The DCIT, S.K. Circle,, Himatnagar v. M/s. N.G. Projects,,

ITA 3121/AHD/2008 | 2005-2006
Pronouncement Date: 07-01-2011 | Result: Allowed

Appeal Details

RSA Number 312120514 RSA 2008
Assessee PAN AABCN8366J
Bench Ahmedabad
Appeal Number ITA 3121/AHD/2008
Duration Of Justice 2 year(s) 4 month(s) 4 day(s)
Appellant The DCIT, S.K. Circle,, Himatnagar
Respondent M/s. N.G. Projects,,
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 07-01-2011
Date Of Final Hearing 04-01-2011
Next Hearing Date 04-01-2011
Assessment Year 2005-2006
Appeal Filed On 02-09-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL VP AND BHAVNESH SAINI JM) ITA NO.3121/AHD/2008 A. Y.: 2005-06 THE D. C. I. T. SABARKANTHA CIRCLE 2 ND FLOOR B/S. MEHTA PETROL PUMP AMBALAL COMPLEX HIMATNAGAR DIST. SABARKANTHA VS N. G. PROJECTS LTD. MEHTAPURA RLY. CROSSING HIMATNAGAR PA NO. AABCN 8366 J (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ANIL KUMAR DR RESPONDENT BY SHRI SAKAR SHARMA AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-X AHMEDABAD DATED 10-06-2008 FOR ASSESSMENT YEAR 2005-06 ON THE FOLL OWING GROUNDS: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING ADDITION OF RS.51 02 722/- MADE BY THE A O U/S. 69C OF THE ACT BEING IMPREST PAYMENTS TO CONTRACTORS. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING ADDITION OF RS.9 43 000/- MADE BY THE A O U/S. 69C OF THE ACT BEING IMPREST PAYMENTS TO CONTRACTORS IN CASH NOT RECORDED IN THE BOOKS OF ACCOUNT. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SURVEY U/ S 133A OF THE IT ACT WAS CARRIED OUT ON 17-02-2005. THEREFORE THE C ASE WAS SELECTED FOR SCRUTINY. THE ADDITION OF RS.51 02 722/- WAS MA DE ON ACCOUNT OF ITA NO.3121/AHD/2008 DCIT SABARKANTHA CIRCLE-1 VS N. G. PROJECT LTD. 2 IMPREST PAYMENT TO SUB CONTRACTORS U/S 69 C OF THE IT ACT. THE AO HAS DISCUSSED THE ISSUE AT PAGE 7 TO 24 OF THE ASSE SSMENT ORDER AND OBSERVED THAT DURING THE COURSE OF SURVEY ON THE B ASIS OF IMPOUNDED BOOKS OF ACCOUNT SHRI HARENDRA SINGH DIRECTOR CON FIRMED THAT RS.1 22 80 000/- WAS PAID IN CASH TO THE SUB CONTRA CTORS IN ANSWER TO QUESTION NO.15 AND WAS READY TO PAY TAX BUT WHILE FILING THE RETURN OF INCOME THE ASSESSEE HAS NOT SHOWN THIS INCOME. THE AO PROPOSED TO MAKE THE ABOVE ADDITION AND NOTED THAT SUMMARY S TATEMENT GIVEN DURING THE ASSESSMENT PROCEEDINGS RS.1 22 80 000/- ARE VERIFIED WITH ANOTHER IMPOUNDED BOOKS THERE IS A VARIATION FOUND IN THE SEIZED PAPERS. THERE ARE MANY ENTRIES REFLECTED AND DUPLIC ATED WITH THE SEIZED PAPERS. AFTER CONSIDERING THE DETAILS OF RS. 1 22 80 000/- THE AO MADE ADDITION WHICH WERE NOT FOUND IN THE CASH B OOK WHICH WAS IMPOUNDED AS HARD COPY OF CASH BOOK. AS PER THE VER IFICATION TOTAL ADDITION COMES TO RS.51 02 722/- WHICH WERE NOT SHO WN IN THE BOOKS OF ACCOUNT WHICH WERE IMPOUNDED DURING THE SURVEY PROCEEDINGS U/S 133A OF THE IT ACT. THE ASSESSEE COULD ACCOUNT FOR THE EXPENSES PARTLY AND AFTER VERIFICATION OF THE SEIZED BOOKS T HERE WERE DUPLICATE ENTRIES WHICH WERE SHOWN AS SITE EXPENSES. THE ADDI TION WAS CHALLENGED BEFORE THE LEARNED CIT(A) AND DETAILED S UBMISSION WAS MADE WHICH IS INCORPORATED IN THE IMPUGNED ORDER WH ICH IS IN THE FORM OF RECONCILIATION. THE LEARNED CIT(A) ACCEPTED THE EXPLANATION OF THE ASSESSEE AND DELETED THE ADDITION. WITH REGARD TO ADDITION OF RS.9 43 000/- AGAIN MADE ON ACCOUNT OF IMPREST ACCO UNT PAYMENT TO SUB CONTRACTORS THE AO SIMILARLY OBSERVED THAT THE RE IS NO SUCH CASH PAYMENTS IN THE BOOKS OF ACCOUNT NOTED TO SHOW THE PAYMENTS TO THE SUB CONTRACTORS. THE ADDITION WAS ACCORDINGLY MADE U/S 69C OF THE IT ITA NO.3121/AHD/2008 DCIT SABARKANTHA CIRCLE-1 VS N. G. PROJECT LTD. 3 ACT. AGAIN THE ASSESSEE TRIED TO RECONCILE THE FIG URES BEFORE THE LEARNED CIT(A) WHICH HAVE BEEN ACCEPTED AND THE ADD ITION WAS ACCORDINGLY DELETED. 3. THE LEARNED DR SUBMITTED THAT DURING THE COURSE OF SURVEY BOOKS OF ACCOUNT WERE IMPOUNDED WHICH SHOWS THAT NO PAYMENTS HAVE BEEN RECORDED IN THE BOOKS IMPOUNDED SHOWN TO HAVE BEEN MADE TO THE SUB CONTRACTORS THEREFORE IT WAS UNAC COUNTED EXPENSES FOR WHICH ADDITION HAS BEEN RIGHTLY MADE. HE HAS SU BMITTED THAT SINCE ADDITION WAS MADE BY THE AO AS PER IMPOUNDED BOOKS OF ACCOUNT THEREFORE THE LEARNED CIT(A) SHOULD HAVE CONSIDERE D THIS CASE IN THE LIGHT OF THE PROVISIONS OF SECTION 292 C OF THE IT ACT WHICH IS APPLICABLE TO THE SURVEY PROCEEDINGS WITH EFFECT FR OM 01-06-2002. THE LEARNED DR SUBMITTED THAT SINCE THE ABOVE MANDA TORY PROVISIONS HAVE NOT BEEN CONSIDERED BY THE LEARNED CIT(A) THE REFORE THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE. HOWEVER TH E LEARNED COUNSEL FOR THE ASSESSEE SUGGESTED THAT THE MATTER MAY BE EXAMINED IN THE LIGHT OF THE PROVISIONS OF SECTION 292C OF THE IT ACT AND THE MATTER MAY BE REMANDED TO THE FILE OF THE A O FOR RECONSIDERATION IN THE LIGHT OF THE SUBMISSIONS OF THE ASSESSEE. HE HAS ALSO FILED COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE OF THE SAME ASSESSEE FOR PRECEDING ASSESSMENT YEAR 2004-05 IN ITA NO.3571/AHD/2007 DATED 16-07-2010 AND SUBMITTED THA T ON THE IDENTICAL ISSUE ON GROUND NO.(1) THE MATTER IS RES TORED TO THE FILE OF THE AO FOR RE-DECIDING THE ISSUE AFRESH. COPY OF TH E ORDER IS FILED ON RECORD. ITA NO.3121/AHD/2008 DCIT SABARKANTHA CIRCLE-1 VS N. G. PROJECT LTD. 4 4. ON CONSIDERATION OF THE SUBMISSIONS OF THE PARTI ES IN THE LIGHT OF THE OBSERVATIONS OF THE AUTHORITIES BELOW WE ARE O F THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE AO. ADMITTEDLY SURVEY WAS CONDUCTED U/S 13A OF THE IT ACT ON 17-02 -2005. THE PROVISIONS OF SECTION 292 C OF THE IT ACT HAVE BEEN INSERTED IN THE INCOME TAX ACT RETROSPECTIVELY WITH EFFECT FROM 01- 10-1975 AND SUCH PROVISIONS ARE MADE APPLICABLE TO SURVEY PROCEEDING S U/S 133A OF THE IT ACT WITH EFFECT FROM 01-06-2002. THE SAME PROVIS IONS U/S 292 C OF THE IT ACT READS AS UNDER: PRESUMPTION AS TO ASSETS BOOKS OF ACCOUNT ETC. 292C. [(1)] WHERE ANY BOOKS OF ACCOUNT OTHER DOCUMENTS MONEY BULLION JEWELLERY OR OTHER VALUA BLE ARTICLE OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH UNDER SECTION 132 [OR SURVEY UNDER SECTION 133A ] IT MAY IN ANY PROCEEDING UNDER THIS ACT BE PRESUMED (I) THAT SUCH BOOKS OF ACCOUNT OTHER DOCUMENTS MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS TO SUCH PERSON; (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE TRUE; AND (III) THAT THE SIGNATURE AND EVERY OTHER PART OF SU CH BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR W HICH MAY REASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY O R TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON ARE IN THAT PERSONS HANDWRITING AND IN THE CASE OF A DOC UMENT STAMPED EXECUTED OR ATTESTED THAT IT WAS DULY STA MPED ITA NO.3121/AHD/2008 DCIT SABARKANTHA CIRCLE-1 VS N. G. PROJECT LTD. 5 AND EXECUTED OR ATTESTED BY THE PERSON BY WHOM IT PURPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED.] [(2) WHERE ANY BOOKS OF ACCOUNT OTHER DOCUMENTS OR ASSETS HAVE BEEN DELIVERED TO THE REQUISITIONING OF FICER IN ACCORDANCE WITH THE PROVISIONS OF SECTION 132A THEN THE PROVISIONS OF SUB-SECTION (1) SHALL APPLY AS IF SUC H BOOKS OF ACCOUNT OTHER DOCUMENTS OR ASSETS WHICH HAD BEE N TAKEN INTO CUSTODY FROM THE PERSON REFERRED TO IN C LAUSE (A) OR CLAUSE (B) OR CLAUSE (C) AS THE CASE MAY BE OF SUB- SECTION (1) OF SECTION 132A HAD BEEN FOUND IN THE POSSESSION OR CONTROL OF THAT PERSON IN THE COURSE OF A SEARCH UNDER SECTION 132 .] BOTH THE PARTIES THEREFORE RIGHTLY CONTENDED THAT THE ISSUES SHALL HAVE TO BE CONSIDERED IN THE LIGHT OF THE PROVISION S OF SECTION 292 C OF THE IT ACT. IN THIS CASE DURING THE COURSE OF SURV EY BOOKS OF ACCOUNT WERE IMPOUNDED TO SHOW THAT THE PAYMENTS TO SUB CON TRACTORS HAVE NOT BEEN RECORDED IN THE BOOKS. THEREFORE IT WAS C ONSIDERED THAT THE EXPENSES WERE NOT RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED IN THE REGULAR COURSE OF BUSINESS. SINCE DURING THE CO URSE OF SURVEY IMPOUNDED BOOKS OF ACCOUNT PRIMA FACIE SUPPORT THE CASE OF THE REVENUE THEREFORE THE CASE SHOULD HAVE BEEN DEALT IN THE LIGHT OF THE PROVISIONS OF SECTION 292C OF THE IT ACT AND IN THE LIGHT OF THE EXPLANATION OF THE ASSESSEE. WE FIND THAT THE ABOVE PROVISIONS HAVE NOT BEEN TAKEN INTO CONSIDERATION; THEREFORE THE P ARTIES HAVE RIGHTLY SUGGESTED THAT MATTER MAY BE REMANDED FOR FRESH ADJ UDICATION IN ACCORDANCE WITH THE ABOVE PROVISIONS OF LAW. MORE S O THE LEARNED COUNSEL FOR THE ASSESSEE FIELD COPY OF THE ORDER IN THE CASE OF THE SAME ASSESSEE DECIDED BY THE TRIBUNAL ON 16-07-2010 IN WHICH ONE OF THE IDENTICAL ISSUES THE MATTER HAS BEEN RESTORE D TO THE FILE OF THE ITA NO.3121/AHD/2008 DCIT SABARKANTHA CIRCLE-1 VS N. G. PROJECT LTD. 6 AO FOR RECONSIDERATION AND SOME PAYMENTS TO SUB CON TRACTORS FOR ASSESSMENT YEAR UNDER APPEAL HAVE BEEN OBSERVED. CO NSIDERING THE ABOVE DISCUSSIONS WE SET ASIDE THE ORDERS OF THE A UTHORITIES BELOW AND RESTORE THE MATTER IN ISSUES TO THE FILE OF THE AO FOR RECONSIDERATION OF THE ISSUES IN THE LIGHT OF THE P ROVISIONS OF SECTION 292 C OF THE IT ACT. THE AO SHALL GIVE REASONABLE S UFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND SHAL L ALSO TAKE INTO CONSIDERATION THE EXPLANATION FILED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW. THE ASSESSEE IS ALSO AT LIBERTY TO ADDUCE ANY OTHER EVIDENCE BEFORE THE AO IN SUPPORT OF THE EXPLANATIO N. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07-01-2011 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 07-01-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD