The present Appeal by the Revenue under section 260-A of the Income Tax Act, 1961 is directed against the common order dated 21.01.2011 of the Income Tax Appellate Tribunal, Ahmedabad(C) in ITA No. 1838 & 1839 of 2009 in so far as the said common order relates to ITA No. 1838 of 2009. 1.1 The appellant has raised the following questions proposing it to be a substantial question of law :
“(A) Whether the Appellate Tribunal is right in law and on facts in deleting the disallowance of Rs. 7,20,000/- made by Assessing Officer on account of purchases from Nirav Traders?
(B) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 6,80,030/- made by Assessing Officer on account of labour payment?”
2. We heard Mr. Varun K. Patel for the Appellant.
3. The Assessing Officer made two disallowances while assessing the income of the respondent-assessee for the Assessment Year 2003-2004. The first was of Rs. 7,20,000/- in respect of purchases made from one Nirav Traders. The second disallowance for Rs. 6,80,030/- was on the count of labour charges paid. According to the Assessing Officer, the genuineness of the transaction with Nirav Traders was not proved. As regards the amount paid towards labour charges, it was observed by the Assessing Officer that the identity of the person concerned was not proved.
3.1 In the appeal of the assessee, the Commisioner of Income Tax (Appeals) held that the purchase of cement from Nirav Traders was by account payee cheque and that the party was a small contractor, who had closed his business. The assessee, therefore, could not produce the party in spite of best efforts. It was also noted by the CIT(A) that the purchase of cement was at reasonable rate compared to the rates paid to other parties. He, however, confirmed disallowance of 10% to the extent of Rs. 72,000/-, and thereby partly allowed the ground of the assessee. With regard to the labour payment disallowed by the Assessing Officer, the CIT(A) was of the view that there were sufficient documentary evidence in the nature of election card, driving liscence, ration card, confirmation of ledger account etc. by which the genuineness of the transaction was proved . The disallowance came to be deleted by him.
3.2. The Tribunal dismissed the appeal of the Revenue and confirmed findings of the appellate Commissioner holding that the Commissioner had properly considered the material before it on both the issues.
4. With regard to the disallowance on account of purchase from Nirav Traders, the Tribunal observed as under :
“The learned CIT(A) found that rates of the cement purchases from “NT” is almost the same as compared to be purchase rates of other traders. The purchase bills were produced and all the payments have been made through account payee cheques. No evidence is brought on record that the purchase price paid to the above returned to the assessee. The learned CIT(A) was therefore justified in deleting the substantial addition on the above issue.”
5. Similarly, in respect of the second addition, the Tribunal arrived at following findings of its own :
“The assessee could file only copy of the account, the AO accordingly disallowed the above payment. It was submitted before the learned CIT(A) that copy of the account alongwith confirmation of the parties and complete details of the payment and tax deducted from payments made to them have been filed. Copy of the bank account showing the details of the payments through banking channel was filed to show genuineness of the payments being made. It was further submitted that copy of election card, bills for purchases of bricks, site report of delivery of bricks, vouchers, ledger account etc. were filed to prove identity of the above person along with their addresses, phone numbers etc.
and the payments were made through demand draft and regarding identity of Jugdish Sathwara, complete details were filed and payments were made by cheques from Global Trust Bank on which TDS was also deducted. The learned CIT(A) on examining the above details found that the assessee made genuine transactions with these three parties and all the payments were made through banking channel. Thus, the assessee proved genuineness of the payment, which have been supported by the details.”
6. The confirming findings recorded by the Tribunal were based upon the facts and material relevant to the issue before it. They were findings of facts and in the realm of appreciation. When the findings are factual in nature and properly arrived at, and when they are in no way perverse, no interference is called for in the present appeal. No substantial question of law arises for consideration.
7. Accordingly, the appeal is dismissed.
[V.M.SAHAI, J.]
[N.V.ANJARIA, J.]
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