of the wage/labour expenses claimed by the assessee without appreciating the evidence available on record was arbitrary, baseless and unjustified. Therefore, the same is liable to be quashed. 8. Dr. Priyanka Patel learned Senior Departmental Representative (in short, ld. Sr.DR) vehemently supported the order of the CIT(A). ITA No.348/RPR/2024 M/s Aashirwad Buildcon 6 9. We have considered the rival submissions made by the learned authorized representatives of both the parties, orders of the lower authorities and have perused the materials available on record. 10. In the factual matrix of the present case, admittedly, necessary evidences to substantiate the payment made towards labour/wage could not be furnished by the assessee before ld. AO, however, the same were furnished during the appellate proceedings before the first appellate authority, which were further forwarded to the AO for his comments through remand report, wherein, the AO had requested not to accept such additional evidence u/r 46A and have alleged that the evidences furnished after such a long period of time are suspicious or fabricated. No specific finding or observation by the AO while making such comments on the genuineness of the vouchers and bills furnished by the assessee, neither any enquiry in this respect was found to be made from the concerned parties to verify the veracity of such evidence. Ld. CIT(A) had also summarily accepted the contentions of ld. AO and have mentioned that the assessee was unable to produce the payment vouchers stating that the same are not traceable at this moment, such finding of ld. CIT(A) found not to be as per facts and materials on record. 11. Under such facts and circumstances and in the interest of justice, we find it appropriate to send this issue back to the files of ld. CIT(A) to look into and ITA No.348/RPR/2024 M/s Aashirwad Buildcon 7 appreciate the copies of bills/vouchers furnished by the assessee and decide the issue afresh on the basis of such evidence, also conduct or direct to conduct necessary enquiries for verification of genuineness of such documents. Needless to say, reasonable and adequate opportunity of being heard shall be provided to the assessee in the set aside appellate proceedings. 12. Resultantly, the appeal of the assessee in ITA No. 348/RPR/2024 is partly allowed for statistical purposes. Order pronounced in the open court on 17/10/2024. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 17/10/2024 Hem आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, //True copy// (Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur 1. अपीलाथŎ / The Appellant- 2. ŮȑथŎ / The Respondent- 3. आयकर आयुƅ(अपील) / The CIT(A), 4. The Pr. CIT -1, Raipur, (C.G.) 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 6. गाडŊ फाईल / Guard file. "