I. T.O. Wd- 32(2), Kolkata, Kolkata v. M/s. S. P. Enterprises, Kolkata

ITA 1006/KOL/2009 | 2005-2006
Pronouncement Date: 03-08-2010

Appeal Details

RSA Number 100623514 RSA 2009
Assessee PAN AATFS9091A
Bench Kolkata
Appeal Number ITA 1006/KOL/2009
Duration Of Justice 1 year(s) 1 month(s) 24 day(s)
Appellant I. T.O. Wd- 32(2), Kolkata, Kolkata
Respondent M/s. S. P. Enterprises, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 03-08-2010
Appeal Filed By Department
Bench Allotted B
Tribunal Order Date 03-08-2010
Date Of Final Hearing 24-05-2010
Next Hearing Date 24-05-2010
Assessment Year 2005-2006
Appeal Filed On 09-06-2009
Judgment Text
1 B IN THE INCOME TAX APPELLATE TRIBUNAL BENCH- B KO LKATA [ . . . . . . . . . .. . . .. . !' ] BEFORE SHRI B.R.MITTAL JUDICIAL MEMBER & SRI C.D. RAO ACCOUNTANT MEMBER # # # # / ITA NO. 1006 (KOL) OF 2009 $%& '( / ASSESSMENT YEAR 2005-06 INCOME-TAX OFFICER WARD-32(2) KOLKATA. M/S. S.P. ENTERPRISES KOLKATA. (PAN-AATFS9091A) (+ / APPELLANT ) - % - - VERSUS - (/0+ / RESPONDENT ) + 1 2 !/ FOR THE APPELLANT: / SRI K. HARIPRASAD CIT /0+ 1 2 ! / FOR THE RESPONDENT: / SRI SOUMITRA CHOUDHURY !3 / ORDER ( . . . . . . . . ) (B.R.MITTAL) JUDICIAL MEMBER : THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSME NT YEAR 2005-06 AGAINST THE ORDER OF LD. C.I.T.(A)-XIX KOLKATA DATED 12/3/2009 ON THE FOLLOWING GROUNDS :- 1. THAT ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE LD. CIT(A) ERRED ON FACT & IN LAW TO IGNORE ADMISSION OF ASSESSEE AT THE ASSESSME NT STAGE TO DISALLOW THE ADDITIONS ON LABOUR CONTRACTUAL AND SUPERVISORY CHARGES OF R S.1 24 87 025/- AND RS.1 68 000/- U/S. 40(A)(IA) OF THE I.T. ACT READ WITH SECTION 194C & 194J. 2. THAT THE APPELLANT CRAVES LEAVE TO A DD ALTER MODIFY OR SUBSTITUTE GROUND(S) OF APPEAL DURING OR AT THE TIME OF PROCEEDINGS. 2. THE GROUND NO.1 WHICH IS THE ONLY SUBSTANTIVE GROUND COMPRISES OF TWO PARTS I.E. (I) DELETING THE DISALLOWANCE OF ADDITION ON A CCOUNT OF PAYMENT TO LABOUR AGGREGATING TO RS.1 24 87 025/- U/S. 40(A)(IA) READ WITH SEC. 194C OF THE ACT; AND (II) DELETING THE DISALLOWANCE OF RS.1 68 000/- ON ACCOU NT OF CONTRACTUAL AND SUPERVISORY CHARGES MADE BY THE A.O. AS PER SEC. 40(A)(IA) READ WITH SEC. 194J OF THE ACT. 3. FIRSTLY WE TAKE UP THE DELETION OF THE ADDITIO N ON ACCOUNT OF LABOUR PAYMENTS AGGREGATING TO RS.1 24 87 025/-. 2 4. THE RELEVANT FACTS ARE THAT THE ASSESSEE IS ENG AGED IN THE BUSINESS OF WORKS CONTRACT ENGAGING LABOURERS. DURING THE ACCOUNTING YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE-FIRM RECEIVED INC OME OF RS.2 93 28 330/- ON ACCOUNT OF CONTRACT BILL AND PAID LABOUR CHARGES OF RS.1 24 87 025/-. IN THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE PAID THE SUM OF R S.87 67 825/- AND SHOWED OUTSTANDING LABOUR CHARGES OF RS.37 20 199/- IN THE BALANCE SHEET. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E ASSESSEE PRODUCED PAY ROLL/ ATTENDANCE SHEET TOTALING TO RS.87 67 026/- AND BAL ANCE AMOUNT OF RS.37 20 200/- WAS SHOWN AS OUTSTANDING LABOUR PAYMENT TO 24 PARTIES. THE A.O. NOTED DISCREPANCIES IN THE PAY ROLL/ATTENDANCE SHEET OF LABOURERS ENGAGED DIRE CTLY BY THE ASSESSEE AND THE SAME ARE NARRATED BY THE A.O. AT PAGES 6 & 7 OF THE ASSE SSMENT ORDER AS UNDER :- 1. THE ASSESSEE SUBMITTED COPIES OF 208 SHE ETS OF PAY ROLL/ATTENDANCE SHEET THE ORIGINAL OF WHICH ARE PRODUCED FOR VERIFICATION BEFORE ME. I T IS SEEN THAT THE ORIGINAL SHEETS OF PAY ROLL ARE IN PRISTINE WHITE CONDITION FROM WHIC H IT IS CLEAR THAT THESE ARE FABRICATED DOCUMENTS PREPARED TO SUBMIT BEFORE THE ASSESSING O FFICER & SUBSTANTIATE ITS CLAIM ONLY NOT THE ORIGINAL PAY ROLL OF VARIOUS SITES. 2. THE ASSESSEE IS DOING CONTRACT WORK IN VA RIOUS SITES ALL OVER INDIA BUT THERE IS MENTION OF NAME OF THE SITE SIGNATURE OF SITE IN-CHARGE AN D OF PARTNER MENTION OF PERIOD/DATE FOR WHICH THE PAYMENT WAS MADE. 3. ON MOST OF THE SHEETS IT IS SEEN THAT T HE ASSESSEE HAS ENGAGED EACH LABOURER FOR 14 TO 16 HOURS WHICH IS NOT ONLY ABSURD BUT ALSO INHUMAN. 4. IN ONE OF THE SHEET (SHEET NO. 133) IT IS SEEN THAT WHERE THE NAME OF THE LABOURER WAS WRITTEN AS GOPAL DHARA THE SIGNATURE ON THE REVE NUE STAMP WAS OF ONE ANUP. 5. IN ONE OF THE SHET (SHEET NO. 129) REVE NUE STAMP WAS PUT OF BUT THERE IS NO NAME AND SIGNATURE OF THE LABOURER. 6. IN SHEET NO. (SHEET NO. 110 TO 114) THE RE IS NO SIGNATURE OF THE LABOURERS TO WHOM THE PAYMENT WAS MADE EXCEPT IN ONE OR TWO CASES. 7. IN SHEET NO. 180 THERE IS A MENTION OF PAYMENT OF RS.4 800/- TO SK. SALAUDDIN BUT NO SIGNATURE OF THE LABOURER WAS THERE. 8. FROM PERUSAL OF ALL THE SHEETS IT IS SE EN THAT ALL THE LABOURERS ARE PRESENT IN MOST OF DAYS AND DOING EXTRA WORKS FOR 6 TO 8 HOURS DAILY. THIS IS DIFFICULT TO BELIEVE AS NORMALLY FOR A HUMAN BEING DOING SUCH TYPE OF HARD MANUAL LABOUR WORK AT A STRETCH FOR A LONG OF PERIOD IS PRACTICALLY IMPOSSIBLE. 3 9. THERE IS NO PROOF OF ANY PAYMENT OF E.S.I. PROVIDE NT FUND MEDICAL EXPENSES OR ANY OTHER WELFARE MEASURE FOR SUCH A LARGE NUMBER OF LA BOURER. THE A.O. STATED THAT THE SAID PAY ROLL/ ATTENDANCE SHEET WERE FABRICATED AND WERE MADE BY THE ASSESSEE TO PRODUCE BEFORE THE A.O. TO AVOID PAYMENT OF TAX. FURTHER THE A.O. HAS STATED THAT THE ASSESSEE STATED THAT IT ENGAGED SUB-CONTRACTOR TO COMPLETE THE JOB AGAINST WHICH THE SAID AMOUNT OF RS.37 20 199/- WAS OUTSTANDING. 6. IN VIEW OF THE ABOVE FACTS THE A.O. STATED THA T CONSIDERING THE VOLUME OF WORK CONTRACT THE ASSESSEE-FIRM WAS DOING LABOUR CONTRA CT WORK FOR VARIOUS PARTIES THROUGH THE SUB-CONTRACTOR TO WHOM THE ASSESSEE MADE PAYMEN TS WITHOUT DEDUCTING TAX AT SOURCE. THE A.O. HAS FURTHER STATED THAT THE ASSES SEE FAILED TO PRODUCE THE BOOKS OF ACCOUNTS IN SPITE OF GETTING SEVERAL OPPORTUNITIES. THEREFORE THE A.O. MADE DISALLOWANCES OF THE SAID SUM OF RS.37 20 200/- AND ALSO THE AMOUNT OF RS.87 66 825/- AS PER SEC. 40(A)(IA) READ WITH SEC. 194C OF THE AC T. BEING AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 7. ON BEHALF OF THE ASSESSEE IT WAS CONTENDED BEFO RE THE LD. C.I.T.(A) THAT THE LABOURERS WERE PROCURED FROM FAR FLUNG AREAS OF BEN GAL AND BIHAR. IN ORDER TO HAVE BETTER MANAGEMENT AND CONTROL OVER THE LABOUR WORK FORCE THEY WERE PLACED UNDER VARIOUS LABOUR SARDARS/GROUP LEADERS WHO BROUGHT T HEM FROM THOSE AREAS FOR EFFICIENT EXECUTION OF CONTRACT WORK. THE SITE SUPERVISOR OF THE ASSESSEE-FIRM COORDINATED THE WORK WITH THE HELP OF LABOUR SARDARS. THEREFORE T HEY COULD NOT BE TERMED AS LABOUR CONTRACTOR AND THUS THE PROVISIONS OF SEC. 194C COU LD NOT BE MADE APPLICABLE. IT WAS ALSO CONTENDED ON BEHALF OF THE ASSESSEE THAT IN RE SPECT OF PAYMENT OF LABOUR CHARGES OF RS.87 67 026/- THE SAID PAYMENTS WERE TOWARDS WAGE S MADE INDIVIDUALLY TO ALL THE LABOURERS AND NOT TO THE CONTRACTOR AS CONCLUDED BY THE A.O. IT WAS CONTENDED THAT THE PROVISIONS OF SEC. 194C COULD NOT BE MADE APPLICABL E AS NO CONTRACTOR WAS APPOINTED TO PROCURE THE LABOURERS. THE LD. C.I.T.(A) CONSIDERI NG THE ABOVE SUBMISSIONS OF THE ASSESSEE HAS DELETED THE SAID DISALLOWANCES MADE BY THE A.O. AND THE RELEVANT PARA VIZ. 6.2 READS AS UNDER :- (6.2) I HAVE CONSIDERED THE SUBMISSION OF THE AP PELLANT AND PERUSED THE MASTER ROLL/WAGE PAYMENT SHEETS AND THE ASSESSMENT ORDER. ON PERUSAL OF DETAILS OF OUTSTANDING LABOUR CHARGES AMOUNTING TO RS.37 20 19 9/- IT WAS OBSERVED THAT THE 4 AMOUNT HAS BEEN SHOWN AGAINST 24 PERSONS WHO HAD BE EN DESIGNATED AS LABOUR SARDAR/GROUP LEADER. FOR EXAMPLE THERE IS A GROUP LEADER NAMED AS ARABINDA BERA. IN HIS GROUP THERE WERE ANOTHER 29 PERSONS W ITH HIM. SHRI ARABINDA BERA HIMSELF WAS A LABOURER. HOWEVER FOR THE CONVENIENC E OF ACCOUNTING AND CONTROL OVER THE WORK OF THE GROUP SHRI BERA HAS BEEN DESI GNATED AS LABOUR SARDAR AND THE OUTSTANDING WAGES OF HIS GROUP AMOUNTING TO RS. 4 32 457/- HAS BEEN SHOWN AGAINST HIS NAME. SIMILAR WAS THE SITUATION WITH RE SPECT TO OTHER 23 LABOUR SARDARS AGAINST WHOM THE OUTSTANDING WAGES HAS BEEN SHOWN. HOWEVER ON PERUSAL OF MASTER ROLL IT IS SEEN THAT THE WAGE PAYMENT HAS BE EN MADE INDIVIDUALLY TO ALL THE LABOURERS. HERE IT IS NOT THE CASE THAT THE LABOUR SARDAR WAS THE SUB-CONTRACTOR AND THE APPELLANT HAS MADE PAYMENT TO THAT LABOUR SARDA R. THE WAGE PAYMENT SHEETS MAINTAINED BY THE APPELLANT SHOWS THE NAME OF THE L ABOURER DESIGNATION DATES TOTAL DAYS OF WORK OVERTIME HOURS RATE TOTAL AMOUNT OF WAGES AND ADVANCE GIVEN ETC. WHILE MAKING THE WAGE PAYMENT THE SIGNATURES OF AL L THE LABOURERS HAVE BEEN OBTAINED ON THE WAGE PAYMENT SHEET. SIMILAR WAS THE SITUATION WITH RESPECT TO WAGE PAYMENTS OF RS.87 67 083/-. ON PERUSAL OF BANK STA TEMENT OF THE APPELLANT IT IS OBSERVED THAT THE APPELLANT HAS WITHDRAWN THE CASH FROM THE BAN TO MAKE THE PAYMENT OF WAGES. HAD IT BEEN THE PAYMENT TO THE LA BOUR SUB-CONTRACTOR IT COULD HAVE ISSUED CHEQUE TO LABOUR CONTRACTOR FOR MAKING THE PAYMENT TO THE LABOURERS BROUGHT BY HIM. IN THAT SITUATION THE APPELLANT WA S ALSO NOT REQUIRED TO MAINTAIN THE WAGE PAYMENT SHEETS FOR MAKING THE PAYMENT INDIVIDU ALLY TO ALL THE LABOURERS. THE A.O. HAS NOT BROUGHT ANYTHING ON RECORD TO PROVE TH AT THE PAYMENT WAS MADE TO THE LABOUR CONTRACTORS BY THE APPELLANT AND NOT INDIVID UALLY TO ALL THE LABOUERS. THE A.O. WAS NOT JUSTIFIED IN PRESUMING THAT THE PAYMENTS OF LABOUR CHARGES WERE MADE TO THE LABOUR SUBCONTRACTORS MERELY FOR THE REASON THAT TH ERE WERE CERTAIN OMISSIONS IN MAINTENANCE OF ATTENDANCE SHEETS AND WAGE PAYMENT S HEETS. ON PERUSAL OF WAGE PAYMENT SHEETS AND METHOD AND MODE OF PAYMENT OF WA GES BY THE APPELLANT I AM OF THE OPINION THAT THERE EXISTS EMPLOYER AND EMPLOYEE RELATIONSHIP AND THE APPELLANT HAS NOT ENGAGED ANY SUB-CONTRACTOR TO PROVIDE THE L ABOUR FORCE. UNDER THE CIRCUMSTANCES THE PROVISIONS OF SECTION 194C READ WITH SECTION 40(A)(IA) ARE NOT APPLICABLE IN THE CASE OF THE APPELLANT. THE A.O. I S DIRECTED TO DELETE THE ADDITIONS OF RS.37 20 199/- AND RS.87 66 825/- MADE BY HIM UNDER SECTION 40(A)(IA) OF THE I.T. ACT. THE GROUND NOS. 3 AND 4 ARE ALLOWED. HENCE THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUN AL. 8. ON BEHALF OF THE DEPARTMENT THE LD. DEPARTMENT AL REPRESENTATIVE CONTENDED THAT THE A.O. POINTED OUT DISCREPANCIES IN THE ATTENDANC E SHEET/PAY ROLL FURNISHED BY THE ASSESSEE AND CONCLUDED THAT THE PAYMENTS WERE NOT M ADE BY THE ASSESSEE DIRECTLY TO THE LABOURERS BUT THROUGH THE SUB-CONTRACTOR. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE ITSELF ADMITTED BEFORE THE A.O. IN RESPECT OF OUTSTANDING PAYMENTS OF RS.37 20 199/- OF ENGAGING THE SUB-CONT RACTOR. HE SUBMITTED THAT THE ASSESSEE PLACED NEW FACTS BEFORE THE LD. C.I.T.(A) THAT THE PAYMENTS WERE MADE THROUGH 5 LABOUR SRADARS TO FACILITATE THE EXECUTION OF THE W ORK AND MAKING THE PAYMENTS AND THE LD. C.I.T.(A) ACCEPTED THE SAID CONTENTION OF THE A SSESSEE WITHOUT SEEKING REMAND REPORT FROM THE A.O. 9. ON THE OTHER HAND THE LD. A/R SUBMITTED THAT R EMAND REPORT WAS SOUGHT BY THE LD. C.I.T.(A) AND ALSO FURNISHED A COPY OF THE SAME AT THE TIME OF HEARING OF THE APPEAL. HOWEVER IN REPLY TO A QUERY FROM THE BENCH THE LD . A/R CONCEDED THAT THE SAID REMAND REPORT WAS IN RESPECT OF PURCHASES MADE BY THE ASSE SSEE AND NOT IN RESPECT OF THE ISSUE UNDER CONSIDERATION. FURTHER THE LD. A/R REFERRED PAGES 183 & 184 OF THE PAPER BOOK GIVING THE DETAILS OF PAYMENTS AGGREGATING TO RS.87 67 983/- IN THE FINANCIAL YEAR 2004- 05 AND SUBMITTED THAT A COPY OF THE PAY ROLL IS PLA CED AT PAGES 185 TO 397 OF THE PAPER BOOK. HE SUBMITTED THAT ALL THE SAID LABOURERS WER E DIRECTLY ENGAGED BY THE ASSESSEE AND NOT THROUGH THE LABOUR CONTRACTOR. THE LD. A/R ALSO REFERRED PAGES 398 TO 465 OF THE PAPER BOOK IN RESPECT OF THE DETAILS OF PAYMENTS AG GREGATING TO RS.37 20 199/- AND SUBMITTED THAT THE SAID PAYMENT WAS MADE BY THE ASS ESSEE THROUGH LABOUR SARDARS. HE SUPPORTED THE ORDER OF THE LD. C.I.T.(A). 10. WE HAVE CONSIDERED THE ORDERS OF THE AUTHORITI ES BELOW AND SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES. ON PERUSAL OF THE ORDER OF THE A.O. WE OBSERVE THAT THE ASSESSEE CONTENDED BEFORE HIM THAT THE ASS ESSEE ENGAGED LABOURERS THROUGH SUB- CONTRACTOR AND WHEREAS BEFORE THE LD. C.I.T.(A) THE ASSESSEE CONTENDED THAT THE LABOURERS WERE DIRECTLY ENGAGED BY THE ASSESSEE AND THE PAYME NTS WERE MADE THROUGH LABOUR SARDARS AND NOT THROUGH THE CONTRACTOR. WE FIND SU BSTANTIAL FORCE IN THE CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE THAT THERE IS V ARIANCE IN THE STAND TAKEN BY THE ASSESSEE BEFORE THE A.O. VIS--VIS BEFORE THE LD. C .I.T.(A). IT IS A FACT THAT THE ASSESSEE DID NOT DEDUCT TDS ON THE GROUND THAT THE PROVISION OF SEC. 194C OF THE ACT IS NOT APPLICABLE. IT IS ALSO A FACT THAT THE LD. C.I.T.( A) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE FOR DELETING THE SAID DISALLOWANCE AGGREGA TING TO RS.1 24 87 025/- MADE BY THE A.O. WITHOUT SEEKING A REMAND REPORT FROM THE A.O. ON THE ABOVE ASPECT. IN THE INTEREST OF JUSTICE AND CONSIDERING THE FACTS OF THE CASE W E CONSIDER IT PRUDENT TO RESTORE THIS ISSUE TO THE A.O. TO DECIDE THE SAME AFRESH AFTER C ONSIDERING SUCH DOCUMENTS AND THE CONTENTIONS AS TAKEN BY THE ASSESSEE BEFORE THE LD. C.I.T.(A) BY A REASONED ORDER AND 6 AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSE SSEE. HENCE THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE BY ALLOWING THE ABO VE GROUND TAKEN BY THE DEPARTMENT FOR STATISTICAL PURPOSES. 11. IN REGARD TO DELETION OF DISALLOWANCE OF RS.1 68 000/- BY THE LD. C.I.T.(A) THE SAID AMOUNT COMPRISED OF TWO COMPONENTS I.E.(A) OF RS.96 000/- AND (B) OF RS.72 000/-. 12. IN RESPECT OF THE SUM OF RS.96 000/- THE A.O. HAS STATED THAT THE ASSESSEE DEBITED THIS AMOUNT UNDER THE HEAD CONSULTANCY CHARGES IN THE P/L ACCOUNT. AT THE TIME OF ASSESSMENT PROCEEDINGS THE ASSESSEE STATED THAT IT ENGAGED M/S. A. RAHAMAN & ASSOCIATES TAX CONSULTANT AND MOINUDDIN BIN MUKSHE D FOR DAY TO DAY CONSULTANT WORK. IT IS RELEVANT TO STATE THAT THE ASSESSEE PA ID A SUM OF RS.60 000/- TO M/S. A. RAHAMAN & ASSOCIATES AND RS.36 000/- TO MOINUDDIN B IN MUKSHED. THE A.O. STATED THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TDS U/S. 1 94J AS THE PAYMENTS MADE TO THEM WERE MORE THAN RS.20 000/- AND SINCE THE ASSESSEE F AILED TO DEDUCT TDS THE A.O. AS PER SEC. 40(A)(IA) OF THE ACT DISALLOWED THE ABOVE PAYM ENTS AGGREGATING TO RS.96 000/-. 13. IN RESPECT OF RS.72 000/- THE ASSESSEE DEBITE D THIS SUM UNDER THE HEAD SUPERVISION CHARGES IN THE P/L ACCOUNT. THE SAID PAYMENT WAS MADE TO ONE SRI SK. HASIBUR THROUGH SELF-MADE VOUCHERS AND IT WAS STATE D THAT HE LOOKED AFTER AND SUPERVISED THE WORK. THE A.O. STATED THAT THE ASSE SSEE WAS REQUIRED TO DEDUCT TDS U/S. 194J OF THE I.T. ACT AS THE PAYMENT MADE WAS MORE T HAN RS.20 000/-. SINCE THE ASSESSEE FAILED TO DEDUCT TDS THE A.O. MADE DISALL OWANCE OF RS.72 000/- U/S. 40(A)(IA) OF THE ACT. 14. BEING AGGRIEVED THE ASSESSEE FILED APPEAL BEF ORE THE FIRST APPELLATE AUTHORITY. 15. IN RESPECT OF THE DISALLOWANCE OF RS.96 000/- THE ASSESSEE CONTENDED BEFORE THE LD. C.I.T.(A) THAT SRI A. RAHAMAN WAS ENGAGED BY TH E ASSESSEE FOR THE PURPOSE OF DAY TO DAY ACCOUNTING JOB AND MOINUDDIN BIN MUKSHED WAS EM PLOYED AS JUNIOR ACCOUNTANT. THAT BOTH THE PERSONS WERE THE REGULAR EMPLOYEES OF THE ASSESSEE AND THERE WAS EMPLOYER AND EMPLOYEE RELATIONSHIP. THE LD. C.I.T. (A) ACCEPTED THE ABOVE CONTENTION OF THE ASSESSEE AND VIDE PARA-7.2 OF THE IMPUGNED O RDER DELETED THE SAID ADDITION OF RS. 96 000/- BY HOLDING AS UNDER :- ( 7.2) I HAVE CONSIDERED THE SUBMISSION OF THE APPEL LANT AND PERUSED THE DOCUMENTS. IT IS APPARENT FROM THE RECORD THAT THE APPELLANT HAS EMPLOYED BOTH THE 7 PERSONS FOR THE PURPOSE OF MAINTENANCE OF ACCOUNTS AT THE MONTHLY SALARY OF RS.5 000/- AND RS.3 000/- RESPECTIVELY. SHRI A. RA HMAN WAS IN THE EMPLOYMENT OF THE APPELLANT SINCE 1.4.2002 AND SHRI MUKSHED WAS T HE EMPLOYEE OF THE APPELLANT SINCE 28.6.2002. UNDER THE CIRCUMSTANCES I AM OF THE OPINION THAT THE PROVISIONS OF SECTION 194J OF THE I.T. ACT ARE NOT APPLICABLE. THE A.O. IS DIRECTED TO DELETE THE ADDITION OF RS.96 000/-. 16. FURTHER IN RESPECT OF RS.72 000/- DISALLOWED BY THE A.O. THE ASSESSEE CONTENDED THAT SK. HASIBUR WAS ALSO AN EMPLOYEE OF THE AZSSES SEE-FIRM AT A BASIC PAY OF RS.6 000/- PER MONTH. THE ASSESSEE PRODUCED THE ATTENDANCE RE GISTER BEFORE THE LD. C.I.T.(A). THE LD. C.I.T.(A) ACCEPTED THE SAID CONTENTION OF THE A SSESSEE AND VIDE PARA-8.2 OF THE IMPUGNED ORDER DELETED THE SAID DISALLOWANCE OF RS. 72 000/-. PARA-8.2 READS AS UNDER :- ( 8.2) I HAVE CONSIDERED THE SUBMISSION OF THE APPEL LANT AND PERUSED THE DOCUMENTS. FROM THE DOCUMENT AND RECORD IT IS APP ARENT THAT SK. HASIBUR HAS BEEN EMPLOYED BY THE APPELLANT AS SITE SUPERVISOR FOR SU PERVISION OF LABOURERS AND OTHER WORK AT SITE. HE HAS BEEN PAID MONTHLY SALARY OF R S.6 000/-. UNDER THE CIRCUMSTANCES I AM OF THE OPINION THAT IN THIS CAS E PROVISIONS OF SECTION 194J READ WITH SECTION 40(A)(IA) OF THE ACT ARE NOT APPLICABL E. THE A.O. IS DIRECTED TO DELETE THE ADDITION OF RS.72 000/- MADE U/S. 40(A)(IA) OF THE I.T. ACT. 17. HENCE THE DEPARTMENT HAS DISPUTED THE ABOVE OR DER OF THE LD. C.I.T.(A) IN APPEAL BEFORE THE TRIBUNAL. 18. DURING THE COURSE OF HEARING THE LD. DEPARTME NTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAD CHANGED ITS STAND BEFORE THE LD. C .I.T.(A) THAT THE ABOVE PAYEES WERE EMPLOYEES OF THE ASSESSEE AND WHEREAS BEFORE THE A. O. IT WAS STATED THAT THE PAYMENTS WERE MADE FOR CONSULTANCY AND SUPERVISORY CHARGES T O THE RESPECTIVE ABOVENAMED PERSONS. THE LD. DEPARTMENTAL REPRESENTATIVE CONTE NDED THAT THE LD. C.I.T.(A) HAS ACCEPTED THE NEW FACTS AND THE CONTENTION OF THE AS SESSEE WITHOUT SEEKING REMAND REPORT FROM THE A.O. 19. ON THE OTHER HAND THE LD. A/R RELIED ON THE O RDER OF THE LD. C.I.T.(A) AND SUBMITTED THAT THE PROVISION OF SEC. 194J IS NOT AP PLICABLE AS THE ABOVENAMED PAYEES WERE EMPLOYEES OF THE ASSESSEE. 20. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE LEARNED REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW . WE FIND SUBSTANCE IN THE SUBMISSION OF THE LD. DEPARTMENTAL REPRESENTATIVE THAT THE ASS ESSEE HAS TAKEN A DIFFERENT STAND 8 BEFORE THE LD. C.I.T.(A) THAT SRI A. RAHAMAN MOINU DDIN BIN MUKSHED AND SK. HASIBUR WERE EMPLOYEES OF THE ASSESSEE AND THEY WERE NOT TH E CONSULTANTS/SUPERVISORS ENGAGED BY THE ASSESSEE AS CONTENDED BEFORE THE A.O. THER EFORE THE ASSESSEE HAS TAKEN A DIFFERENT STAND BEFORE THE A.O. VIS--VIS LD. C.I.T .(A). WE THEREFORE CONSIDER IT PRUDENT AND REASONABLE THAT THE MATTER SHOULD BE RE STORED TO THE A.O. WITH A DIRECTION THAT THE A.O. WILL CONSIDER THE STAND TAKEN BY THE ASSESSEE BEFORE THE LD. C.I.T.(A) ON THE BASIS OF SUCH DOCUMENTS AS MAY BE FILED BY THE ASSE SSEE AND DECIDE THE ISSUE AFRESH AS PER PROVISIONS OF LAW AND AFTER GIVING DUE OPPORTUN ITY OF HEARING TO THE ASSESSEE. HENCE THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE ARE ALSO SET ASIDE BY RESTORING THE ISSUE TO THE A.O. 21. IN THE RESULT THE APPEAL BY THE DEPARTMENT IS ALLOWED FOR STATISTICAL PURPOSES. 4 !3 '5! 6 5% 7 48 THIS ORDER IS PRONOUNCED IN OPEN COURT ON 03.08.2010. SD/- SD/- ( . .. . . .. . ) !' ( . . . . . . . . ) (C.D.RAO) ACCOUNTANT MEMBER (B.R.MITTAL) JUDICIAL MEMBER ( (( ( ' ' ' ') )) ) DATE: 03-08-2010 !3 1 /$$9 :!9';- COPY OF THE ORDER FORWARDED TO : 1. + / THE APPELLANT : THE I.T.O. WARD-32(2) KOLKATA. 2 /0+ / THE RESPONDENT : M/S.S.P.ENTERPRISES 20 ELLIOT LANE KOLKATA-700 0 71 3. $3% () : THE CIT(A)-XIX KOLKATA. 4. $3%/ THE CIT KOL- 4. @$7 /$% / DR ITAT KOLKATA BENCHES KOLKATA 5. GUARD FILE . 09 /$/ TRUE COPY !3%5/ BY ORDER (DKP) B C / DEPUTY REGISTRAR .