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The Commissioner of Income Tax, The Asst. Commissioner of Income Tax Versus M/s. Hasan Hajee And Co.

2015 (7) TMI 536 - KARNATAKA HIGH COURT

Enhancement of tax liability - payments made to sub-contractors through cheque a sum of ₹ 2,70,70,745/- ITAT allowed the appeal of the assessee in part - Held that:- The Appellate Tribunal while deciding the appeal, has casually proceeded to sustain the order passed by the Assessing Officer. None of the major points decided by the Appellate Commissioner are answered by the Tribunal while setting aside the order passed by the Appellate Commissioner. Though the order passed by the Tribunal r .....

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cess, no prejudice would be caused to either of the parties. - ITA No. 450/2009 - Dated:- 1-6-2015 - Mohan M Shantanagoudar And Aravind Kumar,JJ. For the Petitioner : Sri Jeevan J Neeralgi, Standing Counsel For the Respondents : Sri S Parthasarathi, Adv., along with Smt Jinitha Chatterjee & Sri V K Gurunathan, Advs JUDGMENT This appeal is filed by the Revenue questioning the order dated 30.4.2009 passed by the Income Tax Appellate Tribunal, Bangalore Bench 'A' in ITA No.947/Bang/08 ( .....

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o engaged would be made by cheques to NMPT and in turn NMPT would disburse the wages to the workers. Case of the assessee is that as the registered labour force at NMPT did not agree to work beyond the limit fixed by them, the assessee had engaged the services of the private workers and had made payment in cash to the extent of ₹ 1,17,59,931/- and through cheques to sub-contractors to the extent of ₹ 2,70,70,745/-; the payments were made through self made vouchers. According to the a .....

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The Assessing Officer allowed the contention of the assesee insofar as it relates to payment through cheque to the NMPT Union and sub-contractors. However, the Assessing Officer has disallowed the claim of the assessee to the extent of 20% in respect of cash payment to gang leaders as mentioned supra, which means the Assessing Authority allowed the claim of the assessee to the extent of 80%. Questioning the order passed by the Assessing Authority, the assessee filed appeal No.ITA/174/ CIT(A)/MNG .....

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However Appellate Commissioner affirmed the order passed by the Assessing Officer insofar as it relates to speed money paid to various gang leaders in cash. The order of the Appellate Commissioner is carried further by the assessee before the Income Tax Appellate Tribunal, Bangalore Bench 'A' in ITA No.947/Bang/08 by filing the appeal. The Income Tax Appellate Tribunal by its order dated 30.4.2009 allowed the appeal of the assessee in part and restricted the addition to the extent of &# .....

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Authority is unsustainable to the extent mentioned supra. To verify the genuineness of the payments made by the assessee to the sub-contractors through cheques, summons under Section 131 of the Income Tax Act issued to all the sub-contractors mentioned in the assessment order and their statements recorded on oath by the Assessing Officer also came to be examined. It came to be noticed by the Appellate Commissioner that all the sub-contractors have stated that they have carried loading and unload .....

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ere made available to the Financial Advisor and Chief Accounts Officer, NMPT, Mangalore for getting reports. The details received from NMPT, Mangalore when compared with the details which the assessee has made available before the Appellate Commissioner fully tallied with each other in terms of date, item and quantity in metric tons. In other words, the entire cargo was handled by the assessee with the help of NMPT labour, for which assessee has paid a sum of ₹ 2,53,29,660/- by cheque. Hen .....

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that the details furnished by the assessee tallied with the details furnished by NMPT and hence the assessee was asked to explain as to whom payment of ₹ 2,70,70,745/- had been made and for what service. It is also found by the appellate Commissioner that all the statements of subcontractors recorded by the Assessing Officer are of stereo type and same 18 questions were asked by the Assessing Officer to all the sub-contractors and all of them have given identical replies. Virtually, it me .....

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unts and other details are not available to know the total number of labourers engaged etc., It is also admitted by the sub-contractors that they have not maintained any records to show as to how much payments were made to the labourers. It is further admitted before the Assessing Officer that they have not maintained any evidence like vouchers, receipts in respect of payments made to the labourers etc., Regarding payment to individual labourers, no details are maintained. There is no written ag .....

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to the same, the Tribunal, on facts has found that the Appellate Commissioner did not find availability of any big labour force which can be engaged by assessee or any other cargo handling concern for the business. It is found that NMPT labour is so organized and strong that they would not allow any private subcontractors to carry on the work and receive the huge payments as indicated by the assessee in this case. It is also found by the appellate Commissioner that even the nature of work and i .....

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