JACOB IDICULA, KORBA,JAMNIPALI vs. ACIT CIRCLE-1(1), BILASPUR, BILASPUR

The appellant assessee has raised following grounds of appeal:

The relevant facts giving rise to this appeal are that the assessee is a civil contractor. He filed his Income Tax Return (‘ITR’) of the relevant year on 09.12.2016 declaring income of Rs.7,68,71,650/-. The case was picked up for scrutiny. The assessee’s business premises were surveyed under section 133A of the Act on 26.02.2016. Based on certain discrepancies noticed during the course of survey proceedings, the assessee admitted the Net Profit (‘NP) rate @ 8.00%. Resultantly, he offered the additional income of Rs.5,43,83,651/- of gross contract receipts of AYs 2012-13 to 2016-17 in the relevant year. The said additional income was the difference between the Net Profit (‘NP’) @ 8.00% of contract receipts and the disclosed NP as per Profit & Loss Accounts. Accordingly, he offered the difference of NP @ 8.00% of gross contract receipts of AYs 2012-13 to 2016-17 and the disclosed NP as per Profit & Loss Accounts of these years in the relevant year. Thus, the assessee offered the income of Rs.7,68,71,650/- including the additional income of Rs.5,43,83,651/- in the ITR of the relevant year on the contract receipts of Rs.43,14,86,914/- of the relevant year. Thus, the income of relevant year of Rs.7,68,71,650/- as against the contract receipts of Rs.43,14,86,914/- works out NP rate of 17.82%.

During the course of assessment proceedings, the Ld. Assessing Officer (‘AO’) noticed certain discrepancies; therefore, he made disallowances of (i) Rs.6,00,000/- out of Petty Labour Expenses of Rs.2,25,86,437/- on the reasoning that the muster roll and weekly attendance register of the labours and (ii) Rs.2,00,000/- out of transport and handling charges of Rs.46,32,691/- on the reasoning that these expenses were not properly vouched as mentioned in paragraph 6(a) and 6(b) of the assessment order. The relevant part of the assessment order reads as under: “a) Petty Labour Charge: An amount of Rs. 2,25,86,437/- is debited toward this head of expenditure in P&L a/c. Assessee was asked to produce muster roll for verification. The assessee produced muster roll along with all relevant documents for verification during the course of assessment proceedings. It is seen that the payment to labours was made on their weekly attendance basis. On further verification, it is seen that some rolls are very poorly maintained. Only initials are found recorded in place of name of worker. In some cases thumb impressions taken from them are beyond recognition for verification. The counsel for the assessee was asked to explain these discrepancies with supporting documents. However, the assessee could not explain the same properly. The onus of proving necessary facts in order to claim deduction is on assessee and burden is on him to prove that the expenses were laid out wholly and exclusively for the purpose of business as has been held in plethora of cases like CIT Vs Kolkata Aencies Limited 19 ITR 191(SC): Lakshimaratan Cotton Mills Co. Ltd. Vs. CIT 73 ITR 634(SC), etc. In case expenses are not supported by proper bills and vouchers, reasonable addition can be made out of partial disallowance of expenses, though books of accounts are audited and auditor has not made any adverse comment as held in Goodyear India Ltd. Vs. CIT reported in 246 ITR 116: Khushal Prasad Manohar Vs. CIT 236 CTR 193(C.G.); Asstt CIT Vs Agility Logistics P Ltd. (2012) 19 taxman.com 159/136 ITD 46 (Mum); ACIT Vs. Niko Resources Ltd. (2009) 123 TTJ (Ahd) 310 etc. Considering the deficiency as pointed out, the counsel for the assessee agreed for lump-sum disallowance of Rs. 6,00,000/- to cover up these leakages.

Aggrieved with the assessment order, the assessee filed belated appeal (4 years & 28 days) before the Ld. CIT(A), who did not admit the appeal as he was not satisfied with the reasoning offered by the assessee for filing appeal with the delay of 4 years & 28 days. Consequentially, the Ld. CIT(A) dismissed the appeal. Aggrieved, the assessee is before us.

Before us, the assessee had filed adjournment application, which was not acceded to. Therefore, we heard Shri Ch. Rajeswara Reddy, Ld. Sr. DR who argued the case vehemently. The Ld. Sr. DR, drawing our attention to the delay condonation petition filed by the assessee before the Ld. CIT(A) (as extracted at page No. 2 to 4 of the impugned order), contended that the Ld. CIT(A) was justified in not admitting the appeal as there was no sufficient cause for the said delay particularly when the assessee had filed appeals for AYs 2012-13 to 2015-16 and AYs 2018-19 and 2019-2020 against orders/processing finalized/done after reopening the case as a result of survey on 26.02.2016 or ITRs of subsequent years . within the stipulated time before the Ld. CIT(A). He prayed for the dismissal of the appeal.

We have heard the Ld. DR and have perused the record. We have gone through the condonation petition of the assessee filed before the Ld. CIT(A) [duly extracted in the impugned order] and we do find any infirmity in the finding of the Ld. CIT(A) that the said condonation petition does not cull out the sufficient cause for filing the appeal with extra ordinary delay of 4 years & 28 days. We find that the assessee has not brought out a case before the Ld. CIT(A) that the said delay of 4 years & 28 days is justified. The condonation petition filed before the Ld. CIT(A) does not demonstrate that the said delay of 4 years & 28 days has taken place in good faith and is beyond control of the assessee. The said extra ordinary delay of 4 years & 28 days is also not found reasonable. Accordingly, we decline to interfere with the order of the Ld. CIT(A). The appeal of the assessee is thus, dismissed.

In result, the appeal of the assessee stands dismissed. Order pronounced in the open court on 25/05/2026. (PARTHA SARATHI CHAUDHURY) (AVDHESH KUMAR MISHRA) "ाियक सद" / JUDICIAL MEMBER लेखा सद" / ACCOUNTANT MEMBER रायपुर / Raipur; िदनांक Dated 25/05/2026 HKS, PS आदेशकी "ितिलिप अ"ेिषत / Copy of the Order forwarded to : 1. अपीलाथ"/ The Appellant

""थ"/ The Respondent

The Pr. CIT, Raipur (C.G.) 4. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 5. गाड" फाईल / Guard file.