Kirti Construction Co., Baroda v. The Dy.CIT.,Circle-2(1),, Baroda

ITA 1669/AHD/2014 | 2009-2010
Pronouncement Date: 26-11-2019 | Result: Partly Allowed

Our System has flagged this appeal as eligible for Vivad Se Vishwas Scheme. If you are party to this appeal, get on a Free Consultation Call with our team of Legal Experts who shall guide you as to how you can save huge Interest and Penalty in VSV Scheme.


Apply Now
        
Try VSV Calculator

Appeal Details

RSA Number 166920514 RSA 2014
Assessee PAN AAHFK5163H
Bench Ahmedabad
Appeal Number ITA 1669/AHD/2014
Duration Of Justice 5 year(s) 5 month(s) 29 day(s)
Appellant Kirti Construction Co., Baroda
Respondent The Dy.CIT.,Circle-2(1),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 26-11-2019
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 26-11-2019
Date Of Final Hearing 04-09-2019
Next Hearing Date 04-09-2019
Last Hearing Date 04-09-2019
First Hearing Date 11-07-2019
Assessment Year 2009-2010
Appeal Filed On 28-05-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I AMARJIT SINGH ACCOUNTANT MEMBER AND MS. MADHUMITA ROY JUDICIAL MEMBER KIR T I CONSTRUCTION CO 9 D.J. PATEL PARK NIZAMPURA - 390002 BARODA PAN: AAHFK5163H (APPELLANT) VS THE DCIT CIRCLE - 2 ( 1 ) BARODA (RESPONDENT) REVENUE BY : S H RI L.P. JAIN SR. D . R. ASSESSEE BY: SHRI MEHUL K. PATEL A.R. DATE OF HEARING : 04 - 09 - 2 019 DATE OF PRONOUNCEMENT : 26 - 11 - 2 019 / ORDER P ER : AMARJIT SINGH ACCOUNTANT MEMBER : - THESE TWO APPEALS FILED BY ASSESSEE FOR A.Y. 2007 - 08 & 2009 - 10 ARI SE FROM ORDER OF THE CIT(A) - II BARODA DATED 25 - 02 - 2 014 IN PROCEEDINGS UNDER SECTION 143(3) AND 271(1)(C) OF THE INCOME TAX ACT 1961; IN SHORT THE ACT . I T A NO S . 1668 & 1669 / A HD/20 14 A SS ESSMENT YEAR 2007 - 08 & 2009 - 10 I.T.A NO S . 1668 & 1669 /AHD/20 14 A.Y. 2007 - 08 & 2009 - 10 PAGE NO KIRTI CONSTRUCTION CO. VS. DCIT 2 ITA NO. 1669/AHD/2014 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION U/S 68 OF THE ACT AMOUNTING TO RS. 20 000/ - 2. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING ADDITION U/S 40(A)(IA) OF THE ACT AMOUNTING TO RS.15 12 511/ - . 3. THE LEARNED CIT (APPEALS) ERRED IN ENHANCING THE ADDITION MADE U/S 40(A)(IA) OF THE ACT AMOUNTING TO RS.14 21 250/ - TO RS.15 12 511/ - . 4. THE LEARNED CIT (APPEALS) ERRED IN NOT ALLOWING THE EXCESS TDS PAYMENTS MADE DURING THE PRECEDING YEAR TOWARDS THE TDS LIABILITY FOR THE YEAR UNDER REFERENCE. 3. RETURN OF INCOME DECLARING INCOME OF RS. 1 00 610/ - WAS FILED ON 30 TH SEP 2009. THE CASE WAS SUBJECT TO SCRUTINY ASSESSMENT AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 21 ST SEP 2010. THE ASSESSM ENT U/S. 143(3) OF THE ACT WAS FINALIZED ON 29 TH DECEMBER 2011 AND TOTAL INCOME WAS ASSESSE D AT R S. 24 80 810/ - AFTER MAKING VARIOUS ADDITIONS BY THE ASSESSING OFFICER. RELEVANT FACTS PERTAINING TO THE ADDITIONS MADE BY THE ASSESSING OFFICER AND SUSTAINE D BY THE LD. CIT(A) CONTESTED IN THIS APPEAL ARE DISCUSSED WHILE ADJUDICATING THE GROUNDS OF APPEAL AS FOLLOWS: - GROUND NO. 1 ( CONFIRMING OF ADDITION U/S. 68 OF THE ACT TO THE AMOUNT OF RS. 20 000/ - ) 4. DURING ASSESSMENT ON VERIFICATION OF THE CAPITAL AC COUNT OF THE PARTNERS THE ASSESSING OFF ICER NOTICED THAT AN AMOUNT OF R S. 35 000/ - AND 45 000/ - WAS SHOWN AS FRESH CAPITAL BY THE ASSE SSEE AS CONTRIBUTED BY SHRI KIR T I M. PATEL AND M. S. HETAL PATEL. IT IS ALSO NOTICED THAT ASSESSEE HAS SHOWN UNS ECURED L OAN OF RS. 20 000/ - . T HE ASSESSEE WAS ASKED TO FURNISH DETAIL OF THE NEW CAPITAL INTRODUCED BY THE PARTNER AND ALSO THE CONFIRMATION ADDRESS IDENTIFICATION BANK PAN ETC. TO PROVE CREDITWORTHINESS OF THE I.T.A NO S . 1668 & 1669 /AHD/20 14 A.Y. 2007 - 08 & 2009 - 10 PAGE NO KIRTI CONSTRUCTION CO. VS. DCIT 3 DEPOSITORS. THE ASSESSEE HAS FAILED TO FURNISH THE DETAIL S REQUIRED BY THE ASSESSING OFFICER T HEREFORE THE ASSESSING OFFICER HAS ADDED THE AMOUNT OF RS. 1 LAC U/S. 68 AS UNDISCLOSED INCOME TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(A) HAS DELETED THE ADDITION OF RS. 80 000/ - PERTAINING TO TH E CAPITAL AMOUNT CONTRIBUTED BY THE PARTNER STATING THAT IF ANY ADDITION IS TO BE MADE THE SAME HAD TO BE MADE IN THE HANDS OF THE PARTNER AND NOT IN THE HANDS OF THE PARTNERSHIP FIRM. H OWEVER THE LD. CIT(A) HAS SUSTAINED THE REMAINING ADDITION OF RS. 2 0 000/ - IN RESPECT OF UNSECURED LOAN OBTAINED FROM MR. DEEPAK J. PATEL ON THE GROUND THAT THE ASSESSEE HAS FAILED TO FURNISH THE SUPPORTING EVIDENCES I.E. BANK STATEMENT AND CONFIRMATION LETTER FROM THE LENDER. 5. HEARD THE RIVAL CONTENTIONS ON THIS ISSU E AND PERUSAL THE MATERIAL ON RECORD AND PAPE R BOOK FILED BY THE LD. COUNSEL. D URING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US IT IS NOTICED THAT ASSESSEE HAS NOT FURNISHED THE PRIMARY SUPPORTING EVIDENCES I.E. COPY OF BANK STATEMENT AND CONFIRMATIO N LETTER TO PROVE THE GENUINEN ESS OF THE LOAN TRANSACTION OF R S. 20 000/ - THE REFORE WE DO NOT FIND ANY ERROR IN THE DECISION OF LD. CIT(A) IN SUSTAINING THE SAID ADDITION SINCE THE ASSESSEE HAS FAILED TO DEMONSTRATE FROM RELEVANT SUPPORTING EVIDENCES ABO UT THE GENUINENESS OF THE IMPUGNED TRANSACTION. ACCORDINGLY THIS GROUND OF THE APPEAL OF THE ASSESSEE IS DISMISSED. GROUND NOS. 2 & 3 (CONFIRMING ADDITION OF RS. 15 12 511/ - U/S. 40(A)(IA) OF THE ACT I.T.A NO S . 1668 & 1669 /AHD/20 14 A.Y. 2007 - 08 & 2009 - 10 PAGE NO KIRTI CONSTRUCTION CO. VS. DCIT 4 6. DURING ASSES SMENT THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED VARIOUS EXPENSES ON WHICH TAX WAS NOT DEDUCTED. THE ASSESSING OFFICER HAS REPORTED THE DETAIL S OF SUCH EXPENSES AT PAGE NO. 3 OF THE ASSESSMENT ORDER AS UNDER: - SR. NO. EXPENSES CLAIMED UNDER THE HEAD A TOTAL EXPENSES CLAI MED RS. - EXPENSES LIABLE FOR TDS - RS. EXPENSES NOT LIABLE FOR TDS - RS. - 1 CARTING EXP. 9 20 647 8 31 947' 88 700 2 TRACTOR CHARGES 1 84 896 1 36 750 48 146 3 SUB CONTRACT PAYMENT 10 96 403 10 96 403 NIL 4 LABOUR EXP. T 6 95 068 31 485 28 97 014 27 28 683 1 68 331 AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE THE ASSESSING OFFICER HAS CONCLUDED THAT THE AMOUNT ON WHICH THE ASSESSEE HAS DEDUCTED TAX COMES TO RS. 13 27 433/ - THEREFORE THE BALANCE AMOUNT OF RS. 14 21 250/ - ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS PER THE PROVISION OF SECTION 40(A)(IA) OF THE ACT. 7. ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ENHANCED THE DISALLOWANCE U/S. 40(A)(IA) OF THE AC T TO THE AMOUNT OF RS. 15 12 511/ - IN PLACE OF RS. 14 21 250/ - ON THE BASIS OF REMAND REPORT SUBMITTED BY T H E ASSESSING OFFICER. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE U S THE LD. COUNSEL HAS FILED PAPER BOOK COMPRISING DETAIL AND COPIES OF DOC UMENT S FURNISHED BEFORE THE ASSESSING OFFICER AND CIT(A) I.T.A NO S . 1668 & 1669 /AHD/20 14 A.Y. 2007 - 08 & 2009 - 10 PAGE NO KIRTI CONSTRUCTION CO. VS. DCIT 5 AT THE TIME OF ASSESSMENT AND APPELLATE PROCEEDINGS. THE LD. COUNSEL HAS SUBMITTED THAT DISALLOWANCE MADE U/S. 40(A)(IA) OF THE ACT WAS NOT CORRECT S INCE THE ASSESSING OFFICER HAS NOT CONSIDERED THE DETAIL OF DEDUCTION OF TAX PLACED IN THE PAPER BOOK DURING THE COURSE OF ASSES SMENT PROCEEDINGS. T HE LD. COUNSEL HAS PLEADED THAT DISALLOWANCE MADE U/S. 40(A)(IA) IS NOT PROPER AND THE SAME IS REQUIRED TO BE DELETED. ON THE OTHER HAND LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LOWER AUTHORITIES. 8. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD AND PAPE R BOOK FURNISHED BY THE LD. COUNSEL D URING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US. DURING THE COURSE OF ASSE SSMENT THE ASSESSING OFFIC ER HAS DISALLOWED AN AMOUNT OF R S. 14 21 250/ - U/S. 40(A)(IA) OF THE ACT FOR NOT DEDUCTING TAX ON VA RIOUS EXPENSES AS CITED ABOVE IN THIS ORDER. THE LD. COUNSEL HAS REFERRED PAGES NO. 158 TO 164 PLACED IN THE PAPER BOOK PERTAINI NG TO THE BREAK UP OF VARIOUS EXPENSES ON WHICH ISSUE OF DEDUCTION OF TDS WAS RAISED BY THE ASSESSING OFFICER. ON PERUSAL OF THESE PAGES IT IS NOTICED THAT THE ASSESSEE HAS PRESENTED THE MONTHWISE BREAK UP OF VARIOUS EXPENSES ALONG WITH NAME OF THE PA R TY AND THE AMOUNT OF EXPENSES. IT IS ALSO CLAIMED THAT SEVERAL PAYMENTS OF EXPENS ES WERE BELOW THE TAXABLE LIMIT WHICH WERE NOT CONSIDERED BY T H E ASSESSING OFFICER . WE OBSERVE THAT AS PER REMAND REPORT ELABORATED AT PARA 5.2.2 OF THE ORDER OF T HE LD. CIT(A) THE ASSESSING OFFICER HAS REPORTED EXPENDITURE OF RS. 13 84 503/ - ON WHICH THE ASSESSEE HAS DEDUCTED TAX OUT OF TO TAL EXPENSES OF RS. 28 97 104/ - H OWEVER THE ASSESSING OFFICER HAS NOT VERIFIED THE CLAIM OF THE ASSESSEE THAT OUT OF REMAINING EXPENSES O F RS. 15 12 511/ - THERE WERE SEVERAL PAYMENTS WHICH WERE BELOW THE TAXABLE LIMIT. C ONSIDERING THE I.T.A NO S . 1668 & 1669 /AHD/20 14 A.Y. 2007 - 08 & 2009 - 10 PAGE NO KIRTI CONSTRUCTION CO. VS. DCIT 6 MATERIAL ON RECORD WE OBSERVED THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE DETAIL FILED BY THE ASSESSEE OBJECTIVELY BEFORE DECIDING THIS ISSUE OF NON - D EDUCTION OF TAX ON THE VARIOUS EXPENSES INCURRED BY THE ASSESSEE THEREFORE WE ARE OF THE VIEW THAT IT WILL BE APPROPRIATE TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING DE - NOVO AFTER VERIFICATION AND EXAMINATION OF THE DETAIL REF ERRED BY THE LD. COUNSEL . ACCORDINGLY THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER AS DIRECTED ABOVE TO BE DECIDED AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. T HIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATIST ICAL PURPOSES . 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE S . ITA NO. 1668 /AHD/2014 10 . THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE APPELLANT FIRM COULD NOT EXPLAIN THE REASON FOR NOT PRODUCING THE BOOKS OF ACCOUNTS. 2. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE ESTIMATION OF REASSESSED NET PROFIT RATE CANNOT ESCAPED THE RIGOURS OF PENALTY. 3. THE LEARNED CIT (APPEALS) ERRED IN CONF IRMING THAT PENALTY WAS LEVIABLE IN RESPECT OF ADDITION MADE U/S 68 OF THE ACT. 4. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING PENALTY LEVIED U/S 271 (L)(C) ON THE FOLLOWING ADDITIONS NAMELY: A) ADDITION ON ACCOUNT OF ESTIMATION OF NET PROFIT B) ADDITION U/S 68 11 . SINCE THE MAJOR PART OF QUANTUM ADDITION ON WHICH THE ASSESSING OFFICER LEVIED PENALTY U/S. 271(1)(C) HAS BEEN SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH THE RE FORE AT THIS STAGE THE PENALTY LEVI ED HAS BECOME INFRUCTUOUS . H OWEVER THE ASSESSING OFFICER WILL BE AT I.T.A NO S . 1668 & 1669 /AHD/20 14 A.Y. 2007 - 08 & 2009 - 10 PAGE NO KIRTI CONSTRUCTION CO. VS. DCIT 7 L IBERTY TO CONSIDER THE ISSUE OF LEVYING PENALTY U/S. 271(1)(C) OF THE ACT ON THE OUTCOME OF THE SET ASIDE PROCEEDINGS . 12 . IN THE COMBINED RESULT APPEAL ITA 1668/AHD/2014 IS ALLOWE D FOR STATISTICAL PURPOSES AND APPEAL ITA 1669/AHD/2014 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OURT ON 26 - 11 - 201 9 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 26 /11 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER/ /