2018 (12) TMI 1503

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....nditures-vis-a-vis print-out of the P&L a/c taken during the survey: Rs.3,16,72,524/- [Ground No.1 a.] 5.1 Assessment order: From the P&L A/c for the period from 01/04/2010 to 08/03/2011 as extracted from Tally Books of Accounts during the course of survey, it is seen that the net profit was computed at Rs. 3,30,71,672.41 whereas Gross profit is computed at Rs. 3,38,02,191.25. From the estimated P/L A/c from 01/04/2010 to 08/03/2011 it is seen that direct expenses of Rs. 1,34,29,371.75 consists of Rs. 69,58,704/-. But it is seen from the P&L A/c for the AY 201-12 submitted by AR that the assessee debited Rs. 3,75,89,900/-, Rs,15,10,320/- & Rs. 1,10,900/- under the head salary salary-uncovered staff & salary (office staff) respectively totalling Rs. 3,92,11,120/-. But as per details mentioned above, total salary debited upto 08/03/2011 was Rs. 69,58,704/-. The AR was asked to clarify as to why salary for the FY 2010-11 relevant to AY 2011-12 had been so high with regard to the alary for the period from 1/4/2010 to 8/3/2011 as extracted from the Tally Books of Accounts during the course of Survey. In reply the AR filed a written submission stating as below: '... .. ....

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..... The assessee has large number of regular, casual and contractual employees. More than one thousands of employees are registered with Employees PF organization and regular contribution is made to PF. Assessee also pays ESI. From page 47 to 129 of the Paper Book contains the copy of ESI return duly submitted by the assessee for the AY 2011-12. The records relating to EPF, ESI, profession tax are external evidences which shows magnitude of man power engage, payment of salary and wages, these have deliberately been ignored by the learned AO just to make huge disallowance by branding a major part of salary as bogus salary. From page 18 to 43 of the Paper Book contains the statement of employees alongwith their Provident Fund number, ESI number, Bank Account number, wherever available and the total amount of salary paid to them. Assessee had shown net profit of 4.84% which is very reasonable considering the nature and size of business of manpower supply, during the previous year. However, learned AO has determined net profit @ 65.09%/. In other words learned AO has made additions equal to 60.25% of gross receipts. These are very high by any standard and is a clear case of inte....

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....sp; Gross Profit c/o   3,38,02,191.25           4,72,31,563.00   4,72,31,563.00   Indirect Expenses   7,81,216.25 Gross profit b/f 3,38,02,191.25   ACCOUNTING CHARGES 33,648.00   Indirect incomes WASHING CHARGES  50,697.41   ADVERTISMEKNT CHARGES 82,343,00         BANK CHARGS 29,744.00         BANK INTEREST 33,305,00         CONSULTANCY CHARGE 24,500.00         ELECTRICITY CHARGGES 34,760.00         ELECTRONICS SGOODS  1,650.00         ENTERTAINMENKT EXPENSES 85,395.75         INSURANCE 2,23,965.00         LAUNDRY CHARGES  6,827.00         MEDICAL EXPENSE  9,787.00         OFFICE EXPENSES  6,294.00         POSTAGE ....

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....hyam Ch. Karmakar WB34783/1141 4112811992 0102010120999000 46,914 13. Sumitra Mistry WB34783/150 4110002265 0102010121040000 42,692 14. TapanMondal WB34783/271 4111044065 0102010120975000 46,594 15. Santosh Kr. Das WB34783/1017 4112695152 0102010120883000 47,518 16. Tamal Mukhari WB34783/1216 4113189554 0102010120968 42,920 17.Abhijit Adhikary WB34783/1309 4113194782 0102010120944 27,738 18. Rumpa Bera WB34783/807 4110291085   13,368 19.Bikash Haldar WB34783/997 4112695141 0102010121651 15,737 20. Deb Kumar Das WB34783/494 4112520552 0102010124584 63,168 21. Susanto Kr. Pandav WB34783/1371 4113224783 0102010125772 15,174 22. Bablu Das (W) WB34783/360 4112503781 0102010124546 31,138 23. Bapi Mondal WB34783/1064 4112705243 0102010124539 48,013 24. Biswajit Saha WB34783/1036 4112697799 0112010124515 45,902 25. Biswanath Kanu WB34783/885 4112656800 0102010124591 31,830 26. Biswanath Kar WB34783/563 4112540036 0102010124508 47,897 27. Chandan Mukherjee WB347....

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.... Tapan Mridha WB34783/1009 4112695154 0102010125048 3,739 Jiban Paul WB34783/1027 4112697800 0102010125024 3,940 Bijendra Paul WB34783/852 4112650623 0102010124956 0 Ajoy Das WB34783/1240 4113189609 0102010125116 0 Prasenjit Gupta WB34783/1151 4112814090 0102010125000 1,589 Anal Kanti Mondal WB34783/1162 4112811993 0102010125093 1,229 Anju Moitra WB34783/994 4110294989 0102010124980  280 Bimal Patit WB34783/995 4112697797 0102010124850 2,818 Ganesh Bar WB34783/965 4112668121 0102010124843 3,843 Jayati Dutta WB34783/1555 4113378836 0102010125307 0 528 Nilu Halder WB34783/507 4110009811 0102010125017 2,588  1529 Prasenjit Mondal WB34783/1244 4113189659 010201012....

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.... WB34783/1081 41128000894   1,355 1,553 Dibakar Halder WB34783/140 4111054710 01012010136723000 3,581 1,554 Swarup Saha WB34783/279 4112520538 1012010136006000 3,074         37589900 There were 1,554 number of employees/workers during the year, The appellant has furnished copy of the ESI Return. The above list - complete with employee bank account, PF No., ESIC No- is the irrebuttable proof and evidence. The appellant supplies housekeeping staff to 24 number of different establishment, organizations scattered at different locations. Client-wise, the salary paid details are: RITU ENTERPRISE DETAILS OF SALARY PAID FOR 2010-2011   AMRI & arrear AMRI CLINIQ SUSHRUTA &Arrear WOOD LANDS 7vasa KPC FORTIS Bhagirathi & Arrear   APRIL 916237 54731 586296 140477 428556 208246 90469 MAY 1064181 53858 741347 139....

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....8448 6867 8796   5787 11142 9539   3581422 8084 3846 8318   5806 11129 12591   3781725 55472 10713 57262 55439 50271 74090 49875 27000 3781725 INITIATIV INFINITY LOURDES SREE ACADEMY DHANUKA MANAGALAM HCL SUNRISE TOTAL         2426       2858695       13242   3870     31611864 4521     13840   6000     3174233 4461     14304 4452 5806     2909570 4204   882 14053 5806 6000     2801905 7928   17309   9741 11197   27000 3080273 4364   6148   5900 5300 12545   31511998 4290   7409   5419 6194 14651   2852862                 2826497 9172   8400   4934 7452 13094   3408856 84....

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....Assessing Officer never made even a single effort to either summon any of the assessee's payees or for getting their records verified from State Insurance or PF authorities. We therefore conclude that the CIT(A) has rightly reversed assessment findings disallowing assessee's salary expenditure claimed to be bogus in this peculiar facts and circumstances. The Revenue fails in its instant first substantive ground therefore. 4. Next comes Revenue's latter substantive ground pleading that CIT(A) has erred in law as well as on facts in deleting addition of Rs.6,19,764/- in the nature of undisclosed income due to alleged difference shown and Form 26AS. We find from para 7.2.2 page 13 of the CIT(A)'s order that the assessee has successfully reconciled the impugned difference emanating for the sole reason of non-recognition of income in the impugned assessment year. The Revenue fails to dispute all these clinching reconciliation details. We therefore decline the Revenue's latter substantive ground as well. 5. Learned counsel representing assessee informs us that its CO 76/Kol/2016 is only supportive of CIT(A)'s finding under challenge in Revenue's appeal. We hold the same to have bee....