High Court Of Rajasthan : Jaipur Bench
CIT vs. Girnar Construction Company
Sections 32(1), 37(1), 40A(2)
Asst. Year 1990-91
Y.R. Meena & A.C. Goyal, JJ.
IT Appeal No. 27 of 1999
8th February, 2002
Counsel Appeared
J.K. Singhi with Anuroop Singhi, for the Petitioner : Vijay Choudhary, for the Respondent
JUDGMENT
BY THE COURT :
The appeal was admitted in terms of the following questions :
“1. Whether the provisions of s. 40A(2)(b) are applicable in the present matter where the salaries/payments were made to the close relatives of partners of the assessee-firm ?
Whether the AO is bound to admit the entries made in the cash books even it their genuineness is doubted and further is it necessary for the AO to first reject the cash books, purchase vouchers and expenses bills, etc. even if he disagrees with the same for the purpose of making addition or for rejecting the claim of assesseefirm?
Whether the learned Tribunal was right in its wisdom to allow the claim of Rs. 2,13,000 on account of depreciation in new bodies even if the bills for the same were not produced and in spite of its expenditure written on letter-head that too without any sales-tax number on it was produced ?
Whether the impugned order passed by the learned Tribunal suffers from perversity of law and facts or not ? Whether Tribunal was right in its wisdom to allow deletion of disallowance of Rs. 1,16,000 out of salary and Rs. 28,341 out of diesel and oil consumption ?
Whether the law declared by the Hon’ble Supreme Court in a reported case Workmen, Associated RubberIndustry Ltd. vs. Associated Rubber Industry Ltd. (1985) 48 CTR (SC) 355 : (1986) 157 ITR 77 (SC) and McDowell & Co. Ltd. vs. CTO (1985) 47 CTR (SC) 126 : (1985) 154 ITR 148 (SC) does not have important bearing in the present case ?”
The assessment year involved is 1990-91. The assessee is a registered firm, deriving its income from building, trucks/dumpers on hire/rental basis. The assessee-firm has filed its return on 27th Aug., 1990. According to the AO the books of accounts are not supported by bills and vouchers and even salary has been paid to close relations, which is hit by provisions of s. 40A(2)(b) of the Act. Question No. 1 relates that was disallowed by the AO, therefore, the salary paid to Shri Sumati Kumar and Shri Padam Kumar i.e., their relatives and the salary paid to them is unreliable. The finding of the Tribunal is that the salary has been paid for work which Shri Sumati and Shri Padam Kumar has done for the assessee. Though they are relatives but Rs. 1,000 per month to a person for the work they have done in our view cannot be said to be unreliable. Otherwise, also that finding of fact of the Tribunal that salary paid to Sumati and Padam Kumar is for the purpose of business and accounted for it cannot be said unreliable in the facts and circumstances of the case. The next issue relates whether the Tribunal has wrongly allowed depreciation on the new bodies’ of the dumpers in the tune of Rs. 2,13,000. Learned counsel submits that whether the new bodies were built up of the dumpers, no evidence has been shown except a receipt on the letterhead. Learned counsel for the assessee submits that receipt of the body builder has been submitted though on the letter-head but thereafter M/s Vishwa Karma Truck Body Repairs who did this job was examined and he accepted that he has done the work of body building of the dumpers and trucks and received the amount against them. Whether the new body was built by M/s Vishwa Karma Truck Body Repairs or not that is basically a question of fact and on finding of facts and the material on record, it cannot be said that finding of fact is perverse.
No interference is called for. Similarly, assessee has claimed for salary payment to drivers, cleaners and staff after comparing the net profit in the earlier year. The AO has disallowed Rs. 1,16,000 against these expenses on estimate basis making this the net profit of this year with the earlier year. In appeal the Tribunal has considered the fact that without rejecting the books of accounts and specially when the statement of 6 persons were recorded regarding payment of salary who confirmed that the payment has been made to them on account of salary merely on the basis of net profit no disallowance be made, in para 6, the Tribunal has concluded its finding. When the employees had filed affidavit confirming the payment of salary, they have given the details of dumpers and trucks on which they are working. Similarly, the net profit is lesser than the earlier year cannot be made base for any disallowance on account of the salary paid to the employees. No interSimilarly, the AO has disallowed Rs. 28,341 in diesel and oil account. Whether the diesel and oil was consumed in the trucks and dumpers of the assessee when that has been fully supported by the vouchers and confirmed and that has been amended in the books of accounts, when books of accounts has not been rejected. In our view there is nothing wrong in the order of the Tribunal in deleting the addition of Rs. 28,341. Considering the finding of the Tribunal and material on record, it cannot be said that the finding of the Tribunal is perverse. When the finding of the Tribunal is not perverse on the facts, no interfere is called for in the order of the Tribunal. In the result there is no merit in the appeal. Appeal stands dismissed.
[Citation : 261 ITR 463]
