The ACIT, Ujjain v. M/s Phaloudi Constructions., Rajgarh

ITA 326/IND/2009 | 2005-2006
Pronouncement Date: 11-05-2010 | Result: Dismissed

Appeal Details

RSA Number 32622714 RSA 2009
Assessee PAN AAFFP9523Q
Bench Indore
Appeal Number ITA 326/IND/2009
Duration Of Justice 10 month(s) 15 day(s)
Appellant The ACIT, Ujjain
Respondent M/s Phaloudi Constructions., Rajgarh
Appeal Type Income Tax Appeal
Pronouncement Date 11-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 11-05-2010
Assessment Year 2005-2006
Appeal Filed On 26-06-2009
Judgment Text
PAGE 1 OF 5 -.INO 326/IND/2009 AND C.O.NO.58/IND/2 009 M/S. PHALOUDI CONSTRUCTION NARSINGHGARH DIST. RAJ GARH. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : AAFFP9523Q I.T.A.NO. 326/IND/2009 A.Y. : 2005-06 ACIT M/S.PHALOUDI CONSTRUCTION 2(1) VS NARSINGHGARH UJJAIN DISTRICT RAJGARH APPELLANT RESPONDENT PAN NO. : AAFFP9523Q C.O.NO.58/IND/2009 (ARISING OUT OF I.T.A.NO. 326/IND/2009) A.Y. : 2005-06 M/S.PHALOUDI CONSTRUCTION ACIT NARSINGHGARH VS 2(1) DISTRICT RAJGARH UJJAIN CROSS OBJECTOR RESPONDENT ASSESSEE BY : SMT.APARNA KARAN SR. DR DEPARTMENT BY : SHRI S. C. GOYAL ADV DATE OF HEARING : 11.05.2010 O R D E R PER BENCH THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTIO N FILED BY THE ASSESSEE ARISE OUT OF ORDER OF THE LD. CIT(A) UJJA IN DATED 22.04.2009 FOR THE ASSESSMENT YEAR 2005-06. PAGE 2 OF 5 -.INO 326/IND/2009 AND C.O.NO.58/IND/2 009 M/S. PHALOUDI CONSTRUCTION NARSINGHGARH DIST. RAJ GARH. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. FIRST WE SHALL TAKE UP REVENUES APPEAL IN I.T.A.N O. 326/IND/2009. 4. IN GROUND NO.1 THE REVENUE IS AGGRIEVED BY THE DEC ISION OF THE LD. CIT(A) IN RESTRICTING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AT RS. 6 LAKHS OUT OF LABOUR CHARGES TO RS. 50 000/ -. 5. THE FACTS IN BRIEF ARE THAT THE AO BASED UPON THE FINDINGS GIVEN IN ASSESSMENT YEAR 2004-05 ALLOWED A SUM OF R S. 6 LAKHS OUT OF LABOUR/WAGES PAYMENT. 6. ON APPEAL THE LD. CIT(A) AFTER TAKING INTO CONSID ERATION THE TRADING RESULT AS WELL AS THE FACT THAT MAJORITY OF THE PAYMENTS WERE MADE THROUGH CHEQUE AND THE PERCENTAGE OF LABOUR CHARGES TO NET CONTRACT RECEIPTS WAS LESS AS COMPARED TO EARLIER YEARS REST RICTED THE DISALLOWANCE ONLY TO RS. 50 000/- AS SOME OF VOUCHERS WERE NOT A VAILABLE. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US AND THE ASSESSEE HAS FILED A CROSS OBJECTION AGAINST THE PART DISALLOWANCE CONFI RMED BY THE LD. CIT(A). 7. THE LEARNED COUNSEL AT THE VERY OUT-SET SUBMITTED THAT THIS ISSUE AROSE BEFORE THE TRIBUNAL IN THE EARLIER ASSE SSMENT YEAR ALSO AND THE TRIBUNAL DISMISSED THE REVENUES APPEAL AND SUSTAIN ED ONLY 50 % OF PART PAGE 3 OF 5 -.INO 326/IND/2009 AND C.O.NO.58/IND/2 009 M/S. PHALOUDI CONSTRUCTION NARSINGHGARH DIST. RAJ GARH. DISALLOWANCE CONFIRMED BY THE LD. CIT(A). IN THIS R EGARD HE REFERRED TO THE OBSERVATIONS OF THE TRIBUNAL AT PAGE 7 OF THE O RDER IN I.T.A.NO. 782/IND/2007 ORDER DATED 16.4.2004. 8. THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND PREFERRED TO RELY ON THE ORDER OF AO. 9. ON DUE CONSIDERATION OF FACT AND CIRCUMSTANCES AND HAVING REGARD TO THE EARLIER ORDER OF THE TRIBUNAL WE FIN D NO MERIT IN THIS GROUND OF THE REVENUE AS NO SPECIFIC CASE OF BOGUS EXPENDI TURE HAS BEEN MADE OUT BY THE ASSESSING OFFICER. THUS THIS GROUND OF THE REVENUE IS DISMISSED. 10. IN GROUND NO.2 THE REVENUE IS AGGRIEVED BY THE DEC ISION OF LD. CIT(A) IN DELETING THE DISALLOWANCE OF RS. 1 68 111 /- MADE BY THE ASSESSING OFFICER U/S 40A(3) OF THE ACT. THE AO MAD E DISALLOWANCE ON THE BASIS OF AGGREGATE PAYMENTS MADE IN CASH EXCEED ED RS. 20 000/-. 11. ON APPEAL THE LD. CIT(A) FOUND THAT IN THE YEAR UN DER CONSIDERATION THE AMENDED PROVISIONS WERE NOT APPLI CABLE. HENCE IF EACH TRANSACTION WAS LESS THAN RS. 20 000/- THEN NO DIS ALLOWANCE COULD BE MADE U/S 40A(3). THE LD. CIT(A) ALSO RELIED ON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. TRIVENIPRASAD PANNALAL (1997) 228 ITR 680. AGGRIEVED BY THIS TH E REVENUE IS IN APPEAL BEFORE US. PAGE 4 OF 5 -.INO 326/IND/2009 AND C.O.NO.58/IND/2 009 M/S. PHALOUDI CONSTRUCTION NARSINGHGARH DIST. RAJ GARH. 12. DURING THE COURSE OF HEARING THE LD. SR. DR RELIED ON THE ORDER OF THE A.O. WHEREAS THE LD. COUNSEL FOR THE ASSESS EE RELIED ON THE ORDER OF THE LD. CIT(A). 13. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 14. IT IS NOTED THAT IN THE YEAR UNDER CONSIDERATION T HE RATIO OF THE AFORESAID DECISION OF THE JURISDICITONAL HIGH COURT THAT PROVISIONS OF SECTION 40A(3) WERE NOT APPLICABLE AS EACH PAYMENT WAS LESS THAN RS. 20 000/- IS APPLICABLE. IT IS ALSO NOTED THAT AMEND ED PROVISIONS OF SECTION 40A(3) ARE ALSO NOT APPLICABLE. HENCE WE HOLD THAT THE VIEW OF THE AO IS NOT CORRECT IN LAW. ACCORDINGLY WE CONFIRM THE FI NDING OF THE LD. CIT(A). THUS THIS GROUND OF THE REVENUE IS ALSO DI SMISSED. 15. IN RESPECT OF ISSUE RAISED IN GROUND NO.3 THE LEAR NED COUNSEL AT THE VERY OUT-SET SUBMITTED THAT ADDITION MADE BY T HE ASSESSING OFFICER IN ASSESSMENT YEAR 2004-05 U/S 68 HAD BEEN DELETED AND HENCE THIS ADDITION COULD NOT BE MADE IN THE YEAR UNDER CONSIDERATION. IN THIS REGARD HE REFERRED TO THE ORDER OF THE TRIBUNAL. THE LD. SR. DR COULD NOT CONTROVERT THIS CLAIM OF THE ASSESSEE. ACCORDINGLY WE HOLD TH AT ONCE THE CASH CREDIT HAS BEEN FOUND TO BE GENUINE HENCE THE INTEREST P AID THEREON IS TO BE ALLOWED AS A BUSINESS EXPENDITURE. THUS THIS GROUN D OF THE REVENUE IS ALSO DISMISSED. PAGE 5 OF 5 -.INO 326/IND/2009 AND C.O.NO.58/IND/2 009 M/S. PHALOUDI CONSTRUCTION NARSINGHGARH DIST. RAJ GARH. 16. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS D ISMISSED. 17. NOW WE SHALL TAKE UP CROSS OBJECTION FILED BY THE ASSESSEE WHEREIN THE PART DISALLOWANCE OF RS. 50 000/- OUT O F LABOUR/WAGES PAYMENT IS AGITATED WHICH THE LEARNED COUNSEL PREF ERRED NOT TO PRESS. HENCE THE SAME IS DISMISSED AS WITHDRAWN. THUS C ROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. 18. TO SUM UP BOTH REVENUE AS WELL AS ASSESSEES CROSS OBJECTIONS ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 24 TH MAY 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 24 TH MAY 2010. CPU* 11135