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Income Tax Appellate Tribunal, I Bench, Mumbai
Before: Shri Mahavir Singh & Shri Rajesh Kumar
This appeal has been filed by the Revenue against the order of the CIT(A)-50, Mumbai dated 30.11.2015 for A.Y. 2011-12.
The only ground taken by the Revenue is against deletion of disallowance of labour charges of `36,32,828/- by CIT(A) without appreciating the fact that notices issued under Section 133(6) were returned unserved and the assessee did not provide the correct address nor did produce the parties for verification.
At the outset we would like to mention that none appeared on behalf of the assessee at the time of hearing nor any application for adjournment was received from the assessee. We therefore proceed to dispose off the appeal after considering the merit and hearing the learned D.R.
The brief facts of the case are that during the course of assessment proceedings the AO noticed that the assessee has debited various expenses
M/s. International Gold Co. Pvt. Ltd. in the Profit & Loss Account for which details were called for. Upon examination of the said details the AO issued notice under Section 133(6) to various parties. However, the notice in respect of labour charges paid to Shri Sunit Ghosh of `36,32,828/- was returned unserved. Thereafter the AO issued show cause notice on 28.02.2014 which was replied by the assessee vide letter dated 07.03.2014 filing various details such as copy of ledger accounts, labour bills, bank statement, extract of the register showing gate pass issued to Shri Sunit Ghosh and TDS certificate issued to Shri Sunit Ghosh and TDS remittance to Government Treasury. The AO, however, not convinced with the genuineness of such expenses added the same to the income of the assessee by treating the same as bogus and non-verifiable by framing the assessment under Section 143(3) vide order dated 29.03.2014 assessing the total loss at `7,69,587 /-.
Aggrieved, assessee went in appeal before the CIT(A). In the appellate proceedings the CIT(A) allowed the appeal of the assessee by observing that the only ground cited by the AO for making the addition was non- service of notice. According to the CIT(A) the AO has not brought on record any cogent evidence which proves that the money paid to Shri Sunit Ghosh as labour charges was not genuine. The learned CIT(A) observed that by filing of necessary documents such as copy of ledger accounts, gate pass, bank statement, conveyance payment and PAN, etc. the assessee has discharges its onus. However, the AO has not done any exercise to verify the said amount. Thus finally the CIT(A) observed that the addition was based on suspicion and accordingly allowed the appeal of the assessee. Aggrieved, Revenue is in appeal before us.
We have heard the learned D.R. and perused the relevant documents placed before us. We find that in this case the assessee has discharged his onus by placing the evidences which the assessee has in possession such as copy of the ledger account, bank statement, gate pass issued to Shri Ghosh, details of TDS and PAN, etc. Thus the primary onus of the assessee was duly discharged. The AO has not done anything to verify such payment or nothing was brought on record to prove that the payment was bogus and M/s. International Gold Co. Pvt. Ltd. non-genuine. Under these circumstances we are in agreement with the conclusion drawn by the CIT(A) that the disallowance is not justified. Thus, the ground taken by the Revenue is rejected.
In the result, the appeal filed by the Revenue is dismissed.