SHREE SANTOSHIMATA MAJOOR SAHAKARI SANSTHA,PEN vs. INCOME TAX OFFICER, PANVEL

After considering the reply of the assessee, Ld. CIT(A)/NFAC dismissed the appeal and confirmed the order passed by the Assessing Officer. It is this order against which the assessee is in appeal before this Tribunal.

5. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR further submitted before the Bench that the Assessing Officer has relied on the statement made by the Chairman of the cooperative society. In this regard, Ld. AR submitted that the Chairman of the assessee society is an uneducated person and the society itself is meant for the benefit of labourers and the members of the society are also labourers and the labourers have selected one of the labour as Chairman. It was further submitted by Ld. AR that the Chairman does not know anything about the books keeping and accounts books and due to ignorance the statement was made during the course of hearing of the case and during the assessment proceedings. Ld. AR further submitted before the Bench that the assessee cooperative society executed civil contract work allotted by the State of Maharashtra & during its execution members of the society have worked as labourers, however they worked under sub contractors guidance, accordingly collective disposal of labour was achieved. The total payments were received in their bank accounts since the same was transferred by the State Government. It was also submitted that the contract work allotted by the State Government were completed within time limit provided by the respective Government Department. The work completion certificates were also issued by the respective Department to the assessee cooperative society. It was contended before the Bench that if certain contract work/civil work was completed the same could not have been completed without the involvement of material such as Iron steel, Cement, Sand, Murum, Boulders etc. It was submitted that except Iron steel and Cement, rest of the material were purchased from unregistered dealers who are small vendors situated near the site of the contract work, many of them do not have bank accounts or even the VAT registration number since their turnover was below the threshold limit. Ld. AR submitted before the Bench that in support of its contentions, the assessee in his paper book has produced copy of audited financial statements along with audit report duly signed by Chartered Accountant u/s 44AB of the Act, bank statements including the works completion certificate issued by the Architect and copy of running bills approved by the State Government, PWD Department are also annexed in the paper book. All the payments towards the purchases of building material was not made on one day, all the payments were made on various dates in part-part i.e. less than Rs.20,000/-. Secondly, it was also submitted by Ld. AR that if it is presumed that the purchases are bogus then it will also be deemed that no contract was executed by the assessee, but it would be wrong presumption since the contract work allotted by the State Government was executed and on its completion the payment was duly received in the bank accounts which proves that the material was also used in the execution of above contracts and therefore, it would be genuine hardship on the assessee if his purchases are treated to be bogus. It was also submitted by Ld. AR that the deduction u/s 80P(2)(a)(vi) was also rightly claimed by the assessee since the contract work were executed with the help of members of the assessee cooperative society, who also happens to be the labours. Accordingly, it was prayed by Ld. AR that deduction u/s 80P(2)(a)(vi) & 80P2(c)(ii) may kindly be allowed and the purchases disallowed u/s 40A(3) may kindly be allowed.