Ramesh Harbibhau Gawliage: Major, Occu.: Business v. The Income Tax Officer,Ward

ITA-29-2019.odt IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABAD INCOME TAX APPEAL NO.29 OF 2019 Ramesh Harbibhau GawliAge: Major, Occu.: Business,R/o. 107, Samartha Apartments,Swami Samartha Mandir,Ahmednagar (M.S.)... Appellant Versus The Income Tax Officer,Ward-1, Ahmednagar. .. Respondent … Mr. R. M. Sharma, Advocate for the appellant.Mrs. Kalpalata Patil Bharaswadkar, Advocate for respondent – State. ... CORAM : SMT. VIBHA KANKANWADI AND S. G. CHAPALGAONKAR, JJ. DATE : JANUARY 04, 2024. ORDER [Per Smt. Vibha Kankanwadi, J.] :- .Present appeal has been filed under Section 260-A of Income Tax Act,1961 to challenge the order dated 11.04.2018 passed by the Income TaxAppellate Tribunal, Pune in ITA Appeal No.1013/PUN-2015 for theAssessment Year 2010-2011 arising out of order dated 30.01.2015 passedby C.I.T.(A-2, Pune) against the Assessment order under Section 143(3) ofthe Income Tax Act passed on 20.03.2013 by Assessing Officer i.e. IncomeTax Officer, Ward-1, Ahmedngar. ITA-29-2019.odt 2.Heard learned Advocate Mr. R. M. Sharma for the appellant andlearned Advocate Mrs. Kalpalata Patil Bharaswadkar for the respondent, atthe stage of admission. In order to cut short, it can be said that both thelearned Advocates have made submissions in support of their respectivecontentions. 3.The appellant contends that he is a contractor undertaking civil workas a construction contractor. He had declared his income in his returns ofincome for the assessment year 2010-2011 at Rs.14,50,480/-. It wasselected for scrutiny. After receiving the notice, the relevant information inrespect of books of account etc. furnished by the appellant. After scrutiny,the Income Tax Officer passed assessment order on 20.03.2013 anddisallowed the expenses to some extent and the income was determined atRs.2,85,15,890/-. It was challenged by the appellant in AppealNo.PN/CIT(A)-2/ITO wd-1 An/An/77/2014-2015. His appeal was partlyallowed and some relief was granted to him by order dated 30.01.2015.The other grounds were not considered and, therefore, he further preferredappeal to Income Tax Appellate Tribunal, Pune. During the pendency of theappeal, separate additional ground was incorporated in the appeal inrespect of disallowance of payment of Rs.2,24,63,228/- as it was stated thatthere never existed any relationship between the appellant and the payeeas contractor and sub-contractor. Learned Income Tax Appellate Tribunal, ITA-29-2019.odt Pune partly allowed the appeal on 11.04.2018 and hence, this appeal. 4.The record which has been produced by the appellant would showthat he has tried to contend that he has made certain payments to the subcontractors and it has been shown as expenses. Further, he has also notdeposited the TDS. Certain expenses are not connected to the contractundertaken. It was tried to be demonstrated on behalf of the petitionerthat how these expenses are connected to the contract, which he hadundertaken. It was submitted on behalf of the petitioner that the matterneeds to be admitted, as it is raising substantial question of law. 5.The first and the foremost fact to be noted is that the present appealhas been filed under Section 260-A of the Income Tax Act. Sub-section (1)of Section 260-A of the Income Tax Act provides that an appeal shall lie tothe High Court from every order passed in appeal by the AppellateTribunal, if the High Court is satisfied that the case involves a substantialquestion of law. Only after arrival of the conclusion that the appeal involvesa substantial question of law, then as per sub-section (3) of Section 260-Aof the Income Tax Act, this Court needs to formulate the said substantialquestion of law. It is the bounden duty of the appellant approaching thisCourt under Section 260-A of the Income Tax Act to show the substantialquestion of law. The substantial question of law, which the appellant hastried to formulate, is totally based on the fact. It is his contention that the ITA-29-2019.odt genuine expenses have not been considered and allowed to be shown. Thethree authorities in this case have considered the books of accounts and theexplanation given by the appellant and have come to the conclusion thatthose expenses are not connected and cannot be allowed. 6.Here, if we consider the order passed by the Assessing Officer, it canbe seen that initially the notice under Section 143(2), 142(1) along withthe questionnaire dated 21.08.2012 was not even responded by theappellant. Time and again, notices have been issued to the appellant and itappears that he has responded partly. The appellant had undertaken civilcontract from two companies and the work was widening andstrengthening of existing road, repairing widening of road side shouldersetc. and in that connection the purchases were shown at Rs.15,49,684/-.Then it was stated that there was sub contract of Rs.2,24,63,228/- and theTDS liability was Rs.2,41,846/-. The list of subcontractors went upto 25persons and it appears that he had deliberately avoided to furnish thedetails of subcontractors. Each and every entry appears to have beenconsidered by the Assessment Officer. Being dissatisfied with theassessment order, when the petition was preferred, the first appellateauthority had partly allowed the appeal and genuine expenses wereconsidered. Reasoned orders have been given as to why they have beenconsidered and why they have not been considered. Again the appeal was ITA-29-2019.odt preferred by the appellant before Income Tax Appellate Tribunal, Pune.After giving hearing to the appellant, that appeal has also been partlyallowed. Few more expenses were allowed to be shown as expenses, butwhat has been disallowed is that the parties in whose names the chequeswere alleged to be issued by the appellant have deposed on oath that thesignature on the back side of the cheques and the rubber stamps were notof their business establishments and they have neither encashed thecheques from the bank, nor received the amount from third parties i.e. tothe extent of Rs.13,10,000/- as it was claimed by the appellant that he hasspent that amount on purchase of marble. It was found that the expensesincurred were bogus expenses. We have made inquiry with the learnedAdvocate for the appellant as to why the marble was purchased forconstruction of roads. He made a submission that the appellant has madethe construction/repairing work of the office of the highway authority,where the marble has been put. In fact, we could not find any suchdocument on record, which showed that contract of construction of suchoffice was also given to the appellant. Certainly, the said expenses appearto be not connected to the work undertaken and, therefore, it has been saidto be the bogus expenses. Further, as regards the additional ground thatwas raised, by a reasoned order, learned Income Tax Appellate Tribunal hasconsidered it to the extent of Rs.1,45,00,000/- (rounded off only) and it isrightly to be so as it covered the partly allowed claim of the appellant by ITA-29-2019.odt learned CIT(A) and taking into consideration the TDS deposited by theassessee on 15.10.2010 but the amount was debited from the bank accountof assessee on 20.10.2010, it came to be partly allowed and, therefore, it issaid that it is the part claim, but that part which has been granted is infavour of the appellant. A reasoned order has been passed for allowing ordisallowing the claim of the appellant. There is no question of substantialquestion of law when all the facts have been considered and, therefore, asno substantial question of law is arising, the appeal deserves to bedismissed at the admission stage. Accordingly, the appeal stands dismissed. [ S. G. CHAPALGAONKAR ] [ SMT. VIBHA KANKANWADI ] JUDGE JUDGE scm