The ITO, Ward-8(4),, Surat v. Shri Vikram Chhanalal Shah, Surat

ITA 1968/AHD/2009 | 2006-2007
Pronouncement Date: 15-07-2011 | Result: Dismissed

Appeal Details

RSA Number 196820514 RSA 2009
Bench Ahmedabad
Appeal Number ITA 1968/AHD/2009
Duration Of Justice 2 year(s) 29 day(s)
Appellant The ITO, Ward-8(4),, Surat
Respondent Shri Vikram Chhanalal Shah, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 15-07-2011
Date Of Final Hearing 12-07-2011
Next Hearing Date 12-07-2011
Assessment Year 2006-2007
Appeal Filed On 16-06-2009
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI D. K. TYAGI JM AND A. MOHAN ALANKAMO NY AM INCOME-TAX OFFICER WARD 8(4) SURAT. VS. SHRI VIKRAM CHHANALAL SHAH 404 CHANDANBALA APARTMENT BRAHMAN FALIA BEHIND BUS STATION KATARGAM SURAT. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI JASBIR S. CHOUHAN SR.D.R. RESPONDENT BY:- NONE O R D E R PER A. MOHAN ALANKAMONY ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE REVENUE RAISING FOL LOWING GROUND :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS .26 00 000/- MADE BY THE AO ON ACCOUNT OF UNPAID LABOUR CHARGES U/S 69C OF THE I.T. ACT WITHOUT APPRECIATING FACTS OF THE CASE AND WITHOUT QUOTING ANY SPECIFIC REASONS BEHIND THIS RELIEF. 2. THE APPEAL HAS BEEN FILED LATE BY 14 DAYS. AFTER HEARING THE LD. DR WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARI NG. ITA NO.1968/AHD/2009 ASST. YEAR 2006-07 ITA NO.1968/AHD/2009 ASST. YEAR 2006-07 2 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILE D RETURN OF INCOME ON 5.7.2006 DECLARING TOTAL INCOME OF RS.85 140/-. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DIAMOND LABOUR JOB WORK. THE ASS ESSMENT PROCEEDINGS WERE FINALIZED U/S 143(3) ON 31.12.2008 WITH A TOTA L INCOME OF RS.81 26 013/-. WHILE GOING THROUGH THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE THE LD.AO NOTICED THAT VERY HUGE PAYMENTS FOR LABOUR CHARGES WERE PAID BY THE ASSESSEE. DURING THE YEAR UNDER CO NSIDERATION ASSESSEE RECEIVED TOTAL LABOUR CHARGES OF RS.1 56 81 158/- O UT OF WHICH LABOUR CHARGES OF RS.1 53 67 535/- WERE PAID TO THE OUTSID E LABOURERS. THUS ALMOST 98% OF THE LABOUR CHARGES WERE PAID BACK TO THE OUTSIDE LABOURERS. IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTI ONS AO ASKED THE ASSESSEE TO FURNISH THE IDENTITY PROOF OF THE LABOU RERS TO WHOM SUCH A HUGE AMOUNTS WERE PAID AND SHOW CAUSED THE ASSESSEE THAT AS TO WHY THE OUTSTANDING LABOUR EXPENSES SHOULD NOT BE DISALLOWE D U/S 69C OF THE ACT. DURING VERIFICATION OF TRANSACTION IN RESPECT OF LA BOUR CHARGES DEBITED IN THE ACCOUNT OF THE ASSESSEE THE NOTICE U/S 133(6) HAD BEEN ISSUED AND SAME WERE RETURNED BACK REPORTED BY THE POSTAL AUTH ORITY THAT THE FOLLOWING PERSONS WERE NOT AVAILABLE AT THE ADDRESS PROVIDED BY THE ASSESSEE :- (1) VISHAL ENTERPRISES (2) D.G. SHAH (3) RAVINDRA BACHUBHAI (4) MUKESH PRABHUBHAI (5) PANKAJ NATWARLAL ITA NO.1968/AHD/2009 ASST. YEAR 2006-07 3 (6) KALPESH R. DOSHI (7) ASHOK SEVENTILAL (8) B.A. PATEL (9) PRAKASH JERAMBHAI OF AMRELI DIST. 3.1 IN RESPECT OF FOLLOWING 8 PERSONS THE INSPECTO RS WERE DEPUTED TO CONTACT THEM AND SERVE THE SUMMONS AT THE ADDRESS P ROVIDED BY THE ASSESSEE:- (1) VISHAL ENTERPRISES (2) D.G. SHAH (3) RAVINDRA BACHUBHAI (4) MUKESH PRABHUBHAI (5) PANKAJ NATWARLAL (6) KALPESH R. DOSHI (7) ASHOK SEVENTILAL (8) B.A. PATEL THE SUMMONS U/S 131 OF THE ACT WAS ISSUED TO THE AB OVE-NAMED PARTIES TO ATTEND THE OFFICE OF THE AO ON 16 TH DECEMBER 2008. HOWEVER NONE OF THEM ATTENDED BEFORE THE AO. DUE TO THIS NONE OF T HE EXPENDITURE DEBITED/PAID BY THE ASSESSEE IN RESPECT OF LABOUR C HARGES IS PROVED TO BE GENUINE. 3.2 THE REPLY OF THE ASSESSEE IN THIS REGARD WAS FO UND TO BE NON- CONVINCING TO THE AO HENCE HE DISALLOWED THE UNPAID LABOUR CHARGES OF RS.78 89 993/- AND MADE THE ADDITION OF THE SIMILAR AMOUNT U/S 69C OF THE ACT. ITA NO.1968/AHD/2009 ASST. YEAR 2006-07 4 4. IN APPEAL THE CIT(A) VIDE HIS ORDER PARTLY ALLOW ED THE APPEAL OF ASSESSEE BY OBSERVING AS UNDER :- THE FACT OF THE MATTER IS THAT THE APPELLANT HAS R ECEIVED LABOUR CHARGE FOR GETTING THE POLISHING WORK DONE SO SOME EXPENDITURE MUST HAVE SURELY BEEN DONE. BUT THE APPELLANT ON T HE OTHER HAND COULD NOT SUBSTANTIATE THE CLAIMED EXPENDITURE AS M UCH AS NOT A SINGLE LABOUR COULD BE PRODUCED/ATTENDED DURING THE VERIFICATION EXERCISE. OUTSTANDING WAGES LIABILITY IS ALMOST 51% THE TOTAL WAGE EXPENSES WHICH IS UNUSUALLY AND INTRIGUINGLY HIGH. IT WILL BE SAFE TO ASSUME THAT THE BOTH RECEIPT AND PAYMENT OF WAGES W ERE EVENLY STAGGERED OVER THE ENTIRE YEAR AND THUS THE MONTHL Y BILLS COME TO AROUND RS.12 80 627/-. LABOUR IN THE MARKET GETS PA ID ON MONTHLY BASIS. IT WILL BE IN THE INTEREST OF JUSTICE IF THE APPELLANTS MONTHLY CLAIM OF AROUND RS.13 00 000/- AS OUTSTANDING WAGES IS CONSIDERED GENUINE FOR TWO MONTHS DESPITE THE UTTER FAILURE ON THE PART OF THE ASSESSEE TO PROVE ANYTHING IN THIS RESPECT THE ADD ITION OF BALANCE OF RS.78 89 993/- (-) 26 00 000/-) RS.52 89 993/- W ILL REQUIRE CONFIRMATION. THUS THE CIT(A) ALLOWED A RELIEF OF RS.26 00 000/- ON THIS GROUND OF ADDITION AND ORDERED TO RESTRICT THE ADDITION MADE U/S 69C OF THE ACT TO RS.52 89 993/- ONLY. THE DEPARTMENT IS AGGRIEVED AN D HENCE IN APPEAL BEFORE THE TRIBUNAL. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE THOUGH THE NOTICE WAS SERVED ON THE ASSESSEE BY THE TRIBUNAL THROUGH THE REVENUE AND ACKNOWLEDGED BY THE ASSESSEE ON 1/7/2011. THEREFOR E AFTER HEARING THE LD. DR AND GOING THROUGH THE MATERIAL ON RECORD WE PROCEED TO ADJUDICATE THE ISSUE EX-PARTE. ITA NO.1968/AHD/2009 ASST. YEAR 2006-07 5 6. THE LD.CIT(A) IN HIS ORDER HAS ANALYZED T HE ISSUE CORRECTLY WITH THE FINDING THAT THE OUTSTANDING WAGES LIABILITY OF 51% IS VERY HIGH AND UNACCEPTABLE. TO ARRIVE AT A REASONABLE CONCLUSION HE ESTIMATED THE OUTSTANDING LIABILITY TO BE EVEN FOR EVERY MONTH SI NCE MONTHLY WAGE PAYMENT IS AFFECTED AND CONSIDERING THE OUTSTANDIN G BALANCE FOR THE YEAR END TO BE THAT OF TWO MONTHS LIABILITY ARRIVED AT A FIGURE OF RS.26 00 000/- . THUS THE LDCIT(A) GRANTED RELIEF TO THE APPELLANT FOR AN AMOUNT OF RS. 26 00 000/- AND CONFIRMED THE ADDITION OF RS. 52 89 993/-. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION OF T HE LD.CIT(A) AT THIS STAGE AND THEREFORE WE CONFIRM HIS ORDER. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 15/7/11. SD/- SD/- (D. K. TYAGI) (A. MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED : 15/7/11. MAHATA/- ITA NO.1968/AHD/2009 ASST. YEAR 2006-07 6 COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD 1.DATE OF DICTATION 13 /7/11. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 13/7/11. /OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..