M/s Eluru FCI Food Storage Hamali Labour Contract Coop Society Ltd,, Eluru v. The ITO, Ward-2,, Eluru

ITA 374/VIZ/2007 | 1993-1994
Pronouncement Date: 12-08-2010 | Result: Allowed

Appeal Details

RSA Number 37425314 RSA 2007
Assessee PAN AABAT3834B
Bench Visakhapatnam
Appeal Number ITA 374/VIZ/2007
Duration Of Justice 2 year(s) 11 month(s) 30 day(s)
Appellant M/s Eluru FCI Food Storage Hamali Labour Contract Coop Society Ltd,, Eluru
Respondent The ITO, Ward-2,, Eluru
Appeal Type Income Tax Appeal
Pronouncement Date 12-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 12-08-2010
Date Of Final Hearing 04-05-2010
Next Hearing Date 04-05-2010
Assessment Year 1993-1994
Appeal Filed On 13-08-2007
Judgment Text
ITA NO.374/VIZAG/2007 ELURU FCI FOOD STORAGE HAMALI LABOUR CONTRACT COOP SOCIETY LTD. ELURU PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO.374/VIZAG/2007 ASSESSMENT YEAR: 1993-94 ELURU FCI FOOD STORAGE HAMALI LABOUR CONTRACT COOP SOCIETY LTD. ELURU VS. ITO WARD-2 ELURU (APPELLANT) PAN NO: AABAT 3834B (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI CA RESPONDENT BY: SHRI D.S. SUNDER SINGH (DR) ORDER PER SHRI B. R. BASKARAN ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 25-05- 2007 PASSED BY LEARNED CIT (A) RAJAHMUNDRY AND IT RELATES TO THE ASSESSMENT YEAR 1993-94. 2. THE SOLE ISSUE URGED IN THIS APPEAL IS WHETHER T HE LEARNED CIT (A) IS JUSTIFIED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING THE INCOME OF THE ASSESSEE AT RS.1 24 039/-. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS A COOPERATIVE SOCIETY AND FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 1993- 94 DECLARING A LOSS OF RS.17 900/-. FROM THE FINAN CIAL STATEMENTS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD MAD E PAYMENT TOWARDS LABOUR CHARGES AS UNDER: WAGES - RS. 10 83 716.00 EXTRA LABOUR - RS. 2 44 050.00 GOODS LABOUR - RS. 1 82 210.00 ITA NO.374/VIZAG/2007 ELURU FCI FOOD STORAGE HAMALI LABOUR CONTRACT COOP SOCIETY LTD. ELURU PAGE 2 OF 3 ACCORDING TO THE ASSESSING OFFICER THE AMOUNT BOOK ED UNDER THE HEAD WAGES WAS PAID TO THE MEMBERS OF THE COOPERATIVE SOCIETY AND THE AMOUNT BOOKED UNDER OTHER TWO HEADS CITED ABOVE HAV E BEEN PAID TO CASUAL LABOURERS WHO ARE NOT MEMBERS OF THE SOCIETY . THE ASSESSING OFFICER BY RELYING ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ASSAM COOPERATIVE MARKET APEX SOCIETY VS. CIT (A DDL.) (201 ITR 338) HELD THAT THE ASSESSEE IS NOT ENTITLED TO THE BENEF IT OF DEDUCTION U/S 80P OF THE ACT I SUCH A KIND OF SITUATION. THE ASSESSING OF FICER ALSO REJECTED THE BOOKS OF ACCOUNT WITH THE OBSERVATION THAT THE BOOK S & VOUCHERS ARE NOT PROPERLY MAINTAINED. THUS THE ASSESSING OFFICER PRO CEEDED TO ESTIMATE THE INCOME OF THE ASSESSEE U/S 145 OF THE ACT. FROM TH E GROSS RECEIPTS OF RS.20.76 LAKHS THE ASSESSING OFFICER ESTIMATED THE RECEIPTS PERTAINING TO THE CASUAL LABOURERS AT RS. 9.92 LAKHS. ON THE SAID AMOUNT THE ASSESSING OFFICER ESTIMATED THE PROFIT @ 12.5% WHICH WORKED O UT RS.1.24 039/-. THE ASSESSING OFFICER TREATED THE SAID AMOUNT AS THE TO TAL INCOME OF THE ASSESSEE. THE ASSESSEE COULD NOT WIN ITS CASE BEFOR E THE LEARNED CIT (A). HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS. ACCORDING T O LEARNED AUTHORISED REPRESENTATIVE THE OBSERVATION OF THE ASSESSING OFF ICER THAT CERTAIN AMOUNT OF WAGES WERE PAID TO THE CASUAL LABOURERS WHO ARE NOT MEMBERS OF THE ASSESSEE SOCIETY IS NOT CORRECT AND AGAINST THE ACT UAL FACTS. ACCORDING TO THE LEARNED AUTHORISED REPRESENTATIVE ALL THE THREE TY PES OF WAGES SHOWN IN THE BOOKS OF ACCOUNT HAVE BEEN PAID TO THE MEMBERS OF THE ASSESSEE SOCIETY ONLY. HOWEVER THE LEARNED AUTHORISED REPRES ENTATIVE COULD NOT CLARIFY THE NECESSITY AND PURPOSE OF BOOKING THE WA GES DISBURSEMENT UNDER THREE HEADS. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THE ASSESSEE COULD BE IN A POSITION TO SUBSTANTIATE ITS CLAIM TH AT NO OUTSIDE PERSONS WERE EMPLOYED BY IT IF AN OPPORTUNITY IS PROVIDED. HEN CE IN THE INTEREST OF NATURAL JUSTICE WE SET ASIDE THE MATTER TO THE FIL E OF THE ASSESSING OFFICER WITH A DIRECTION TO VERIFY THE CLAIM OF THE ASSESSE E THAT THE WAGES BOOKED UNDER THREE HEADS CITED ABOVE HAVE BEEN MADE TO THE MEMBERS OF THE ITA NO.374/VIZAG/2007 ELURU FCI FOOD STORAGE HAMALI LABOUR CONTRACT COOP SOCIETY LTD. ELURU PAGE 3 OF 3 ASSESSEE SOCIETY ONLY. AFTER VERIFICATION THE ASS ESSING OFFICER MADE DECIDE THE ISSUE IN ACCORDANCE WITH LAW. THE ASSESSEE IS A LSO DIRECTED TO SUBMIT NECESSARY INFORMATION THAT MAY BE CALLED FOR BY THE ASSESSING OFFICER IN THIS REGARD. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH AUGUST 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE:12-08-2010 COPY TO 1 THE ELURU FCI FOOD STORAGE HAMALI LABOUR CONTRACT COOP SOCIETY LTD. KANDRIKAGUDEM ELURU 2 THE ITO WARD-2 ELURU 3 4. THE CIT RAJAHMUNDRY THE CIT(A) RAJAHMUNDRY 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM