N.Palanivelu, CHENNAI v. ITO, Salem

ITA 618/CHNY/2015 | 2009-2010
Pronouncement Date: 29-04-2015 | Result: Allowed

Appeal Details

RSA Number 61821714 RSA 2015
Assessee PAN AIGPP9199K
Bench Chennai
Appeal Number ITA 618/CHNY/2015
Duration Of Justice 30 day(s)
Appellant N.Palanivelu, CHENNAI
Respondent ITO, Salem
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 29-04-2015
Date Of Final Hearing 29-04-2015
Next Hearing Date 29-04-2015
Assessment Year 2009-2010
Appeal Filed On 30-03-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH CHENNAI . ! ' #$ BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER & SHRI V. DURGA RAO JUDICIAL MEMBER ./ I.T.A. NO.618/MDS/2015 ( / ASSESSMENT YEAR : 2009-2010) SHRI. N. PALANIVELU PROP. M/S. NAGAMALAI TEXTILES NO.4/78-A MAMPALAYAM DEVANANKURICHI POST TIRUCHENGODE TALUK NAMAKKAL 637 209 [PAN:AIGPP 9199K] ( %& /APPELLANT) VS THE INCOME TAX OFFICER WARD II(1) SALEM. ( '(%& /RESPONDENT) / APPELLANT BY : SHRI. A.S. SRIRAMAN ADVOCATE / RESPONDENT BY : SHRI. A.V.SREEKANTH IRS JCIT. /DATE OF HEARING : 29.04.2015 /DATE OF PRONOUNCEMENT : 29.04.2015 ) / O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER THIS APPEAL BY ASSESSEE ARE DIRECTED AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) SALEM DATED 29.01.2015 FOR THE ASSESSMENT YEAR 2009-10. I.T.A.NO.618/MDS/2015. :- 2 -: 2. THE FIRST GROUND FOR CONSIDERATION IS WITH REGARD T O ADDITION MADE U/S.40 (A)(IA) OF THE ACT. 2.1 THE BRIEF FACTS OF THE CASE THE ASSESSEE IS A P ROPRIETOR OF M/S. NAGAMALAI TEXTILES WHICH CONCERN IS INDULGED IN MA NUFACTURING OF FABRICS AND HAD MADE A TOTAL TURNOVER OF E9 30 49 4 75/- DURING THE FINANCIAL YEAR 2008-09. DURING THE COURSE OF PRODUC TION THE UNIT HAS INCURRED A SUM OF E23 18 855/- TOWARDS SIZING WHICH PROCESS IS NEEDED FOR STRENGTHENING THE WRAP BY ADDING STARCH TO REDU CE BREAKAGE OF THE YARNS. IN ORDER TO COMPLETE THE ABOVE PROCESS THE A SSESSEE HAS ENGAGED TO VARIOUS SIZING MILS WHO MILLS WHO EXECUT E THE SAID PROCESS FOR THE ASSESSEE. THE POINT TO BE NOTED IN THIS CAS E IS THAT THE WHOLE CONTROL OF THE WORK WAS IN THE HANDS OF THE ASSESSE E AND ALLEGED SUB CONTRACT WORK WAS EXECUTED I.E. SIZING WORK UNDER T HE FULL CONTROL OF THE ASSESSEE ITSELF. THERE ARE NO SUCH DISCRETION WITH ALLEGED SUB- CONTRACTORS FOR EXECUTING THE ABOVE WORKS. THEY WE RE EXECUTING THE WORK AS PER REQUIREMENT OF TENDER UNDER FULL CONTRO L AND SUPERVISION OF ASSESSEE. THE ASSESSING OFFICER HAS DISALLOWED AN A MOUNT OF E23 18 855/- ON THE GROUND THAT NO TDS WAS MADE BY THE ASSESSEE AS REQUIRED U/S.194C OF THE ACT. ON APPEAL THE COMMI SSIONER OF INCOME I.T.A.NO.618/MDS/2015. :- 3 -: TAX (APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERI AL ON RECORD. WE FIND THAT THE SPECIAL BENCH OF THE TRIBU NAL IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS VS. ACIT (2012) 136 ITD 23 (VISAKHAPATNAM) AND JUDGMENT OF GUJARAT HIGH COURT IN THE CASE OF CIT VS. M/S. VECTOR SHIPPING SERVICES (P) LTD IN IT A NO.122 OF 2013 DATED 09.7.2013 HELD THAT SEC 40(A)(IA) IS NOT APPLICABLE WHEN THERE IS NO OUTSTANDING BALANCE AT THE END OF THE CLOSE OF T HE YEAR RELEVANT TO THE ASSESSMENT YEA IN RESPECT OF THESE PAYMENT. HO WEVER THE ASSESSEE HAS NOT BROUGHT ON RECORD THE DETAILS OF OUTSTANDING EXPENSES OR SCHEDULE OF SUNDRY CREDITORS SHOWING WH ETHER THE IMPUGNED AMOUNT IS OUTSTANDING AT THE END OF THE C LOSE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR EITHE R IN THE NAME OF THE PARTY OR OUTSTANDING EXPENSES. HENCE IN THE I NTEREST OF JUSTICE WE ARE REMITTING THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO VERIFY THE CLAIM OF THE ASSESSEE AND T HE ASSESSEE SHALL PLACE NECESSARY EVIDENCE IN SUPPORT OF HIS CLAIM. I.T.A.NO.618/MDS/2015. :- 4 -: 4. FURTHER WE MAKE IT CLEAR THAT IF THE IMPUGNED AMOU NT IS NOT OUTSTANDING AT THE END OF THE CLOSE OF THE ASSESSME NT YEAR IN RESPECT OF THE EXPENSES EITHER AS OUTSTANDING EXPENSES OR AS SUNDR Y CREDITORS THIS AMOUNT CANNOT BE DISALLOWED. THIS GROUND IS R EMITTED BACK TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION. 5. THE NEXT GROUND IS WITH REGARD TO PARTIALLY SUSTAI NING THE DISALLOWANCE @ 20% ON WEAVING CHARGES. WHILE COMPL ETING THE ASSESSMENT THE ASSESSING OFFICER DISALLOWED 20% OF THE WEAVING/COOLY PAID TO THE LABOUR ON THE GROUND THAT VOUCHERS ARE ALL SELF-MADE. AGGRIEVED THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). ON APPEAL TH E COMMISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE DISALLOWANCE TO 15%. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD. IN OUR OPINION ADHOC DISALLOWANCE MADE BY THE ASSESSING OFFICER @20% ON THE GROUND THAT SUPPORTING VOUCHE RS ARE SELF-MADE VOUCHERS IS ON HIGHER SIDE. IN OUR OPINION IT IS APPROPRIATE TO DISALLOW ONLY 10% OF WEAVING CHARGES SUPPORTED BY SELF MADE VOUCHERS. THIS GROUND IS PARTLY ALLOWED. I.T.A.NO.618/MDS/2015. :- 5 -: 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IN ITA NO.618/MDS/2015 IS PARTLY ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIM E OF HEARING ON WEDNESDAY THE 29 TH OF APRIL 2015 AT CHENNAI. SD/- SD/- ( . ! ) V. DURGA RAO ' / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER !' /CHENNAI. #$ /DATED:29.04.2015. KV $% &' (' /COPY TO: 1. ) APPELLANT 2. / RESPONDENT 3. * ( )/CIT(A) 4. * /CIT 5. '+ - /DR 6. . / /GF.