IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 1039 of 2011 For Approval and Signature:
HONOURABLE MR.JUSTICE V. M. SAHAI HONOURABLE MR.JUSTICE N.V. ANJARIA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================================= THE COMMISSIONER OF INCOME TAXVI - Appellant(s) Versus SIDDHANT J PAVASIA - Opponent(s) ========================================================= Appearance :
MRS MAUNA M BHATT for Appellant(s) : 1, None for Opponent(s) : 1, =========================================================
CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI
and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 01/08/2012 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE V. M. SAHAI)
1. We have heard Mrs. Mauna Bhatt, learned counsel appearing for the Revenue in this Tax Appeal. This Tax Appeal was admitted on the following question of law:
“Whether the Tribunal is right in law and on facts in deleting the addition made on account of non-genuine labour payment of Rs.44,03,271/-”
2. The Assessing Officer has made additions with regard to labour payment treating them to be non-genuine payment. The assessee filed an appeal and in appeal the CIT(A) deleted the additions by order dated 29.10.2007. The Revenue filed second appeal before the Tribunal and the Tribunal has confirmed the view taken by the CIT(A) by observing as under:
“The assessee filed complete details of job charges paid to various parties for doing the work for the business of the assessee. In this case, the AO disallowed cash labour payments made to certain parties in a sum of Rs.44,03,271/- out of total payment of Rs.2,56,14,209/-. The assessee received labour charges @ Rs.325/- per carat for doing the job work of 85416.10 net carat. The same quantity of the carat is further given to the job workers for doing job work and payment of Rs.300/- per carat is made. The AO did not dispute the receipt of Rs.325/- per carat by the assessee and also did not dispute the payment of Rs.300/- per carat by the assessee to various job workers. The assessee claimed that substantial payments have been made through banking channel which has not been disputed but only cash payments has been disputed by the AO. The details pointed out by the learned Counsel for the assessee would reveal that the AO disallowed cash payments made to some of the parties @ Rs.300/- per carat to whom the payments through banking channel have also been made @ Rs.300/- per carat. It would show that the parties to whom cash payments have been made are genuine parties and thus there was no reason to disallow the cash payments made to them. There is thus no dispute between the quantity of the job work done by the parties and the rate of job charges received by them. The AO has not made out a case of excess or inflated labour payments to the parties. The gross profit shown by the assessee is also reasonable.”
3. We agree with the view taken by the Tribunal. We do not find that the appeal raises any substantial question of law as proposed by the Revenue. This Tax Appeal is concluded on finding of fact and is accordingly dismissed.
(V.M. SAHAI, J.) (N.V. ANJARIA, J.) (SN DEVU PPS)