Shiva Consruction, Hooghly v. CIT, Burdwan, Burdwan

ITA 748/KOL/2010 | 2005-2006
Pronouncement Date: 28-05-2010

Appeal Details

RSA Number 74823514 RSA 2010
Assessee PAN AAWFS7211F
Bench Kolkata
Appeal Number ITA 748/KOL/2010
Duration Of Justice 1 month(s) 12 day(s)
Appellant Shiva Consruction, Hooghly
Respondent CIT, Burdwan, Burdwan
Appeal Type Income Tax Appeal
Pronouncement Date 28-05-2010
Appeal Filed By Assessee
Bench Allotted A
Tribunal Order Date 28-05-2010
Date Of Final Hearing 19-05-2010
Next Hearing Date 19-05-2010
Assessment Year 2005-2006
Appeal Filed On 16-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SRI D. K. TYAGI JM & HONBLE SRI C . D. RAO AM] I.T.A. NO.748/KOL/2010 ASSESSMENT YEAR: 2005-06 SHIVA CONSTRUCTION -VS- COMMISSIONER OF INCOME -TAX BURDWAN (PA NO. AAWFS 7211 F) (APPELLANT) (RESPONDENT) APPELLANT BY : SRI SOMNATH GHOSH RESPONDENT BY : SRI K. B. BRAHMA O R D E R PER D. K. TYAGI JM: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE LD. CIT KOLKATA DATED 15.03.2010 FOR ASSESSMENT YEAR 2005-0 6 PASSED U/S. 263 OF THE I. T. ACT 1961. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT IN T HIS CASE WAS COMPLETED U/S. 143(3) ON A TOTAL INCOME OF RS.81 07 764/-. SUBSEQUENTLY THE LD. CIT FOUND THAT ASSESSEE MADE CASH PAYMENT IN EXCESS OF RS.20 000/- TOWARDS LABOUR CHARGES AGGREGATING TO RS.10 03 210/-. IT WAS ALSO FOUND THAT ASSESEE MAD E TWO PAYMENTS OF RS.25 000/- EACH IN CASH TO MATERIAL SUPPLIER NAMELY M/S. MONDAL TRA DERS. ALL THESE PAYMENTS WERE MADE IN VIOLATION OF PROVISIONS OF SECTION 40A(3) O F THE ACT THEREFORE DISALLOWANCE U/S. 40A(3) SHOULD HAVE BEEN MADE BY THE AO. CONSE QUENTLY ACCORDING TO LD. CIT ASSESSMENT WAS ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF THE REVENUE AND NOTICE U/S. 263 WAS ISSUED TO THE ASSESSEE. AFTER TAKING THE S UBMISSIONS OF THE ASSESSEE INTO CONSIDERATION THE AO WAS DIRECTED TO PASS FRESH OR DER IN ACCORDANCE WITH THE DIRECTIONS GIVEN IN THE ORDER PASSED U/S. 263 OF THE ACT BY TH E LD. CIT. AGGRIEVED BY THE SAID ORDER NOW THE ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO WHILE PASSING ASSESSMENT ORDER U/S. 143(3) THE WHO LE LABOUR CHARGES IN THE SUM OF RS.72 61 850/- WAS DISALLOWED BY APPLYING PROVISION S OF SECTION 40(A)(IA) OF THE ACT. THE LD. CIT ASSUMED JURISDICTION U/S. 263 ON THE BA SIS THAT A SUM OF RS.10 03 210/- OUT OF THE LABOUR CHARGES OF RS.72 61 850/- HAVE INFR INGED. THEREFORE HE HELD THAT THE ASSESMENT ORDER WAS ERRONEOUS AS WELL AS PREJUDICIA L TO THE INTEREST OF THE REVENUE. IT 2 WAS FURTHER SUBMITTED THAT AGAINST THE ORDER OF THE AO THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) AND THE ADDITION MADE BY THE AO WAS UPHELD BY THE LD. CIT(A) VIDE ITS ORDER DATED 31.12.2008. THEREFORE THE ORD ER SOUGHT TO BE REVISED BY THE LD. CIT HAS ALREADY MERGED WITH THE APPELLATE ORDER OF THE LD. CIT(A). THEREFORE THE DOCTRINE OF MERGER IS APPLICABLE IN THE INSTANT CAS E AS THE AMOUNT OF RS.10 03 210/- CONSIDERED BY THE LD. CIT TO BE THE INCOME BY VIRTU E OF SECTION 40A(3) OF THE I. T. ACT WAS ALREADY CONSIDERED AND DECIDED BY THE LD. CIT( A) IN UPHOLDING THE ADDITION OF RS.72 61 850/-. THEREFORE THE ACTION OF THE LD. C IT OF INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT IS IN CONTRAVENTION OF THE S TATUTORY PROVISION IN THIS REGARD AND THEREFORE DESERVES TO BE QUASHED. HE HOWEVER DI D NOT SERIOUSLY DISPUTE THE ORDER OF THE LD. CIT IN RESPECT OF PAYMENT OF RS.25 000/- EA CH PAID TO M/S. MONDAL TRADERS FOR SUPPLY OF MATERIAL. 4. LD. DR ON THE OTHER HAND RELIED ON THE ORDER O F THE LD. CIT AND URGED BEFORE THE BENCH TO CONFIRM THE SAME. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THAT THE AO WHILE MAKING THE ASSESSMENT IN THI S CASE HAS DISALLOWED THE ENTIRE EXPENSES OF LABOUR CHARGES AMOUNTING TO RS.72 61 85 0/- WHICH INCLUDED THE AMOUNT OF RS.10 03 210/- PICKED UP BY THE LD. CIT FOR APPLYIN G THE PROVISIONS OF SECTION 40A(3). THIS ADDITION MADE BY THE AO WAS CONFIRMED BY THE L D. CIT(A) VIDE ITS ORDER DATED 31.12.2008. WE ARE OF THE CONSIDERED VIEW THAT AS P ER DOCTRINE OF MERGER THE ORDER OF THE AO AGAINST WHICH PROVISION OF SECTION 263 WAS I NVOKED BY THE LD. CIT MERGED WITH THE APPELLATE ORDER OF THE LD. CIT(A) AS LD. C IT INVOKED THE PROVISIONS OF SECTION 263 ON 3.3.2010 I.E. AFTER THE ORDER OF THE LD. CIT (A) WHICH IS DATED 31.12.2008. THEREFORE AS PER THE PROVISIONS OF THE ACT THE LD . CIT WAS NOT EMPOWERED TO INVOKE THE PROVISION OF SECTION 263 IN RESPECT OF CASH PAY MENT IN EXCESS OF RS.20 000/- TOWARDS LABOUR CHARGES AGGREGATING TO RS.10 03 210/- AND TH E ORDER PASSED BY THE LD. CIT ON THIS ISSUE IS HEREBY QUASHED. 6. AS FAR AS THE ISSUE RELATING TO TWO PAYMENTS OF RS.25 000/- EACH FOR MATERIAL SUPPLIED BY M/S. MONDAL TRADERS IS CONCERNED WE FE EL NO NEED TO INTERFERE WITH THE ORDER OF THE LD. CIT AS IT WAS NOT SERIOUSLY DISPUT ED BY THE LD. COUNSEL FOR THE ASSESSEE 3 AT THE TIME OF HEARING BEFORE US AND THE ORDER PASS ED BY THE LD. CIT IS HEREBY UPHELD. THEREFORE THE APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. 8. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28. 5.10 SD/- SD/- (C. D. RAO) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28TH MAY 2010 COPY TO : 1. M/S. SHIVA CONSTRUCTION C/O SOMNATH GHOSH ADV. SEVEN BROTHERS LODGE P.O. BUROSHIBTALA P.S. CHINSURAH DIST HOOGHLY PIN 712 105 2. CIT BURDWAN 3. DCIT BURDWAN 4. D.R. ITAT KOLKATA. TRUE COPY BY ORDER DEPUTY REGISTRAR JD.(SR.P.S.) I.T.AT. KOLKATA