DCIT, Circle - 48, Kolkata, Kolkata v. Sk. Saifuddin, Howrah

ITA 1648/KOL/2010 | 2006-2007
Pronouncement Date: 29-04-2015

Appeal Details

RSA Number 164823514 RSA 2010
Assessee PAN AMVPS6787R
Bench Kolkata
Appeal Number ITA 1648/KOL/2010
Duration Of Justice 4 year(s) 8 month(s) 8 day(s)
Appellant DCIT, Circle - 48, Kolkata, Kolkata
Respondent Sk. Saifuddin, Howrah
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2015
Appeal Filed By Department
Bench Allotted A
Tribunal Order Date 29-04-2015
Assessment Year 2006-2007
Appeal Filed On 20-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOLKATA [BEFORE HON BLE SHRI MAHAVIR SINGH JM & HON BLE SHRI B.P.JAIN AM ] I.T.A NO.1555/KOL/2010 ASSESSMENT YEAR: 2006 - 07 SK.SAIFUDDIN VS D.C.I.T. CIRCLE - 48 KOLKATA KOLKATA (PAN : AMVPS 6787 R) I.T.A NO.1648/KOL/2010 ASSESSMENT YEAR: 2006 - 07 D.C.I.T. CIRCLE - 48 VS. SK. SAIFUDDIN KOLKATA KOLKATA (APPELLANT) ( RESPONDENT) (PAN: AMVPS 6787 R) FOR THE ASSESSEE : SHRI I.BANERJEE FCA FOR THE DEPARTMENT : SMT. RANU BISWAS JCIT DATE OF HEARING : 20.04 . 2015. DATE OF PRONOUNCEMENT: 29.04.2015. ORDER PER SHRI B.P.JAIN AM : THESE CROSS APPEALS OF THE ASSESSEE AND REVENUE ARISE OUT OF THE ORDER OF LD. CIT(A) - XXX KOLKATA DATED 03.05.2010 FOR A SSESSMENT YEAR 2006 - 07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1 ) THAT ON THE FACTS AND CIRCUM ST AN CES OF CASE A ND IN L A W TH E LD . C I T (A) . WA S N O T JUSTIFIED IN UPHOLDING AND C O N F IRMIN G AN A DDI T I O N O F R S .77 4000 1 - T O TH E R E TURN E D INCO ME MEREL Y ON THE BASIS OF S OM E PURPORT E D D E CLAR A TI O N F R O M TH E A PP E I L A NT W HIL E NO EVIDENCE OF ANY KIND COULD BE EITHER DETECTED OR ID E NTIFI E D B Y THE LD . RE S PONDENT EITHER DURING THE SURVE Y OPERATION U/S 133A O R AT AN Y TIME THER E AFT E R . 2 ) THAT ON THE FACT S AND CIRCUM S T A NC ES O F C ASE A ND IN LA W TH E LD . C I T (A) WAS N O T JUSTIFIED IN UPHOLDING AND CONFIRMIN G AN A DDITION OF R S . 800000 1 - A S UNDI SC L OSE D INCOME ARISING FROM ALLEGED UNDISCLO S ED DEPO S IT FR O M TH E T E NANT S MEREL Y BA SE D O N S OME UNAUTH E NTICAT E D A ND PUR P O RT E D D E CL A RATI O N F R O M THE A PP E LL A NT W ITHOUT APPRECIATIN G TH E A B SE N CE OF A N Y TA N G I B L E A ND L EG I T IM ATE EV ID E NC E IN THI S B E H A L F . ITA NOS1555/KOL/2010 & 1648/KOL/2010 SK.SAIFUDDIN A.YR. 2006 - 07 2 3 ) T HE A PP E LL A NT C R AVES L EAVE T O GO F O R A DDITI O N A L GRO UND S M O DIF Y OR DELET E AN Y OF T H E EX I S TIN G GR O UND S E ITH E R B EFORE O R DURIN G TH E A PP EA L H EAR IN G. 2.1. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.4 84 92 180/ - MADE BY A.O. FOR THE VIOLAT ION OF PROVISIONS OF SECTION 40(A)(IA) OF THE I.T.ACT 1961. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.96 98 436/ - MADE BY A.O. U/S 40A(3) OF THE I.T.ACT 1961. FIRST OF ALL WE TAKE UP THE APPEAL OF THE ASSESSEE AS UNDER : - ITA NO.1555/KOL/2010 (ASSESSEE S APPEAL) : 3. THE FACTS OF THE CASE IN BOTH THE GROUNDS OF APPEAL ARE THAT A SURVEY U/S 133A OF THE ACT WAS CONDUCTED IN THE CASE OF ASSESSEE IN THE MONTH OF MAY 2007. T HE ASSESSEE MADE A DECLARATION OF RS.7 74 000/ - AS INCOME ADDED TO THE BUSINESS PROFIT AND DEPOSIT RECEIVED FROM TENANTS WHICH IS NOT REFUNDABLE AT RS.8 00 000/ - . THE SAME WAS ACCEPTED BY THE AO. 3.1. BEFORE THE LD. CIT(A) THE ASSESSEE FURNISHED EXPLANATI ON THAT SO CALLED VOLUNTARY DISCLOSURE WAS NEVER MADE BY THE ASSESSEE AND IT CANNOT BE RESORTED TO AS A PIECE OF EVIDENCE AS THE ASSESSEE WAS TOTALLY ABSENT DURING THE ENTIRE COURSE OF SURVEY AND HAD NO OACCATION TO GO FOR ANY VOLUNTARY DISCLOSURE IN PURSU ANCE THEREOF. HE RELIED UPON THE DECISIONS OF THE VARIOUS COURTS OF LAW AS UNDER : - ( I ) PAUL MATHEW & SONS VS CIT 63 ITR 101 (II)RAMESHWAR MODI VS CIT 256 ITR 536 (RAJ) (III)CIT VS G.K.SENNIAPPAN 84 ITR 220 (IV)CIT VS KHADER KHAN SONS 300 ITR 157 (MAD) (V)174 TAXMAN 466 (GUJ) (VI) 115 TTJ 173 (ITAT MADRAS) (VII)263 ITR 101 (KERALA) (VIII)256 ITR 536 (RAJ) (IX) 300 ITR 157 (MADRAS) 3.2. THE LD. CIT(A) CONFIRMED THE ACTION OF AO AND IT IS VERY MUCH RELEVANT TO REPRODUCE THE SAME AS UNDER : - ITA NOS1555/KOL/2010 & 1648/KOL/2010 SK.SAIFUDDIN A.YR. 2006 - 07 3 I HAVE CONSIDERED THE EXPLANATION OF THE APPELLANT. IT IS SEEN FROM THE RECORD THAT THE APPELLANT HAS MADE A DECLARATION OF UNDISCLOSED INCOME IN THE COURSE OF SURVEY. THE STATEMENT OF THE APPELLANT WAS RECORDED ON 25 - 06 - 2007. IN ANSWER TO QUESTION NO.1 & 2 THE APPELLANT HAS DISCLOSED AN AMOUNT OF RS.7 74 000/ - AND RS.8 00 000/ - AS UNDISCLOSED INCOME. THE RELEVANT PORTION OF THE STATEMENT IS GIVEN AS UNDER : - Q.NO.1 : DURING THE COURSE OF SURVEY IT IS SEEN THAT YOU FAILED TO PRODUCE BOOKS OF A/C AND ADDRESSES OF SUNDRY C REDITORS AS SHOWN IN YOUR BALANCE SHEET FOR THE A.Y.2006 - 07. WHY THESE ARE NOT AVAILABLE TO YOU? ANS: THE SUNDRY CREDITORS SHOWN ARE ALL LABOURERS AND THEIR DUES YET TO BE PAID. BUT I DO NOT HAVE ALL ADDRESSES (POSTAL) THAT IS WHY I INCREASE MY GROSS PROF IT RATIO 1.3% MORE THAN WHATEVER I HAVE ALREADY SHOWN IN MY PROFIT & LOSS A/C SUBMITTED IN THE A.Y. 2006 - 07. THIS COMES TO RS.7 74 000/ - . Q.NO.2: DURING THE COURSE OF SURVEY PAPER RELATING TO SALE OF SHOPS WERE FOUND BUT YOU DID NOT OFFER FOR TAXATION. AN S : I ADMIT THAT I RECEIVED RS.8 00 000/ - AS RECOVERY OF EXPENDITURE FROM TENANTS. ALTHOUGH THIS PROPERTY IS STILL UNDER CONSTRUCTION THE TOTAL EXPENDITURE FOR 8 SHOPS AMOUNTING TO RS.6 72 000/ - . HENCE I OFFER SURPLUS INCOME OF RS.1 28 000/ - DURING THE A.Y .2006 - 07. I WILL SUBMIT MY REVISED RETURN TOMORROW. ON FURTHER VERIFICATION OF SURVEY FOLDER IT IS FOUND THAT THE APPELLANT HAS DECLARED ASSETS AND INCOME FOR A.Y.2006 - 07 AND 2007 - 08. THE DECLARATION IS ATTACHED WITH THE RETURN OF INCOME FILED IN FORM NO .2D. THE RELEVANT PORTION OF THE DECLARATION IS GIVEN AS UNDER : - ASSESSMENT YEAR 2006 - 07 DECLARATION OF BUSINESS INCOME AMOUNT A ) INCOME FROM BUSINESS 1266635.00 (AS PER RETURN) ADD PROFIT FURTHER TO CONSIDER 774000.00 AS ACCEPTED BY THE MANA GEMENT TOTAL REVISED BUSINESS PROFIT 2040635.00 ADDITIONAL SURPLUS 774000.00 B ) DEPOSIT RECEIPT FROM TENANTS (NOT REFUNDABLE) OF DEPT. HOUSING UNDER CONSTRUCTION 800000.00 LESS COST OF PROJECT OF EIGHT NO.SHOPS RENTED OUT AREA 20 X 20 X 8 X 350 = RS.1120000.00 LESS 60% OF VALUE COMPLETED RS.672000.00 672000.00 EXCESS OF INCOME TAXABLE 128000.00 TAX @ 30% 270600 902000.00 E.C. 2% 5412 INTEREST 55600 331612.00 THESE THE STATEMENTS HAVE BEEN SIGNED BY THE APPELLANT AND THE A.O. IN HIS REMAND REPORT HAS ALSO MADE REFERENCE TO THE ABOVE STATEMENT OF THE APPELLANT. THE APPELLANT HAS NOT ESTABLISHED THAT THE DECLARATION/DISCLOSURE OF INCOME WAS MADE UNDER COERCION THREAT OR UNDUE INFLUENCE. I HAD THE O CCASION TO GO THROUGH THE SURVEY FOLDER AND THE PAPERS CONTAINED IN THE FOLDER. I HAVE ALSO GONE THROUGH THE STATEMENTS AND FIND THAT THE DISCLOSURE WAS MADE VOLUNTARILY BY THE APPELLANT. THE RELEVANT PORTIONS OF THE STATEMENT AND RELEVANT PAPERS CONTAINED IN THE SURVEY FOLDER HAVE BEEN CONFRONTED TO THE APPELLANT IN THE COURSE OF APPEAL HEARING. AS PER SECTION 133A(3)(III) THE INCOME TAX AUTHORITY ITA NOS1555/KOL/2010 & 1648/KOL/2010 SK.SAIFUDDIN A.YR. 2006 - 07 4 CAN RECORD THE STATEMENT OF ANY PERSON IN THE COURSE OF SURVEY WHICH MAY BE USEFUL FOR OR RELEVANT TO ANY PR OCEEDING UNDER THIS ACT. IN THE INSTANT CASE THE A.O. RIGHTLY RECORDED THE STATEMENT OF THE APPELLANT AND HE HAS DECLARED THE UNDISCLOSED INCOME OF RS.15 74 000/ - . SINCE THE APPELLANT HIMSELF HAS DECLARED THE UNDISCLOSED INCOME THE A.O. HAS RIGHTLY ASSES SED IT. THE CASE LAWS CITED BY THE APPELLANT HAVE NO RELEVANCE AND NOT APPLICABLE TO ITS OWN CASE. THE PROVISIONS OF SECTION 133A NOW CONFER ON I.T.AUTHORITY TO RECORD THE STATEMENT OF ANY PERSON IN THE COURSE OF SURVEY U/S 133A. THUS THE ACTION OF THE A.O . IS CONFIRMED. 4. THE LD. COUNSEL FOR THE ASSESSEE MADE SIMILAR ARGUMENTS THAT THERE WAS NO SURRENDER MADE AND THERE WAS NO CORROBORATIVE EVIDENCE AND TO THAT EFFECT HE INVITED OUR ATTENTION TO THE A FFIDAVIT GIVEN BY THE ASSESSEE AS WELL THAT NO DI SCLOSURE WAS MADE. HE RELIED UPON THE DECISIONS OF THE VARIOUS COURTS OF LAW AS MENTIONED IN THE ORDER OF LD.CIT(A) AS REPRODUCED HEREIN ABOVE. 5. THE LD. DR ON THE OTHER HAND ARGUED THAT THE LD.CIT(A) HAS CALLED FOR RECORD WHICH HAS BEEN EXAMINED BY HI M AND IT WAS OBSERVED THAT THE STATEMENT OF THE ASSESSEE WAS RECORDED ON 25.06.2007 WHERE IN QUESTION NOS. 1 AND 2 THE AMOUNT OF RS.7 74 000/ - AND RS.8 00 000/ - AS UNDISCLOSED INCOME. THE RELEVANT QUESTIONS AND ANSWERS ARE AVAILABLE IN THE ORDER OF LD. CI T(A) AT PAGE 16. MOREOVER THE ARGUMENTS OF THE LD. COUNSEL FOR ASSESEE THAT NO DISCLOSURE WAS MADE CANNOT BE HELD AS CORRECT SINCE THE ASSESSEE HIMSELF HAS DECLARED SUCH UNDISCLOSED INCOME IN THE RETURN OF INCOME IN FORM NO.2D WHICH IS REPRODUCED IN THE O RDER OF LD. CIT(A) AT PAGE 17 AS REPRODUCED HEREIN ABOVE. THE SAID DECLARATION IS SIGNED BY THE ASSESSEE HIMSELF AND HE CANNOT DENY THE SAME THAT THE DECLARATION ITSELF HAS NOT BEEN SIGNED BY HIM. THE STATEMENT HAS BEEN SIGNED BY THE ASSESSEE AND THE AO HA S ALSO MADE REFERENCE IN THE REMAND REPORT OF SUCH STATEMENTS. MOREOVER NOTHING HAS BEEN ESTABLISHED THAT THE STATEMENT HAS BEEN TAKEN UNDER COERCION THREAT OR UNDUE INFLUENCE AND NO REPRESENTATION HAS BEEN MADE BEFORE THE INCOME TAX AUTHORITIES IN THIS REGARD. NOW THE ARGUMENTS MADE BEFORE THE LD. CIT(A) OR BEFORE THE ITAT THAT NO DISCLOSURE IS MADE DOES NOT SERVE THE PURPOSE OF THE ASSESSEE AND IT IS VERY MUCH WITHIN THE POWER OF THE INCOME TAX AUTHORITIES TO RECORD THIS STATEMENT WHICH HAS BEEN DONE AND THE ASSESSEE HAS DIS CLOSED SUCH SURRENDER OF DISCLOSED INCOME IN THE RETURN OF INCOME IS NOT UNDER ITA NOS1555/KOL/2010 & 1648/KOL/2010 SK.SAIFUDDIN A.YR. 2006 - 07 5 DISPUTE. IN THE CIRCUMSTANCES THE LD. CIT(A) HAS RIGHTLY CONFIRMED THE ACTION OF THE AO AND ACCORDINGLY PRAYED TO CONFIRM THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE UNDISPUTED FACT IS THAT THE ASSESSEE S STATEMENT HAS BEEN RECORDED ON 25.06.2007 WHERE HE HAS DISCLOSED RS.7 74 000/ - AND RS.8 00 000/ - AS UNDISCLOSED I NCOME AND THE QUESTIONS AND THE ANSWERS ARE PART OF THE RECORD OF THE LD. CIT(A) S ORDER AT PAGE 16. THE LD. COUNSEL OF THE ASSESSEE HAS NOT REBUTTED THE SAID ORDER OF THE LD. CIT(A) AND THE SAID QUESTIONS AND ANSWERS. IT IS ALSO PERTINENT TO MENTION THAT THE STATEMENT HAS NOT BEEN RETRACTED AFTER IT WAS GIVEN ON 25.06.2007 BEFORE ANY OF THE INCOME TAX AUTHORITIES. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HIMSELF HAD ACCEPTED AND DECLARED RS.7 74 000/ - AND RS.8 00 000/ - AS UNDISCLOSED INCOME IN THE RETU RN OF INCOME IN FORM NO.2D. THE SAID STATEMENT OF THE TOTAL INCOME IS PART OF THE LD. CIT(A) S ORDER AT PAGE 17. THE STATEMENTS HAVE BEEN SIGNED BY THE ASSESSEE AND THE AO HAS CONFIRMED IN THE REMAND REPORT AS WELL. THEREFORE IN THE CIRCUMSTANCES NONE OF T HE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE CAN HELP THE ASSESSEE IN THE CIRCUMSTANCES AND THE FACTS OF THE CASE. WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY CONFIRMED THE ACTION OF THE AO. THUS BOTH THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 7. GROUND NO.3 OF THE ASSESSEE S APPEAL IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. ITA NO.1648/KOL/2010 (REVENUE S APPEAL) 8. WE ARE TAKING UP THE APPEAL OF THE REVENUE IN ITA NO.1648/KOL/2010 AS UNDER : - 8.1 . REGARDING GROUND NO.1 THE BRIEF FACTS OF THE CASE AS ARISING FROM AO S ORDER ARE REPRODUCED HEREIN BELOW : - LABOUR CHARGES PAID RS.48695680/ - ON THIS ACCOUNT THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF DEDUCTION OF TAX AT SOURCE AS PER PROVISIONS OF S ECTION 194C. THE ASSESSEE WAS ALLOWED OPPORTUNITY TO MAKE ITA NOS1555/KOL/2010 & 1648/KOL/2010 SK.SAIFUDDIN A.YR. 2006 - 07 6 NECESSARY COMPLIANCE IN THIS REGARD BY LAW OF SERVICE OF THE LETTER NO.DCIT/CIR - 48/KOL/SK.S./08 - 09/1292 DATED 04 - 12 - 2008. IN REPLY THE ASSESSEE EXPLAINED THE POINT VIDE SUBMISSION DATED 11 - 12 - 2008 F ILED ON 12 - 12 - 2008 THE EXPLAINED IS REPRODUCED VERBATIM HEREUNDER : THESE PAYMENTS ARE MEANT FOR TEMPORARY APPOINTED LABOURS ARTISAN & KNITTERS. THESE PERSONS WORK ONLY FOR A FEW DAYS IN A MONTH AT A SPECIFIC RATE AS PER DESIGN AND DRAWINGS. MONTHLY SOMET IMES BY WEEKLY PAYMENTS DEPENDING ON WORK LOAD. EVERY WEEK WORK IS ALLOTTED ON THE WORKSHEET DEPENDING ON AVAILABILITY OF WORK. WE CANNOT CREATE ANY MONTHLY TERMED PAYMENT AS THERE IS NO SURETY OF BUSINESS AS WE ARE IN A TYPE OF MARKET CRAZED FASHION BUSIN ESS. PAYMENTS ARE MADE WITHDRAWING THE CHEQUE OF THE SUPERVISOR WORKER AND PAYMENTS ARE MADE ACCORDINGLY. THE INDIVIDUAL PAYMENTS ARE ALWAYS BELOW THE BASIC EXEMPTION LIMIT. THE EXPLANATION AS REPRODUCED ABOVE IS GONE THROUGH AND CONSIDERED IN THE LIGHT OF THE PROVISIONS OF SECTION 194C. HOWEVER VIDE FURTHER SUBMISSION DATED 30 - 12 - 2008 IT IS CLARIFIED THAT THE DETAIL PAY SLIPS ARE MAINTAINED FOR THE INDIVIDUAL WORKER WHO ARE PAID THROUGH THE RECRUIT AGENT/SUPERVISOR. THE ASSESSEE IS DIRECTLY ACCOUNTABLE TO THE INDIVIDUAL WORKER & PAY THEIR DUES AGAINST THE INDIVIDUAL RECEIPT VOUCHER ALREADY IN THE CUSTODY OF THE ASSESSEE. THE INDIVIDUAL PAYMENT TO THE WORKER IS WELL BELOW THE BASIC EXEMPTION LIMIT THUS ASSESSEE IS NOT ACCOUNTABLE U/S 194C AS EXPLAINED BY THE ASSESSEE. PARTICULARS LABOUR CHARGES PAID ABDUR RAJJAQUE MOLLA 5 26 000 ABHIJIT MAL 5 29 000 AIPE SARDAR 4 07 800 AKTHAR SK 2 37 500 ALOY KHANRAH 020893 33 28 500 AMAR BENARJEE 1 10 000 ARAF HALDAR 3 36 000 ARUN PAL 010892 28 77 700 ASHIF SARDAR 010957 9 87 300 ASHIK RAHAMAN MALLICK 4 35 200 ALAUDDIN MOLLAH 2 46 100 AZIM MALLICK 2 80 300 BANAR MALLIK 6 26 600 BHASKAR PANDIT 2 01 000 BIJAY SAHA 2 56 000 BIPLOB MANNA 69 000 DILIP DAS 57 800 FARQUE MOLLA 4 93 800 FIROJUL KAZI 2 05 200 GOLAM MORTOJA 1 13 500 HABIB ALI MIDDYA ( 010657) 10 70 700 JABHED ALAM 4 30 100 JAYANTA DOLUI 6 10 500 JULFICAR LASKAR 3 03 500 JULFIKAR SEPAY 1 27 900 KADARIA JARIWORKS 2 86 600 KORIM MOLLAH 2 83 400 ITA NOS1555/KOL/2010 & 1648/KOL/2010 SK.SAIFUDDIN A.YR. 2006 - 07 7 MAHBUB JAMADAR 13 10 300 MAIDUL (ALAMGIR)KOLORAH 4 53 500 MANOWAR ALI 1 35 300 MOHINODDIN LASKAR 1 33 000 MOJASSAR MONDAL 3 17 000 JONIRUL MALLICK 1 21 200 MONTU MALLICK 98 100 MORSELIM MALLICK 7 54 700 MUSTAKEN MALLICK 72 100 NAZIMUDDI N MULLICK 6 32 500 NIRMAL KUMAR NATH (010457) 15 70 000 NOOR ISLAM KHAN 1 34 600 PALLU PARUI 3 76 500 PRASANJIT PAUL 3 87 900 RABINDRA NATH BANK (010654) 18 65 000 RUPO MONDAL 51 650 SABIR MALLICK 1 33 950 SAFRID SARDAR 16 16 800 SK.AB DUL FARAH 5 26 950 SK.AKTAR ALI 8 46 300 SK.ASGAR ALI 2 90 000 SK.AZIZUL (010656) 7 29 400 SK.BADRODOJA 010974 8 48 800 SK. ESRAIL 60 200 SK.FIROZ 9 61 000 SK.JAIRUL 2 55 400 SK.KHAIRUL 4 26 600 SK.LALBABU (GORA) 5 23 100 SK.MA IDUL (NATIBPUR) 1 18 850 SK.MANNAN 16 93 300 SK.MASHIUR RAHMAN 6 74 050 SK.MD.RAKIBUDDIN (010929) 6 46 400 SK.MOHABBAT 1 31 000 SK.MONIRUL (010950) 20 81 700 SK.MONTU 1 69 080 SK.MUJIBAR RAHMAN 2 60 000 SK.MUSARAF 1 30 400 SK.RAFIQUL R AHMAN 1 75 000 SK.RAFIQUE ALI 2 86 700 SK.RAKIB 2 53 000 SK.RAMJAN 5 31 300 SK.SAHENSA 1 99 500 SK.SAIFUDDIN (010973) 4 07 450 SK.SARFARAJ ALI 2 55 500 SK.SARTAJ 2 82 000 SK.SHABUDDIN 3 04 000 SK.SIRAJUL 1 04 500 SK.SOFI ALAM 6 75 800 SK.SORIFUL 4 45 000 SK.SURABUDDIN 010343 21 03 900 ITA NOS1555/KOL/2010 & 1648/KOL/2010 SK.SAIFUDDIN A.YR. 2006 - 07 8 SOMIR PAL 88 850 SONALAM PAL (010653) 23 60 200 SRIMANTA DAS 5 95 200 SUFAL MALLICK 2 01 000 SUKANTA DAS 5 22 700 SURAJIT MAL 2 61 350 TAPAN MAL 4 47 400 TAUFICK MALLIC K 7 11 400 TRINJIT CHAKRABORTY 4 10 300 48492180/ - BANK STATEMENTS BOOKS OF ACCOUNTS AND LEDGER COPIES OF THE AFORESAID JOB WORKERS ARE EXAMINED. IT MAY BE INFERRED ON SUCH EXAMINATION THAT THE PAYMENTS ARE MADE TO THE SAID JOB WORKERS DIRECTLY FOR GETTING THE JOB DONE BY THEM THROUGH ENGAGEMENT OF THE ARTISANS KNITTERS AND LABOURERS OF LIKE NATURE SKILLED IN EMBROIDERY WORKS. VIDE. FURTHER SUBMISSION OF THE ASSESSEE DATED 30 - 12 - 2008 IT IS FURTHER EXPLAINED THAT THE PAYMENT TO THE INDIVIDUAL WORKER ARE MADE THROUGH SUPERVISORS. THE INHABITED AREA OF THE WORKERS ARE MUCH AWAY FROM THE MAIN CITY DHULAGARH AND THAT TIME DURING 2005 - 06 IT WAS UNDER MAKING. FURTHER VILLAGES ARE QUITE IN A REMOTE PLACES AND CONVEYANCES WERE DIFFICULT TO ARRANGE FOR TO AND FRO JOURNEY. VILLAGE ARE SAFE AND THE PAYMENT MADE DIRECTLY TO THE VILLAGE WORKERS WHICH INCLUDE YOUNG LADIES HOUSE WIVES AND FARMERS WHO ARE OUR MAIN WORK FORCE AND THEY ARE HABITUATED TO GET THEIR SALARIES SAFE AT HOME. IT IS OBVIOUS F ROM THE EXPLANATION ADDUCED VIDE SUBMISSION DATED 11.12.2008 NO REASONABLE GROUND COULD BE ESTABLISHED AGAINST THE PROPOSED DISALLOWANCE U/S 40(A)(IA). IT IS ALSO GATHERED THAT THE GROUND LEVEL LABOURERS WERE NOT SUBJECT TO PROFESSIONAL TAX ESI PF ETC. T HERE WERE NO EMPLOYER EMPLOYEE RELATIONSHIP WITH THE ASSESSEE AND THE LABOURERS. THE ASSESSEE SIMPLY GOT THE WORK DONE BY SKILLED LABOURERS AND THE PAYMENT IS ASCERTAINED ON THE BASIS OF QUALITY AND QUANTITY OF THE WORK DONE BY THEM. THE ASSESSEE SUBMITTED DA TED 30 - 12 - 2008 THE CLARIFICATION WHICH MENTIONED THAT THE WORKERS WERE NOT REGULAR. THE ZARI WORK ARE VERY SEASONAL AND WORK FORCE ARE EMPLOYED FOR A FEW MONTHS OR DAYS IN A YEAR. THUS P.F. AND OTHER OBLIGATIONS WERE NOT INTRODUCED OR NOT CONSIDERED PRA CTICAL. WITH THIS OBSERVATION A SUM OF RS.48492180/ - IS DISALLOWED U/S 40(A)(IA). 8.2. BEFORE THE L D.CIT(A) THE ASSESSEE MADE THE SUBMISSIONS ON DIFFERENT OCCASIONS WHICH WERE SENT TO THE AO FOR REPORT AND REPORT WAS SUBMITTED TO THE LD.CIT(A). THE LD. CIT( A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE AND THE REPORT OF THE AO DELETE D THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT VIDE PAGES 3 TO 6 OF HIS ORDER. THE LD.AR RE LIED UPON THE ORDER OF THE AO AND THE DECISION OF THE KOLKATA BENCH IN THE CAS E DCIT VS M/S. S.S.CONSTRUCTION IN ITA.NO.1199/KOL2010 AND ALSO THE DECISION OF KARNATAKA HIGH COURT IN THE CASE OF SMT.J.RANA. 9. THE LD.DR ON THE OTHER HAND ARGUED THAT THE PAYMENTS MADE ARE COVERED U/S 194C OF THE ACT AND IT IS NOT NECESSARY THAT TH E CONTRACT SHOULD BE ORAL CONTRACT EVEN THE ORAL CONTRACTS ARE THE CONTRACTS COVERED UNDER THE PAYMENTS TO THE CONTRACTORS U/S ITA NOS1555/KOL/2010 & 1648/KOL/2010 SK.SAIFUDDIN A.YR. 2006 - 07 9 194C OF THE ACT AND THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE WHICH HAS NOT BEEN DEDUCTED U/S 40(A)(IA) OF THE ACT ARE A PPLICABLE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE DISALLOWANCE MADE BY THE AO. ACCORDINGLY THE LD. DR PRAYED TO CANCEL THE ORDER OF THE LD. CIT(A) AND RESTORE THE ORDER OF AO. 10. WE HA VE HEARD THE RIVAL CONTENTIONS AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. AS PER SECTION 194C OF THE ACT IT IS RELEVANT FOR A.YR.2006 - 07 THAT ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREINAFTER IN THIS SECTION REFERRED TO A S THE CONTRACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND VARIOUS PERSONS REFERRED TO IN THE SECTION SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF TH E CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF . NOW WE HAVE TO PRODUCE THE FACTS OF THE CASE WHICH IN FACT ARE PAYMENTS MADE TO THE SUPERVISOR BY THE ASSESSEE BY WITHDRAWING MONEY FROM THE BANK AT PAGE 2 OF THE AO S ORDER. THE EXPLANATION OF THE ASSESSEE IS THAT PAYMENTS ARE MADE WITHDRAWING THE CHEQUE OF THE SUPERVISOR WORKER AND PAYMENTS ARE MADE ACCORDINGLY. THE PAYMENTS SO MADE AMOUNTING TO RS.4 84 92 180/ - ALL ARE RANGING ALMOST RS.1 00 000/ - AND ABOVE AND EVEN TO SOME OF THE SUPERVISORS MORE THAN RS .20 000/ - I.E. ARUN PAL RS.28 77 700/ - TO SK.MONIRUL RS.20 81 700/ - AND TO SK.SURABUDDIN RS.21 03 900/ - TO SONATAM PAL RS.23 60 200/ - AND TO ALOY KHANRAN RS.33 28 500/ - . PAYING SUCH AN AMOUNT TO THE SUPERVISOR IS BEING CLEARED BY THE ASSESSEE THAT THE SAID PAYMENT IS NOT COVERED U/S 194C OF THE ACT AND THE PLEADING TAKEN BY THE ASSESSEE BEFORE BOTH THE AUTHORITIES BELOW IS THAT INDIVIDUAL PAYMENT TO THE WORKERS PAID BY THE SUPERVISORS IS BELOW BASIC EXEMPTION LIMIT. NO SUPERVISOR TO WHOM THE PAYMENT IS MADE HAS SUBMITTED A CERTIFICATE U/S 197A OF THE ACT THAT SUBMITTING OF THE ASSESSEE S CLAIM THAT INDIVIDUAL PAYMENTS MADE BY THE SUPERVISOR TO THE VARIOUS LABOURS AND HAS CLAIMED THAT THEY ARE DIRECT CONTROL OF THE ASSESSEE. BUT NO EVIDENCE TO THAT HAS BEEN PLACED ON RECORD BEFORE ANY OF THE AUTHORITIES BELOW OR BEFORE US. IN THE ABSENCE OF ANY SUCH ESTABLISHMENT OF DIRECT EMPLOYEE EMPLOYER RELATIONSHIP BETWEEN THE ASSESSEE AND THE WORKERS THE ASSESSEE CANNOT CLAIM THAT THE ASSESSEE IS HAVING DIRECT RELA TIONSHIP WITH THE WORKERS. THE LD. ITA NOS1555/KOL/2010 & 1648/KOL/2010 SK.SAIFUDDIN A.YR. 2006 - 07 10 COUNSEL OF THE ASSESSE HAS ARGUED THAT THE PAYMENT HAS BEEN MADE TO 89 PERSONS OR SO FOR ONWARD PAYMENT TO 40 WORKERS. THEN THE QUESTION ARISE WHAT STOPS THE ASSESSEE TO MAKE THE PAYMENT DIRECTLY TO 40 WORKERS IF THEY ARE DIRECTLY UNDER THE CONTROL OF THE ASSESSEE. THEREFORE PLEADINGS MADE BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND ALSO BEFORE US IS TO AVOID THE PROVISION OF SECTION 194C OF THE ACT AND THEREFORE THE PAYMENTS MADE TO THE SUPERVISORS DIRECTLY IS COVER ED U/S 194C OF THE ACT AND THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE SINCE THE ASSESSEE IS THE PERSON RESPONSIBLE FOR PAYING THE SUM FOR CARRYING OUT FOR SUPPLY OF LABOUR FOR CARRYING OUT THE WORK IN PURSUANCE OF THE CONTRACT6. THE LD. CIT(A) HAS ACCEPTED THE EXPLANATION OF THE ASSESSEE WITHOUT COMMENTING UPON THE RELATIONSHIP OF THE ASSESSEE AND THAT OF THE SUPERVISORS/SARDARS. SIMPLY MENTIONING THAT THE SUPERVISORS/SARDARS ARE ALSO EMPLOYEES OF THE ASSESSEE DOES NOT MAKE THE ASSESSEE FREE OF VIOL ATIONS MADE U/S 194C OF THE ACT. SARDARS OR SUPERVISORS ARE THE EMPLOYEES OF THE ASSESSEE AND THEY ARE CONTRACTORS OF THE ASSESSEE WHICH HAS BEEN DONE IN THE PRESENT CASE. THE LD. CIT(A) HAS BEEN SILENT ON THIS ISSUE AND HAS NOT COMMENTED UPON AND HAS ACCE PTED THE EXPLANATION OF THE ASSESSE AND DELETED THE DISALLOWANCE WHICH IS NOT CORRECT AND NOT IN THE RIGHT PERSPECTIVE AND NOT IN ACCORDANCE WITH LAW. OUR VIEW FINDS SUPPORT FROM THE DECISION OF ITAT KOLKATA BENCH IN ITA NO.199/KOL/2010 FOR A.YR.2006 - 07 IN THE CASE OF S.S.CONSTRUCTION PVT. LTD. DATED 17.02.2012 AND THE DECISION IN THE CASE OF ITO VS DYE ENGINEERING WORKS IN ITA NO. 2012 FOR A.YRS/.2006 - 07 ON SIMILAR FACTS. UNDER THE CIRCUMSTANCES AND THE FACTS OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE DISALLOWANCE. THE LD.COUNSEL OF THE ASSESSEE HAS RELIED UPON THE DECISIONS OF THE VARIOUS COUR TS OF LAW WHERE HE HAS SUBMITTED THE GIST OF THE JUDGEMENTS BUT HOW THE SAID JUDGEMENTS ARE APPLICABLE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE HAS NOT BEEN BROUGHT ON RECORD. THEREFORE THE GIST OF THE JUDGEMENTS HAVE BEEN PERUSED AND THE SAME CANNOT BE MADE APPLICABLE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. SINCE IN THE PRESENT CASE THERE IS A CONTRACT I.E. ORAL CONTRACT BE TWEEN THE ASSESSEE AND THE SUPERVISORS/SARDARS AND THE ASSESSEE IS REQUIRED TO DEDUCT TAX AT SOURCE U/S 194C OF THE ACT AND THE ASSESSEE HAS VIOLATED THE PROVISION OF THE ACT. THEREFORE PROVISIONS U/S 40(A)(IA) OF THE ACT ARE CLEARLY APPLICABLE AND EXPENSE S AND CLAIM IS DISALLOWABLE AND ACCORDINGLY THE ORDER OF THE ITA NOS1555/KOL/2010 & 1648/KOL/2010 SK.SAIFUDDIN A.YR. 2006 - 07 11 LD. CIT(A) IS REVERSED AND THAT OF AO S ORDER IS RESTORED. ACCORDINGLY GROUND NO.1 OF THE REVENUE S APPEAL IS ALLOWED. 11. AS REGARDS GROUND NO.2 THE BRIEF FACTS OF THE CASE ARE THAT AO FOUND THAT THE ASSESSEE H AS MADE PAYMENTS IN EXCESS OF RS.20 000/ - TO THE LABOURERS VIOLATING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. THESE ARE PAYMENTS WHICH HAVE BEEN MADE TO THE SUPERVISORS AND THE AO HAS MADE THE DISALLOWANCE U/S 40A(3) OF THE ACT @20 %. THE DISALLOWANCE MADE IS RS.96 98 436/ - . THE LD. CIT(A) AT PAGES 12 AND 13 DELETED THE SAME FOR THE REASONS THAT NO SINGLE PAYMENT TO THE WORKERS EXCESS RS.20 000/ - IN CASH. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULLY PERUSED THE MATERIALS A VAILABLE ON RECORD. AS PER THE DECISION IN GROUND NO.1 OF THE REVENUE S APPEAL THE PAYMENTS VERIFIABLE EXCEEDS RS.20 000/ - AND THE PROVISION OF SECTION 194C OF THE ACT HAS BEEN VIOLATED BY THE ASSESSEE AND THEREFORE ALL TOTAL EXPENDITURE CLAIMED BY THE AS SESSEE AMOUNTING TO RS.4 84 92 180/ - HAS BEEN DISALLOWED. ONCE THE TOTAL DISALLOWANCE HAS BEEN CONFIRMED BY US IN GROUND NO.1 OF THE REVENUE S APPEAL HEREIN ABOVE THERE CANNOT BE ANY DOUBLE ADDITION U/S 40A(3) OF THE ACT. THEREFORE THE SAME IS REQUIRED TO BE DELETED. WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS DELETED THE ADDITION MAY BE ON OTHER GROUNDS WHICH IS NOT ACCEPTABLE BY US IN CASE NO DOUBLE ADDITION CAN BE MADE. ACCORDINGLY GROUND NO.2 OF THE REVENUE S APPEAL IS DISMISSED. 13. I N THE RESULT THE APPEAL OF THE ASSESSEE IS DISMISSED AND THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDE R PRONOUNCED IN THE COURT ON 2 9.04.2015. SD/ - SD/ - [ MAHAVIR SINGH ] [ B.P.JAIN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 29.04.2015. R.G.(.P.S.) ITA NOS1555/KOL/2010 & 1648/KOL/2010 SK.SAIFUDDIN A.YR. 2006 - 07 12 COPY OF THE ORDER FORWARDED TO: 1 . SK.SAIFUDDIN NATIBPU KOLORAH DOMJUR HOWRAH - 711411. 2 D.C.I.T. CIRCLE - 48 KOLKATA 3 . CIT(A) - XXX KOLKATA 4. CIT - KOLKATA. 5. CIT - DR KOLKATA BENCHES KOLKATA TRUE COPY BY ORDER DEPUTY /ASST. REGISTRAR ITAT KOLKATA BENCHES