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TMI Blog2021 (12) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... since enquiry has not been conducted under Section 133(6) of the Act, therefore, he came to the conclusion that no enquiry has been done by the Assessing Officer. First of all, nowhere the ld. PCIT has disputed the details which were available on assessment record placed before him. If the job work payment is supported by bills and vouchers and has been made through banking channels, that is, the payments were made through account payee cheques and also confirmed by the parties, then where was the question that these are non genuine. Most importantly, the entire payment is reconciled with the TDS certificates as all the payments were subject to TDS u/s 194C. The job work in the form of labour are done on the different locations and once the project is completed, the workers move out to different places or migrate back their homes and, therefore, it is impossible to get their current addresses so as to enable the Assessing Officer to issue notice under Section 133(6) of the Act, which actually would have been completely futile exercise. Mere saying that failure to issue notice under Section 133(6) by the Assessing Officer to the labourers, the assessment order is erroneous and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Large other Expenses claimed in the P L Account; 2. Mismatch in sales turnover reported in audit report in ITR; 3. Mismatch in amount paid under Section 40A(2)(b) in audit report and ITR. 4. The ld. Assessing Officer after calling for the details on the points on which the case was selected for scrutiny and in response to which assessee has filed its detailed reply along with the evidences and books of accounts. After examining all the details, which were called for from time to time, return of income was accepted vide order dated 12.10.2017 passed under Section 143(3) of the Act. 5. Thereafter the ld. PCIT in his jurisdiction under Section 263 of the Act issued a show cause notice dated 28.05.2018 raising five distinct issues, which are as under:- 1. Large other Expenses claimed in the P L Account; 2. Payment to related parties u/s 40A(2)(b); 3. Other Current Liabilities; 4. Payment to contractors; and 5. Stamp duty paid. 6. In reply to the show cause notice the assessee submitted a detailed reply and rejoinder. Apart from that it was submitted that except for first issue of large expenses claimed under profit and loss account, the other issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny enquiries or verification which should have been made before allowing the claim of other expenses which is approximately 9.32% of the total sales turnover this year. This other expense amount is almost 1048%of this year s net profit of ₹ 6,67,17,547/-. The AO has neither examined the genuineness of these expenses nor examined its nature I.e. whether exclusively or wholly for the purpose of business under section 37(1) of the IT Act. The main reason for selection of scrutiny in CASS remained unexamined. The assessment order may be treated as erroneous so far as prejudicial to the interest of revenue. 8. Further on the issue of payment made to the contractors the query raised in the show cause notice was as under:- 4. Payment to Contractors: In the Audit report, Form 3CD, Column No: 34(a), the assessee has shown ₹ 10,82,64,245/- as payment to contractors (as job work) and deducted TDS on it u/s 194C @1% for ₹ 11,26,586/-. But on perusal of the confirmations submitted by the assessee for the payment, it was found that the payment of these job works has either been paid to a firm or to a company but not to any individual of HUF. Therefore, the TDS sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer has made any adequate and proper enquiry. Accordingly, he set aside the assessment order to make fresh assessment on this issue. 11. Before us, the ld. Counsel for the assessee referred to the various questionnaires and replies and the details filed before the Assessing Officer during the course of assessment proceedings especially with regard to the job work charges and so the validity for allowability of the same. It was only after detailed scrutiny of these details including TDS certificate, bills and vouchers; the Assessing Officer had accepted the payment of job charges. No where the PCIT had disputed that these details have not been filed in the course of assessment proceedings. Party-wise details were submitted along with the copies of bills matching with the TDS certificate on each and every job work payment and confirmation by the parties. Further all the payments were made by account payee cheques and was also brought on record and explained that job work entities and civil construction works are done by the petty workers and civil job specifically and do not have any permanent address once the project is completed. Because then they are shifted to other p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records and argued before him through the submission, remained unconsidered in the impugned order. Thus, it is obvious that the material brought by the assessee for the consideration of Ld. CIT have not been fully factored in by the Ld. CIT; and the Ld. CIT has not fully dealt with the entire force of assessee's submissions before making an adverse decision against the assessee. Moreover, the Ld. CIT has observed in a cryptic, summary and nonspeaking manner in aforesaid order dated, that the AO had not conducted requisite enquiry/investigation on the job work claimed without dealing with submissions made and materials placed by the assessee before the Ld. CIT vide aforesaid Letters as per foregoing paragraphs. The Ld. Pr. CIT, on the futility of the enquiry in the manner desired by him, did not consider the merits of submission by the appellant and rather dismissed the same in very opaque manner stating that the appellant cannot step into the shoes of the AO (para 5 page 8 of the impugned order). But the authority failed to point out any error in the approach adopted by the AO. It is important to note that no error in the order under revision was pointed by the Ld. CIT when in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other hand, the Ld. DR strongly relied upon the order of the ld. PCIT and submitted that here there were 27 parties from whom assessee had done job work and transaction is of more than ₹ 10.87 crores which at least required prima facie enquiry by the Assessing Officer. Even on test-check basis which has not been done and, therefore, such an order is prejudicial to the interest of revenue. The order of the learned Pr. CIT should be confirmed and the Assessing Officer should conduct proper enquiry before accepting the claim of the assessee. 16. We have heard the rival submissions and also perused the orders of the lower authorities and also various relevant findings in the impugned order as well as material placed on record. The only issue on which the ld. CIT set aside the assessment order is with regard to the payment of job work charges for a sum of ₹ 10.87 crores. From the assessment record as placed in the paper book, it is seen that the Assessing Officer has raised specific query with regard to the job work payment and asked for the details including the bills as well as the TDS deducted on every payment. In response the assessee had filed party-wise details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e done on the different locations and once the project is completed, the workers move out to different places or migrate back their homes and, therefore, it is impossible to get their current addresses so as to enable the Assessing Officer to issue notice under Section 133(6) of the Act, which actually would have been completely futile exercise. Mere saying that failure to issue notice under Section 133(6) by the Assessing Officer to the labourers, the assessment order is erroneous and prejudicial to the interest of revenue de-hors the nature of business activity carried out by the assessee cannot render the assessment order erroneous and prejudicial to the interest of revenue. Nowhere Ld. CIT has, stated that how can notice under Section 133(6) can be served on the labour force who are mobile and having no permanent address. If the payments had been made through cheques after deduction of tax under Section 194C of the Act and is in consonance with the percentage of payment made in the earlier years stands accepted, then there is no reason to doubt the payments and we do not find any reason as to why such payments can be said to be non-genuine. The ld. PCIT has not brought any reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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