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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
Before: SHRI G.S. PANNU (AM) & SHRI RAM LAL NEGI (JM)
O R D E R
PER RAM LAL NEGI, JM
This appeal has been filed by the revenue against order dated 29/03/2016 passed by the Ld. Commissioner of Income Tax (Appeals)-44, Mumbai, for the assessment year 2009-10, whereby the Ld. CIT (A) has allowed the appeal filed by the assessee u/s 143 (3) read with section 263 of the Income Tax Act, 1961 (for short ‘the Act’).
Brief facts of the case are that the assessee proprietor of M/s Pankti Enterprises engaged in the business of civil construction, filed its return of income declaring the total income of Rs. 54,13,350/-. The return was processed u/s 143(1) of the Act. Since, the case was selected for scrutiny assessment was completed u/s 143(3) of the Act determining the total income at Rs. 64,98,303/-. Thereafter an order u/s 263 of the Act was passed and the 2 Assessment Year: 2009-10 AO was directed to inter alia verify the sub contract payment of Rs. 42,20,568/- made to Nagesh C Putpak and Rajbhai Ganeshbhai Patel. The AO accordingly issued notice u/s 142(1) of the Act and in response thereof the authorized representative of the assessee attended the proceedings from time to time and submitted the details called for. The AO after hearing the assessee inter alia made addition of Rs. 42,20,568/- as inflated/bogus labour expenses and determined the total income of the assessee at Rs. 1,35,96,580/-.
In the first appeal the Ld. CIT(A) allowed the appeal of the assessee and deleted the addition under challenge in this appeal.
Aggrieved by the order of Ld. CIT (Appeals), the revenue has preferred this appeal before the Tribunal on the following effective ground:-
On the facts and in the circumstances of the case and in law, the ld. CIT (A) erred in deleting an addition of Rs. 42,20,568/- made by the AO as inflated/bogus labour expenses.
This case was fixed for hearing on 25.10.17. When the case was called up for hearing none appeared on behalf of the assessee. We noticed that the Ld. CIT(A) has allowed the appeal of the assessee by following the order of the ITAT Mumbai rendered in the assessee’s own case for the assessment year 2008-09, we decided to dispose of the appeal on the basis of the material on record after hearing the departmental representative (DR)
Before us, the Ld. DR relying on the assessment order passed by the AO submitted that the Ld. CIT(A) has wrongly deleted the addition made by the AO as the findings of the AO are based on the evidence on record. Since, the assessee failed to discharge the burden of proving the genuineness of transaction and only submitted that the expenses should be treated as genuine the AO has rightly made the disallowance in question. On the other hand the 3 Assessment Year: 2009-10 Ld. CIT(A) has deleted the addition by following the decision of the tribunal in assessee’s case for the assessment year 2008-09. Hence, the impugned order is liable to be set aside.
We have carefully gone through the material on record. We notice that the in the Assessment year 2008-09, AO had disallowed the similar payments made under the head labour charges to to Nagesh C Putpak and Rajbhai Ganeshbhai Patel. In the first appeal the Ld. CIT(A) deleted the addition. Against the said order the revenue filed the second before the ITAT and the ITAT confirmed the action of the Ld. CIT(A). The Ld. CIT(A) has passed the impugned order by following the decision of the ITAT. The operative part of the CIT(A) order reads as under:
4.1 I have considered the facts of the case and I have also carefully gone through the assessment order and the orders of the CIT (A) for AY 2008-09 and AY 2010-11 where similar issued were decided in favour of the appellant. I have also gone through the order of the Hon’ble ITAT in appellants own case for AY 2008-09. I have also perused the written submissions of the AR. After considering the totality of the facts I am of an opinion that the issue of payment of labour charges made to Shri Nagesh C Putpak and Shri Rajbhai Ganeshbhai Patel has been conclusively decided in favour of the appellant by the ITAT. In this situation, the ground of appeal no. 1 is allowed and addition of Rs. 42,20,568/- is deleted.
8. Since, under the similar set of facts the tribunal has decided the identical issue in favour of the assessee in assessee’s own case for the assessment year 2008-09 and the Ld CIT(A) has passed the order under challenge by following the order of the coordinate Bench, we do not find any reason to interfere with the decision of the Ld. CIT(A). We, therefore, uphold the 4 Assessment Year: 2009-10 decision of the Ld CIT(A) and dismiss the sole ground of the appeal of the revenue. In the result, appeal filed by the revenue for assessment year 2009-2010 is dismissed.