M/s. Ghanshyam Diamond, Surat v. The Income tax Officer,Ward-9(1),, Surat

ITA 3205/AHD/2009 | 2006-2007
Pronouncement Date: 31-08-2010 | Result: Allowed

Appeal Details

RSA Number 320520514 RSA 2009
Assessee PAN AAGFK1265R
Bench Ahmedabad
Appeal Number ITA 3205/AHD/2009
Duration Of Justice 9 month(s)
Appellant M/s. Ghanshyam Diamond, Surat
Respondent The Income tax Officer,Ward-9(1),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 31-08-2010
Date Of Final Hearing 16-08-2010
Next Hearing Date 16-08-2010
Assessment Year 2006-2007
Appeal Filed On 30-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT JUDICIAL MEMBER) ITA.NO.3205/AHD/2009 [ASSTT. YEAR : 2006-2007] M/S.GHANSHYAM DIAMOND 57/97 2 ND FLOOR BUMBAWADI KATARGAM SURAT PAN : AAGFK 1265 R VS. ITO WARD-8(2) SURAT. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHWIN PAREKH REVENUE BY : SHRI ANIL KUMAR O R D E R PER G.D. AGRAWAL VICE-PRESIDENT: THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-V SURAT D ATED 30.09.2009 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961. 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASS ESSEE IS AGAINST THE DISALLOWANCE OF LABOUR EXPENSES AMOUNTING TO RS.2 45 375/-. 3. AT THE TIME OF HEARING BEFORE US IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT DURING THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE STARTED JOB WORK OF PROCESSING OF DIAMOND. TOTAL J OB WORK CHARGES RECEIVED BY THE ASSESSEE WAS RS.1 36 92 140/- AGAINST WHICH THE ASS ESSEE MADE THE LABOUR PAYMENT OF RS.1 22 68 795/-. THAT THE ENTIRE LABOUR PAYMENT I S DULY VOUCHED AND VERIFIABLE AS PER THE WAGE SHEET. THAT AFTER THIS YEAR THE ASSESSEE CLOSED ITS BUSINESS. THAT DURING THE ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE T O SUBMIT THE COMPLETE DETAILS OF ALL THE WORKERS. THAT THE ASSESSEE PRODUCED WAGE SHEET IN WHICH NAMES OF THE LABOURERS WAS MENTIONED. SINCE THE LABOURERS HAVE ALREADY LEFT T HE ASSESSEE BECAUSE THE ASSESSEE CLOSED ITS BUSINESS THE ASSESSEE COULD NOT PRODUCE THE DETAILED ADDRESS OF THE LABOURERS. ITA.NO.3205/AHD/2009 2 IN THE ABOVE CIRCUMSTANCES THE AO DISALLOWED 2% OU T OF THE WAGE CHARGES ON ESTIMATE BASIS. 4. IT IS SUBMITTED BY THE LEARNED COUNSEL THAT MERE LY BECAUSE THE COMPLETE DETAILS OF THE LABOURERS COULD NOT BE SUPPLIED BY THE ASSESSEE WOULD NOT BE GROUND FOR DISALLOWANCE OF PART OF WAGES. HE HAS STATED THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE DERIVES INCOME FROM JOB WORK OF THE DIAMOND PROCESSING FOR WHICH T HE ASSESSEE HAD TO EMPLOY THE LABOURERS AND THE LABOUR PAYMENT IS DULY SUPPORTED BY THE WAGE REGISTER. THAT CONSIDERING THE FIRST YEAR OF THE ASSESSEES BUSINE SS THE GP EARNED BY THE ASSESSEE AT 7% WAS QUITE REASONABLE. HE HAS SUBMITTED THAT IN SEV ERAL OTHER CASES THE ITAT HAS TAKEN THE VIEW THAT MERELY BECAUSE THE DETAILS OF THE LAB OURERS ARE NOT MAINTAINED WOULD NOT BE SUFFICIENT GROUND TO DISALLOW THE LABOUR CHARGES. HE ALSO SUBMITTED THAT THE GP DISCLOSED AT 7% IS BETTER THAN VARIOUS OTHER DEALERS. HE REF ERRED TO THE DECISION OF THE ITAT AHMEDABAD C BENCH IN THE CASE OF SHRI BHARATKUMAR RAMNIKAL MEHTA VS. ITO SURAT IN ITA NO.1296/AHD/2004. IN THAT CASE THE AO MADE THE ADDITION BECAUSE THE LABOURERS WERE NOT AVAILABLE AT THE ADDRESS GIVEN BY THE ASSE SSEE. THE ITAT DELETED THE ADDITION ON THE GROUND THAT THE GP DISCLOSED AT 3.62% WAS BE TTER THAN THE EARLIER YEARS WHICH WAS 3.5%. HE SUBMITTED THAT THE ASSESSEE DISCLOSED THE GP AT 7%. 5. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CAREFULLY CONSIDERED ARGUMENTS OF BOTH T HE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE ASSESSEE HAS M AINTAINED COMPLETE DETAILS WITH REGARD TO THE LABOUR PAYMENT. THE ASSESSEE HAS PRODUCED B EFORE US THE PHOTO COPY OF THE WAGE REGISTER IN WHICH NAMES OF LABOURERS NUMBER OF DIA MOND PROCESSING RATE AND AMOUNT OF LABOUR CHARGES ARE MENTIONED. EACH PAYMENT IS SIGN ED BY THE RECIPIENT. THUS THE ASSESSEE HAS MAINTAINED COMPLETE DETAILS WITH REGAR D TO THE WORK DONE BY THE LABOURER AND THE RATE AT WHICH THE LABOUR CHARGE WAS PAID. THE RECEIPT FOR THE PAYMENT MADE IS ALSO THERE. THEREFORE MERELY BECAUSE THE COMPLET E PARTICULARS OF LABOURERS ARE NOT AVAILABLE IT CANNOT BE SAID THAT THE LABOUR PAYMEN T IS NOT GENUINE. THE AO HAS NOT MENTIONED THAT THE PAYMENT MADE BY THE ASSESSEE IS EXCESSIVE OR UNREASONABLE. CONSIDERING THE FACTS OF THE CASE THAT IT IS THE FI RST YEAR OF THE ASSESSEES BUSINESS THE GP ITA.NO.3205/AHD/2009 3 DISCLOSED AT 7% IS REASONABLE. IN VIEW OF THE TOTA LITY OF THE ABOVE FACTS IN OUR OPINION THERE IS NO JUSTIFICATION FOR DISALLOWANCE OF 2% OF THE LABOUR CHARGES ON AD HOC BASIS WE DELETE THE SAME. 6. IN THE RESULT THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 31 ST AUGUST 2010. SD/- SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 31-08-2010 VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD